by David Schwartz
New Mexico Senator Tom Udall has on his desk a couple of objects he likes to share with young student leaders who tour the Senate offices in Washington, D.C. He says to them, “I want to show you what your future is about,” and then hands them a little solar panel and says how important electricity from solar is for a state like New Mexico.
Next he hands them a little bottle of algae oil and says, “In a state like New Mexico, when you have heat in the desert areas, and when you have brackish water underground, and you have some land, you can grow algae and you can turn it into oil like this. This is just as good, if not better, than any fuel we have right now. This is where we’re going.”
A strong advocate for clean energy and domestic biofuel production, Tom Udall joined the Senate on January 6, 2009 after two decades of public service as New Mexico’s State Attorney General and a U.S. Representative.
Coming from a political family dynasty, Senator Udall chose public service as a way to fight the good fights, the causes he feels passionate about, such as protecting consumers against fraud and standing up for the rights of the state’s most vulnerable citizens. He made fighting DWI and domestic violence a priority and, working with the Legislature, enacted tougher laws against offenders. He’s also worked to protect consumers, especially senior citizens, from rampant telemarketing and other forms of fraud and abuse.
After being elected to Congress in 1998, Tom Udall wrote legislation to establish a national, renewable electricity standard, which would spur the creation of good jobs, reinvigorate the economy, and reduce global warming emissions.
A decade later, now in the Senate, Tom serves on the Committee on Commerce, Science and Transportation, and the Committee on Environment and Public Works, both of which have focused his attention on the need to develop domestic solutions to some of the most serious challenges our country has ever faced regarding our energy needs and our environmental fragility. In this effort, Tom positions himself as a political representative working to reform government and Congress so that they can better work for the American people, rather than for the special interests.
We were invited recently to visit Senator Udall’s office in Santa Fe, New Mexico, and talk about his position on energy policy and algae biofuels.
Q. Senator Udall, your voting record shows a long history of deep support for renewable energy and domestic energy independence. What is your sense of the evolution in the support of these issues within the Senate, and how do you see that evolving over the next few years?
A. Renewable energy has rapidly moved over the past 10 or so years from a technology that was little known and generally not taken seriously to becoming a high-technology major industry. Their growth in the marketplace has translated into more understanding and respect in Congress, and we now have a stronger base of support for incentives for renewable energy than ever before.
I’ve been in the House for ten years, and now almost a year and a half in the Senate, and the whole time I’ve been there we’ve been struggling with putting together a national energy policy. We’ve passed a couple of energy bills, but they really haven’t done what we need to do. I think, first, we need to put a price on carbon and send a signal that, as the president has said, there’s a national mission to move away from fossil fuels. We need to, in our policy and in our legislation, incorporate ways to do that and be very specific. And we are in the midst of that right now.
Q. What are the stickiest issues being dealt with by the Senate on energy policy?
A. The major obstacles for a comprehensive national energy policy have been around for a long time. First, there are regional differences. Some regions rely heavily on coal mining, or oil and gas extraction and they are protective of those local interests.
Secondly, transitions are complex and involve costs. Right now our dirty sources of energy are imposing major costs on society in terms of oil dependence and pollution, and we must invest in new technologies and infrastructure to transition to a cleaner energy mix. Supporters of the status quo and opponents of change will always seek to create fear of higher costs for consumers.
Q. As you know, there are many claims being made relative to the importance of algae in our energy future. While the technology is early on and algae-based fuel production has not yet come to scale, its potential looms large as a major source to address our future energy needs. Where does algae biofuel sit in the consciousness of the Senate? And what are its positive and negative aspects in those discussions?
A. Research into algae as a source of renewable biofuel began back in the 1970s. But in our current energy policy discussions it is very new. During the last amendments to the Renewable Fuels Standard in 2007 there was little, if any, discussion of algae. In 2009, we added algae to that standard in legislation in the Senate Environment Committee. It had broad support from many other Senators.
