(These comments were submitted by Michael McAdams, President of the Advanced Biofuels Association.)

It’s pretty simple, a decision by the Hill to sit on its hands in December, puts a virtual hold on our nation's energy and economic security. If Washington doesn't step in soon with pragmatic tax incentives aimed at investors and adding certainty to a continuing skittish market, advanced biofuels and its promise of long-term job creation and strengthening our energy security, could be in jeopardy.

What’s on the table that could make a real difference? Finance Committee Chairman Baucus (D-MT) is currently drafting a bill that would grant a one-year extension of the biodiesel and ethanol tax credits, along with the Alternative Minimum Tax (AMT) patch.

But a word of caution, if the extenders are only renewed until 2011, we will be forced to go through the same situation we faced in 2009 and 2010 to provide certainty of the tax credit to the industry.

Earlier this week, key decision makers from both sides of the aisle, met in Washington with the CEOs and leaders of the members of the Advanced Biofuels Association for our Board meeting. (http://www.facebook.com/Advanced.Biofuels.Association) We were encouraged to hear from both sides of the aisle that investment in advanced biofuels and our technologies that will build better fuels and products, is not a partisan issue... at least for now. The Administration confirmed its commitment to actively push Congress in passing the tax extenders package in the lame duck session, while acknowledging the frustration from the biofuels industry with the lack of accessibility and requirements of the DOE’s loan guarantee program.

With success demonstrated in the laboratory, many companies are now commercializing their innovative technologies. Our industry is now poised to fuel the future by manufacturing renewable fuels and renewable products at commercial scale from a diverse selection of feedstocks. Congress has a real opportunity now to help accelerate the timing when Americans could actually start seeing the benefits of advanced biofuels in their daily life through cars and trucks to buses, trains and planes.

The simple answer to this week's energy question is nothing. This lame-duck Congress should extend the expiring tax cuts, pass a clean Continuing Resolution to fund the government and then go home before they do any more damage to the economy. When the new 112th Congress convenes next year, Congress should start over and work towards and energy policy focused on creating and fostering real and sustainable jobs and removing obstacles to affordable domestic energy production.

With an eye on job creation and economic growth, Congress' role is easy. First, they must put an end to the destructive uncertainty created by the Administration’s regulatory assault on affordable energy production. Congress should take whatever action necessary to bring the Administration’s job killing de facto moratorium in the Gulf of Mexico to an end. The Obama Administration is intentionally putting people out of work by making it next to impossible to obtain permits for oil and gas development. This would be bad enough if the Administration hadn’t blatantly mislead the American people on scientists views of a moratorium, as the Interior Department’s Inspector General reported last week.

To allow business to do what they do best--create jobs--the new Congress should do two things. First, it should halt EPA’s efforts to regulate greenhouse gases to create the right incentives to build new, affordable power plants in the U.S. Second, Congress should avoid enacting a renewable electricity mandate. These mandates, like cap-and-trade, only increase the price of electricity by forcing utilities to buy and sell electricity from higher-cost sources of electricity production.

Finally, Congress should allow the ethanol tax credits to expire. There is no justifiable case for subsidizing this fuel, which takes food and turns it into a transportation fuel with no clear economic or environmental benefit.

For the sake of the thousands of Americans who have lost their jobs in this difficult economic climate and the rest who are struggling to make ends meet, this lame-duck Congress should cross energy policy off their to-do list.

I don’t think Congress should make any last ditch efforts to craft a compromise energy bill. The energy issues that our country faces are long-term concerns that require well-reasoned, big picture legislation. Trying to pass meaningful, comprehensive legislation during the lame duck session would likely result in a bill missing the target.

