[Congressional Record Volume 147, Number 10 (Thursday, January 25, 2001)]
[Senate]
[Pages S575-S576]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Ms. COLLINS (for herself and Mrs. Boxer):
  S. 188. A bill to amend the Internal Revenue Code of 1986 to modify 
the tax credit for electricity produced from certain renewable 
resources; to the Committee on Finance.
  Ms. COLLINS. Mr. President, I rise today to introduce the Biomass 
Energy Equity Act of 2001. I am pleased to be joined in this effort by 
Senator Boxer, my colleague from California. This legislation makes a 
commonsense change to the renewable energy production tax credit by 
expanding it to include additional types of biomass plants. I would 
like to take a few minutes now to discuss the need for this important 
bill and to describe what it would do.
  Simply put, biomass energy production uses combustion to turn wood 
and organic waste into energy in an environmentally sound process. 
Biomass takes a public liability, organic waste, and converts it into a 
public asset, energy.
  The renewable energy production tax credit enacted in 1992 provides 
incentives to the solid-fuel biomass and wind energy industry to 
develop economically viable and environmentally responsible renewable 
sources of electricity. In enacting that legislation, Congress 
recognized that biomass energy offers substantial environmental 
benefits, specifically a reduced dependence on oil and coal, a 
desirable alternative to open field burnings and the landfilling of 
organic material, and a net reduction of greenhouse gas emissions.
  Unfortunately, the 1992 legislation was drafted too narrowly to 
realize the full benefits of biomass energy production. The 1992 act 
narrowly defined an eligible biomass facility as including only so-
called closed-loop biomass plants. Closed-loop biomass is a 
hypothetical form of electricity generation where the fuel is planted, 
grown, and harvested specifically and solely for the fuel of the power 
plant. This definition rules out the significant environmental benefit 
of disposal of organic waste otherwise destined for a landfill or 
field-burning and, therefore, remains unused. Since the biomass tax 
credit was passed, no taxpayer, not one, has taken advantage of the tax 
benefit.
  Simply put, the closed-loop tax credit is not a sufficient incentive 
to develop a costly ``fuel plantation,'' which entails large-scale land 
purchases, property taxes, and growing material for the sole purpose of 
burning it. By demanding that newly grown material be used rather than 
organic waste, the closed-loop biomass definition flies in the face of 
the commonly accepted environmental principle that products should be 
put to as many ``highest value'' uses as possible.
  The legislation that I introduce today would expand the eligibility 
of the biomass tax credit to include conventional biomass plants. This 
legislation is designed to encourage a source of energy generation that 
offers substantial air quality, waste management, and greenhouse gas 
reduction benefits. The national biomass industry currently uses over 
22,000,000 tons of wood waste a year. The waste the biomass industry 
converts into energy otherwise would be disposed of in one of three 
ways: burned in an open field, which generates pollution instead of 
energy; landfilled, where it fills limited landfill space and 
biodegrades, emitting methane, carbon dioxide, and other greenhouse 
gases; or left in the woods or fields, increasing the risk and severity 
of forest fires.
  The air quality benefits of biomass energy are of particular 
importance. According to the Northeast States for Coordinated Air Use 
Management, an organization of all the Northeastern States' Air Quality 
Bureaus, biomass energy produces less nitrogen oxide than alternatives 
and generates virtually no sulfur dioxide, particulate matter, or 
mercury. Biomass energy production also results in a net reduction of 
greenhouse gases.

  In addition to their environmental benefits, biomass plants 
contribute to the economy of many rural towns throughout America. 
Because of their dependence on organic waste, biomass facilities are 
usually located in rural areas where they are often important engines 
of economic growth. For example, in the small town of Sherman, Maine, a 
biomass facility provides 56 percent of the property tax base. It also 
directly employs 24 individuals and indirectly provides work for 
hundreds of truck drivers, wood operators, mill workers and maintenance 
contractors.
  In another small town of Maine, Athens, a biomass facility provides a 
third

[[Page S576]]

of that small town's tax base and directly employs 20 people, while 
supporting a local wood operator who, in turn, employs 40 people.
  The point is, the economy in many of the small towns in Maine, in 
towns such as Livermore, Ashland, Greenville, Fort Fairfield, Stratton, 
and West Enfield benefit considerably from these biomass facilities. In 
total, there are over 100 biomass facilities in the United States, 
representing an investment in excess of $7 billion. These facilities 
contribute jobs, property taxes and a disposal point for waste 
products. In addition, rural biomass facilities provide ash for use by 
local farmers, reducing their purchases of lime. I understand there is 
regularly more demand for the ash produced by these biomass plants than 
there is supply.
  With biomass energy production, nothing is wasted. Biomass turns 
waste products--the byproducts of timber, paper or farming operations--
into needed energy, wasting nothing. Even the ash is returned to the 
earth to grow organic matter yielding both crops and waste to generate 
still more electricity.
  We in Congress often discuss ways to help rural America. This 
proposal offers an opportunity to do so in a manner that not only 
benefits the economy of small towns in rural America but also in a way 
that generates considerable environmental benefits.
  This measure makes both economic and environmental sense. I urge my 
colleagues to join Senator Boxer and me in supporting this important 
legislation and working for its passage.
                                 ______