Algae is creating a lot of buzz right now as policy makers are realizing that corn ethanol reached its limits and other cellulosic biofuels are coming along slower than some had hoped. When people realize that algae, unlike ethanol, can be converted into a synthetic crude oil that can be made into standard gasoline and diesel, then people get even more interested.
We’re trying to be fair to all of the areas that are out there. Early on the emphasis in energy policy was pushing ethanol, and I think we’ve now realized that there are other areas that are very fruitful, and algae is one of them. This is something that I think is very important to the country, and I’ve been meeting on a regular basis with entrepreneurs who are interested in investing in algae operations and bringing it up to the commercial level.
I think a majority of our caucus in Washington is very excited about a new energy policy that would do a couple of things: one, put a price on carbon, which sends a signal in the market that we want to move in a different direction. Number two, put incentives in place to get us to develop the very cleanest biofuels, whether it’s tax credits, or incentives for loans and grants.
In the broadest energy view, we need to do this in buildings, with the best building techniques and the best efficiencies, and then we need to do a renewable electricity standard to try and make sure that these power companies increasingly over time are moving away from fossil fuels to more renewable forms of energy. We’re trying to package this all into one big piece, and that’s usually the way that Congress has acted. Energy has been done as a large bill, and it takes time because you have regional conflicts to work out.
It’s not the politics. It’s not a Democratic-Republican thing. More than anything it’s regional. You go into the South and they’re very interested in nuclear power because they have nuclear power. And when they see a national energy policy, they’ll say fine, you can do your renewable electricity standard, but we want to have nuclear be a part of it. You get to the Midwest and the West, and wind is very important, but many of those states are very coal dependent, so they wonder how far you’re going to drive up their prices. And also in the West there’s the issue of how do you bring the wind and solar resources to the other parts of the country, so you have to get into the transmission grid. We’re such a big country and we’ve had such a haphazard way of putting the grid in place and developing new additions to the grid. So, those are the kinds of tensions that are there.
We have to realize that the Chinese, the Germans, and many of the other countries around the world have already made the decision. This is the big growth area in the future, and we’re going to go do it. But in China, just a few people at the top made that decision, and on solar manufacturing, they have gone from a very small percentage to now 50% of the world market in just the last three years. And many of these are technologies that were developed in the United States.
So we need an energy policy now to get us into the competitive arena. And we do have an absolute advantage when it comes to homegrown energy and fuels.
But more than international competition, this is also a security issue. When the former CIA director said we were funding both sides of the war on terror, it’s really true. Because if you are enriching Iran and Saudi Arabia and other countries for their oil, and those countries are then sending money to the terrorist organizations, this needs to be driven home in a dramatic way that it is a national security issue, as well as an economic issue and an environmental issue.
Q. In 2007 legislation subsidized advanced biofuels $1.01 per gallon (on top of the 51-cent standard ethanol credit) but it didn’t consider that algae might be used to produce these fuels. In the latest energy legislation being discussed, is algae being seen on par with other biofuel feedstocks and, if not, what will it take for algae producers to be given the level of governmental supports that other biofuel feedstock growers enjoy?
A. In 2007 there was little recognition of algae, but that has changed. There are ongoing efforts to include algae biofuels in the tax credits. We are working with Senator Bill Nelson, from Florida, who is a member of the Senate Finance Committee, on his legislation to include algae in the advanced biofuel tax credit. I am optimistic we will be able to make that change since it will not cost any additional money.
Just as in the tax provisions, algae is also disadvantaged in the Renewable Fuels Standard which mandates the inclusion of ethanol in gasoline and also requires advanced biofuels. We helped to create a technology neutral Renewable Fuels Standard in S.1733, the Kerry-Boxer Clean Energy Jobs and American Power Act, which the Senate Environment Committee approved last year. Under the current standard, cellulosic ethanol is given a preference, but we expect to create one advanced biofuel standard that is technology neutral.
Q. From Senate Bill S. 1462 American Clean Energy Leadership Act on page 105, line 21 says “allow triple credits for generation of energy from algae.” What exactly does that mean?