Having said that, Congress does need to move forward with energy-only legislation. For all intents and purposes cap-and-trade legislation is dead. Equally unlikely is the repeal of EPA’s authority to regulate greenhouse gases. Even if enough votes could be garnered in support of the repeal, President Obama would likely employ his veto power in response. Any change on this front will have to come from the same place the authority was granted: the Supreme Court. Congress should not devote any more time to either of these efforts, but rather should begin drafting legislation that will help to prepare our nation’s infrastructure for the new mix of energy supply that will be required by renewable fuel standards and the inevitable regulations mandating a reduction in greenhouse gas emissions. Our government functions at its best when it takes a big picture approach and provides infrastructure improvements, such as the highway expansion of the 1950s and the 1972 enactment of the Clean Water Act, focusing on improving drinking water and wastewater treatment infrastructure. Both of those efforts resulted in the creation of many new jobs, benefiting both businesses and the general public. The same type of win-win legislation can now be crafted for our new energy infrastructure, and is too important to rush. Let’s let the new Congress come back in session and work towards crafting meaningful, long-term energy legislation.

Congress should make every effort to move energy legislation during the lame-duck session. The outlines of the next session are not yet clear, but we cannot exclude the possibility that the new division of power may result in increased gridlock, and the country urgently needs to move forward in this area which will be critical for new manufacturing and jobs during the coming decade.

What should be at the top of the list? Any and all items which have sufficient support to pass. In my view, both the Renewable Electricity Standard (RES) and the Section 1603 convertible tax incentive program for
wind energy qualify for that short list. Both have strong support and will have an immediate impact on the outlook for new manufacturing jobs and investment.

New developments in the past several weeks have shown us the results of continued inaction on federal energy policy. It is now clear that China will displace the U.S. as the global leader in installed wind capacity by the end of the year. Investment advisors Ernst & Young have found China to be the most attractive country in the world for renewable energy investment. U.S. wind installations in the third quarter were 72% below those in the same quarter a year earlier.

Wind energy is a proven source of new manufacturing jobs. Today, nearly 400 U.S. factories are making wind turbines and their more than 8,000 components. Leaders from the utility, business, environmental and labor communities have called upon Congress to pass a national RES and seize the opportunity wind energy offers to build a major new manufacturing industry.

After a bitter campaign season and many litigious legislative items awaiting the lame duck Congress, members will want to prioritize bills that offer a breath of fresh air. Dozens of land, water and wildlife bills -- including 21 Wilderness and wildland protection bills -- are just those kind of measures, and are primed to pass during lame duck with strong public support.

With broad bi-partisan sponsorship, these bills would protect our shared public lands and heritage areas, expand several military memorials, address critical water issues in the Gulf of Mexico and the Great Lakes, and add more national conservation areas and wild and scenic rivers, among other things.

The Wilderness and wildland bills, if passed, would designate 2 million acres as federally protected Wilderness and conserve another 2 million acres of stunning wildlands with other special protections. And if passed, the benefits from our shared public lands would only grow.

Our public lands offer a host of economic and natural benefits for free, such as cleaning our air and filtering our drinking water, boosting local economies by providing restoration, conservation and recreation/tourism jobs, and enhancing property values.

Protecting our public lands also mitigate the effects of climate change. They store carbon in their rich forests and protect wildlife and surrounding communities from climate-related natural disasters. Rather than moving backward to restrict the EPA’s ability to regulate carbon dioxide under the Clean Air Act, Congress should move forward and safeguard our natural treasures.

Last year, this Congress made remarkable strides to secure our natural heritage, protecting 2 million acres which passed the House and Senate with broad bipartisan support. But more must be done to ensure that our shared public lands are not lost to development, resource extraction and other threats.

The majority of Wilderness and wildland protection bills that are eligible for passage have little or no opposition, strong local support and bi-partisan support in Congress. But waiting to protect them will only put vital American places at risk.

Yesterday, 259 major institutional investors with collective assets totaling over $15 trillion – more than one-quarter of global capitalization – called for strong U.S. action to promote clean energy. It was the largest-ever group of investors to make such a call, and it comes at a moment when the Senate has a very clear choice: take bipartisan action to ensure that billions of dollars and millions of jobs come to the U.S., or gamble that aggressive investors looking for a market will be willing to wait on the U.S. to catch up to our global competitors.

The good news is that investors don’t necessarily have to wait. The Senate has several pro-renewables policies up for consideration in the crowded lame duck session – particularly a bipartisan Renewable Electricity Standard cosponsored by one-third of the Senate, and extension of crucial tax provisions like the Section 1603 grant program. These are ready for a vote, and are the key to ensuring that the 111th Congress does not end with a downward spiral on clean energy.

Of course, a lame duck vote is not ensured on any policies, renewable-related or otherwise. Some observers point to the November 2 “shellacking” as a reason for the Senate to do as little as possible in the lame duck, and some claim that policies that support renewable energy are a waste of dollars or political capital.

But those of us who actually work in the industry know that nothing could be more misguided. The billions of dollars being poured into clean tech investments all around the world couldn’t care less who won the elections. The private sector goes where market conditions are favorable for the hottest industries. Right now, the hottest global industry is clean tech – but the U.S. is far from the most favorable market, and without lame duck action, it’s likely to stay that way.

Global clean energy investments will pass $200 billion this year – and the vast majority of it will go elsewhere. Europe attracted $43.7 billion in 2009, thanks to its friendly policy atmosphere, and Asia raked in $40.8 billion – each more than double the investments made in the U.S. That imbalance is only getting worse: in the last quarter, the U.S. attracted only $4.4 billion in cleantech investments, while China brought in $13.5 billion and Europe $8.4 billion.

The RES, 1603 and related policies would finally open the U.S. market in the same way that China and Europe have opened theirs. If we wait until next year, we might be able to pass a policy that’s similar – but we might not. And that risk is precisely the kind of disincentive to investment that the U.S. should be avoiding right now.

Renewable energy is where the dollars are, and where the jobs are. The Chinese know it, the Europeans know it, and the richest investors in the world know it. I’m confident that at least sixty Senators know it, too – and it’s our hope that they act on what they know while they still can.

As chatter increases inside the Beltway that some energy legislation may move forward during the lame-duck session, new research from the heart of the farm belt once again battered the economic case for extending the ethanol tariff and subsidies. A new report by Bruce A. Babcock, director of the Center for Agricultural and Rural Development (CARD) and a professor of economics at Iowa State University, finds that extension of the two policies would have stark consequences for taxpayers and food prices – while allowing them to expire would have no significant impact on the ethanol economy.

Higher Feed Costs for Livestock Industry

The report, Impact on Ethanol, Corn, and Livestock from Imminent U.S. Ethanol Policy Decisions, finds that recent price increases for corn are a direct result of U.S. ethanol policies forcing demand adjustments on the livestock industry – where need for feed rations is fixed – rather than the ethanol industry which can more easily adjust to changing supplies. Babcock shows that the surge in corn prices (up nearly 50 percent since July) helped spur similar dramatic price increases in other crops like soybeans. The result has been significantly higher feed costs for U.S. livestock producers that are in turn raising the cost of producing Thanksgiving turkeys and other foods.

For instance, the cost of producing 100 pounds of milk has increased by almost $4.00, while the cost of producing meat has increased by about seven cents per pound for poultry to 24 cents per pound for beef. And Babcock predicts that food costs paid by consumers will eventually rise to reflect these increased production costs.

Marginal Impact on Ethanol Economy

In contrast, the report forecasts only modest impacts on the U.S. corn and ethanol industries if Congress does not extend the tax credit and import tariff. Because of a robust government mandate to blend ethanol with gasoline, the $6 billion dollar per year subsidy does very little to stimulate additional demand. Of the 5,000 random pricing scenarios analyzed, nearly half resulted in no change to ethanol consumption levels mandated by the government. That means there’s a nearly 50 percent chance that allowing the ethanol tax credit and corresponding import tariff to expire as scheduled at the end of this year will have no impact on corn prices or America’s ethanol consumption in 2011 at all!

The other half (i.e., the scenarios where extending the tax credit and tariff made a difference) showed an average increase in ethanol consumption of just 600 million gallons above the mandated level in 2011 – meaning taxpayers would be pay a staggering $10 per gallon of additional ethanol. Summing it all up, Babcock concludes:

“The recent corn and soybean price increases have starkly revealed the economic consequences of U.S. ethanol policy. Congress will need to decide if it really makes a lot of sense to stimulate demand for domestic corn ethanol through subsidies and taxes on imported ethanol when corn prices are so already so high. If Congress decides that it does not make sense to stimulate demand when supply is short, then allowing the tax credit and import tariff to expire on schedule makes sense.

“A decision to let the tax credit expire may not be that difficult politically because it does so little to stimulate demand. It will cost taxpayers about $10 for each additional gallon of ethanol that is stimulated by the tax credit. And there is no better time to let the import tariff expire because there is so little Brazilian ethanol available for export. Strong domestic demand in Brazil, high prices for sugar, and a strong Brazilian currency all have worked to limit the availability of Brazilian ethanol in export markets.”

That last point underscores the value of competition we’ve been making all year. Commodity prices rise and fall for a host of reasons. But when Americans have access to multiple sources of ethanol, they can turn to the less expensive option – whether it’s corn, sugarcane or something else in the future – to keep fuel prices in check.

A new paper by the U.S. Department of Agriculture Economic Research Service reached a similar conclusion, noting that in some U.S. markets today, ethanol produced from corn would be cheaper than imported Brazilian ethanol even if the tariff were removed. While sugarcane ethanol imports would likely remain low in the current market environment, fresh competition will ultimately benefit consumers with reduced prices at the pump in the long run.

(These comments were submitted by Marilyn Heiman, director of the Pew Environment Group’s offshore energy reform efforts.)

Senators need to address offshore energy reform during the lame-duck session. For nearly six months, they have deliberated on how to respond to the worst environmental disaster in history. They have held more than 30 hearings and introduced dozens of bills, yet have failed to pass a single one.

The Deepwater Horizon catastrophe showed us the consequences of lax oversight and inadequate response capacity, even in temperate waters within 100 miles of the biggest oil-supply port in the world. It also opened our eyes to the reality that blowouts can occur and have devastating effects on our communities and ecosystems.

Last week, the Pew Environment Group released a major report on the risks and challenges of oil spill prevention and response in the U.S. Arctic Ocean. Ice-choked waters, brutally cold temperatures, punishing winds and enormous waves could shut down spill response or render the usual response mechanisms unworkable. Even getting equipment and trained personnel to a spill site as remote as the Arctic Ocean would be a hurdle because the nearest Coast Guard air station is almost 1,000 miles away.

A first step towards protecting not just Alaska’s Arctic Ocean but all of the nation’s shoreline communities is to pass offshore energy reform. The House already has passed legislation to fundamentally transform our nation’s approach to oil and gas drilling off the coasts. It would ensure that future offshore development is science-based, uses the best available technology and requires thorough environmental review.

Now, in the lame-duck session, it’s up to the Senate to do the same. As the Gulf spill fades from our minds, it will be harder and harder to pass effective reforms. There is too much at stake not to act this year.

Sorry for the slip in my previous intervention. I meant to say ethanol subsidy. However, my argument stands. It is in effect a corn subsidy and a subsidy to export ethanol.

They could get nothing fully accomplished in a regular session and it is very doubtful they could get anything fully accomplished in a lame duck.

The ethanol export tax is a subsidy to essentially export ethanol and keep corn prices up. Ethanol from corn is bad economics and bad energy technology, but the lobbyists have had sway on this. We need to invest in better technologies for our energy future.

Green jobs will not even be a small drop in the bucket compared to the 14 million jobs we need to get back to 5 percent unemployment. (And this could take well over a decade.)

Green jobs may produce a few hundred thousand jobs over the next 5 years or so if they are pushed hard, or more importantly, if investors see the benefit of green industry development. This will not even be a tiny blip on the unemployment screens.

We should stop dreaming about green jobs saving the economy. They will not. The structural and financial situation is just too vastly negative for a few hundred thousand jobs to make any difference.

Given the dynamics of the remaining Congress, anything is possible. But the conventional wisdom suggests that those legislative items that are the most straightforward, requiring little in the way of true committee work, will be those most likely to see the light of day.

I believe there is significant likelihood of and support for passage of tax legislation which should include at least a year’s extension of the ethanol tax credit. The VEETC (Volumetric Ethanol Excise Tax Credit), as it is known, is simple, clear and well understood by the industry. It has been an extraordinarily effective program in helping to build out a domestic renewable fuels industry. It has helped American ethanol producers to create hundreds of thousands of jobs and provided previously overlooked rural parts of America with once in a generation kind of economic opportunity. Given the mood of the country and the message sent in the past election, this kind of job creation and economic hope is what Americans are seeking.

However, failure to extend it will mean plant closings and job losses at a time our fragile economy simply can’t handle the loss of a single additional job. To be clear, the ethanol industry supports responsible reform of current ethanol tax policies and a comprehensive look at all energy tax policy – including that for petroleum and other fossil fuels - and will work with the new Congress to help make it happen. But we can’t suddenly eliminate the current system and expect to expand our industry with cellulosic and other feedstocks and help reduce dependence on imported oil. We can’t remodel a house if the house no longer exists.

While Congress only has three weeks to complete its work, we are confident that members from both parties recognize the need and importance of passing a critical tax extenders package together with some agreed upon extension of the Bush-era tax cuts. At a time when the economy needs more jobs, not fewer, it is no time to allow the ethanol tax credit to expire.

The most pressing unfinished business for Congress during the lame duck session is promoting sustainable economic growth and getting Americans back to work. Renewable energy – not just electricity, but also transportation biofuels, biobased consumer products and renewable chemicals – has the potential to create needed jobs, save millions of dollars in imported oil, reduce carbon emissions, and enhance our national security.

To begin creating jobs again, U.S. businesses need a stable, consistent policy environment. Uncertainty over the renewal of tax policy is holding back companies from hiring and investing in growth. Allowing the small ethanol producer tax credit and the VEETC to expire would most certainly undercut investment in the entire biofuels industry and cost jobs.

Congress should also take the opportunity to look into the near future and create a consistent, sustained tax policy for every sector of the renewables industry. Extending tax credits now for advanced biofuels so that they have the same expiration date as for wind, solar and geothermal will give investors and businesses confidence to plan for future growth. Making the credits available to new technologies that are moving toward commercialization – such as algae production, biobased products and renewable chemicals – will help the industry grow sustainably and achieve its strong potential for job creation.

A relatively modest investment by Congress in providing appropriate renewable tax credits can yield high rewards for the country in a short amount of time. But the longer Congress waits, the longer it will take to create those new jobs.

A lot has changed since the midterm elections, but one thing that has not changed is support for energy legislation that will reduce our dependence on foreign oil, create jobs and strengthen our national and economic security.

Democrats and Republicans alike agree that we can achieve these goals by increasing the use of ethanol in our fuel supply.

Today, ethanol is the only available and affordable alternative to oil in the market. Ethanol – produced right here in America –creates and supports the growth of more than 400,000 jobs annually, contributes $53.3 billion to the nation’s GDP and generates $8.4 billion in tax revenue. All of this is in addition to eliminating the need to import at least 364 million barrels of oil.

And we can do much, much more if we produce and consume more American ethanol. What can policymakers do in the lame-duck to secure these benefits? Extend the ethanol tax credits to ensure market access.

Tax incentives, including the Volumetric Ethanol Excise Tax Credit (VEETC), have played a critical role in the development of the ethanol industry in the United States and they have been a major factor behind the increase in production and demand over the past two decades.

Today, the greatest issue facing the ethanol industry is market access. That is why Growth Energy proposed the fueling freedom plan which will eliminate the barriers to the transportation fuels market by building out ethanol dispensing infrastructure in the form of 200,000 blender pumps, a mandate for production of flex fuel vehicles and federal loan guarantees for the construction of ethanol pipelines.

Long-term, an investment in this type of fueling infrastructure would allow the ethanol industry to compete on a level playing field, without government support, and give consumers a genuine choice in the marketplace.

But, this investment won’t happen overnight. An immediate extension of the ethanol tax credits and secondary tariff is needed to transition to this goal. Not extending the tax credits would be economically disruptive to the ethanol industry and create uncertainty in this important market. While the ethanol industry is supportive of reform of these tax credits – they cannot be allowed to expire before reform policies are adopted.

The lame-duck session will be short, but working together Congress can help strengthen our energy, economic and environmental future by enacting sound public policies to open the market and allow biofuels to compete.

The short answer is not much and that is a good thing. Lame Ducks, like wounded grizzlies, are dangerous creatures. They are not well suited for long term, complex issues like climate and energy.

This year’s election made clear that the Congressional approach to climate--energy rationing through cap and trade--and out of control spending, which is contributed to by increasing subsidies, was a route to incumbent retirement. The peoples’ agenda is absolutely clear.

Congress should focus only on “must dos” and then go home. Those “must dos” are appropriations and taxes. Once again, Congress has failed to pass any appropriation bills before the new fiscal year started on October 1. No business would long survive if it did its financing the way Congress does its. Passing appropriation bills with spending discipline and avoiding the continuing resolution tactic would be a welcomed accomplishment. A genuine sign that Congress understands the need to reduce the growing federal deficit would help to boost investor confidence.

Failure to address expiring tax rates would mean that everyone would face higher taxes starting in January and that would be chilling to the economy. There is absolutely no justification for allowing that to happen. It would represent dereliction of duty. The economy is struggling to recover from the worst recession in decades. Only the fiscally irresponsible fail to see the connection between maintaining the current tax rates and the increased certainty needed by businesses, especially small ones, and consumers to increase their willingness to spend and hire. Indeed, if Congress had acted on taxes sooner, the economic growth rate and new job creation would have been higher.

Beyond those two actions, anything else should be limited to actions that will lead to job creation and stronger economic growth. That excludes the ruse of “green job” creation. As Spain and other EU nations have discovered, their cost is too high and for each one created through subsidies, a larger number of productive, good paying ones are destroyed. Subsidies to promote “green jobs” are a form of industrial policy and government has a poor record on that front.

The approach to climate policy that has been pursued since Kyoto--cap and trade and alternative energy schemes--should be relegated once and for all to the scrap heap of flawed ideas. When the new Congress reconvenes, it should focus on a long term, sustainable energy policy that will meet the economy’s needs over the next few decades and set the foundation for the development of the new energy systems that could be commercially viable after 2030. That requires a commitment to a well thought our energy R&D program.

Since energy policy and climate policy are two sides of the same coin, wise energy policy is the best way to limit the growth of greenhouse gas emissions and promote strong job creation. Unless Congress finally learns that abundant and affordable energy is needed for robust economic growth and job creation, we could face a decade, and perhaps longer, of economic stagnation.

(These comments were submitted by Frank Maisano, energy and environmental specialist at Bracewell & Giuliani.)

Originally the agenda for this lame duck session was broad and deep, despite history that shows us not much can actually happen in a lame duck session. For four straight congressional sessions, we have held at least one lame duck session to keep the government running in most cases. Only once in modern history has a lame duck session resulted in serious, substantive legislation when the Clean Air Act was finalized in 1990 (with over 400 votes I might add).

So despite the broad agenda, oddsmakers and experts alike will tell you the massive sweep by Republicans will certainly reduce the agenda for the lame duck legislative sessions to probably nothing more than what "really needs to be done" to keep government functioning.

Recent reports say Democratic leaders want to consider as many as 20 bills during the lame duck session, but there is only a sure bet that we will see major focus on at least three items: Bush Tax Cuts, Spending, Defense Authorization.

On energy issues, climate change, energy efficiency and national renewable energy standards will again be listed as agenda items. Expect Energy Committee Chair Jeff Bingaman (D-NM) and his supporters in the renewable energy industries to push hard on getting a vote on the National RES. While less contentious than some other issues like climate, it remains a significant challenge as battle lines are drawn heavily along regional lines. This, coupled with a less receptive new Congress, will certainly keep the bar very high for an RES to be included in the lame duck. Look for them to lose Democrats like Landrieu, Bayh, Webb and Hagan, which won't give them enough to cross the finish line, even if they have some Republicans like Brownback, Grassley and others.

Rumors abound as well that Sen. John Rockefeller (D-WV) is aggressively lobbying Majority Leader Reid to get his promised vote on his bill to prevent the EPA from curbing carbon gas emissions for two years. EPA is expected to start regulating GHGs on January 2, 2011, less than two months from now. There already is bipartisan support for Rockefeller's approach, but it is widely opposed by environmental groups. This expected nastiness, short time lines and much wider margins of bi-partisan support in the next Congress, will likely push it off until another day.