A. That section related to the proposed federal Renewable Electricity Standard, which would require electric utilities to generate a portion of their electricity from renewable sources like wind, solar and biomass. Since these resources are distributed, the standard allows trading of “Renewable Electricity Credits.” A majority of states have similar programs at the state level.
The proposed federal standard allows some generation sources to receive bonus credits and that is what the Senate Energy Committee did for algae. So if a utility generated 10 megawatts of electricity by using the biomass left over from algae biofuel production, they would receive 30 megawatts worth of “Renewable Electricity Credits.” This is a further method to encourage the production of algae for energy purposes.
Q. What is the Administration doing to support the development of algae biofuels that may not be well understood yet by the algae production industry or the public?
A. The Department of Defense is very interested because algae can be converted into jet fuel, unlike ethanol. The Pentagon is the largest single purchaser of crude oil in the U.S. and probably the world, and the Air Force is investing in algae research.
Congress also provided $30 million to the Department of Energy for this fiscal year for algae biofuel research. And of course, in addition to funding a number of other algae projects, the Recovery Act provided a $50 million grant and a $50 million loan for the first commercial algae biorefinery in southern New Mexico (Sapphire Energy).
Q. What do you think the Administration should be doing to further and quicken its development?
A. I think the most important thing is for the Administration to sustain its commitment to developing algae biofuels. They have provided significant support in their first 15 months in office, but other renewable technologies have been harmed in the past when support is removed prematurely. Solar power received federal support in the 1970s, but that support was cut off in the 1980s, and that delayed the industry for decades. We cannot afford to repeat that kind of mistake.
Q. The Gulf spill obviously changed a lot of minds regarding offshore drilling. What do you think will be the net effect of this on algae biofuel research and development?
A. The oil spill is a tragic reminder of the risks and negative costs of our traditional energy sources. We will need and use domestic oil for many years into the future, but I hope the spill will show people the importance of developing alternatives. The oil spill should be an impetus to develop a new energy policy, and I think the President tried to use his latest speech as a teaching moment for this.
Several of us have been meeting as an energy caucus for most of the last year, focusing on the various parts of energy policy. With the oil spill happening, it pushes us in terms of urgency. The job now is to put together a bill that answers the one that came out of the House of Representatives, and then to try and get this done by the end of the year. And I hope that we are going to have the biofuel part of it in there, and that it be balanced and will help move this new growing industry in the right direction, because I think there is huge potential there.
Q. Sometimes the problem with energy policy is that it focuses too far into the future, pushing the urgency off. And then the administration changes, the priorities change, and very little happens.
A. If you put a price on carbon today, you are sending a long-term price signal to the market.
Q. How likely is that to happen?
A. Well, the tough thing in the legislation is, can we do that? There’s going to be a biofuels part, there’s going to be a renewable electricity part, there’s going to be energy efficiency. There’s going to be conservation, and many of these things are not controversial. My sense is that the biofuels part of this isn’t nearly as controversial as the price on carbon. But in the largest possible sense, if you really look at how are we going to wean ourselves away from foreign oil, it involves sending this kind of signal to the market.
Q. New Mexico is one of the states that rates most highly as a strong potential growing region for algae. Whether true or not, it has been often quoted that if just 1/10th of the land area of New Mexico were devoted to algae production, that output could satisfy the ongoing biodiesel fuel needs of the entire country. What role would you like to see New Mexico play in contributing to our domestic energy supply?
A. New Mexico is a great model for the renewable energy, energy diversity and energy independence we want to see for America. New Mexico is a significant source of energy for our nation in almost every sector. New Mexico produces more oil and gas than it consumes, has world-class wind, solar and geothermal resources, and makes contributions to coal and nuclear generation as well.
In addition to generating electricity, our tremendous solar energy is a great source of power for biofuels, as long as they can thrive in an arid environment or take advantage of the brackish water underground.
Many areas of the country have great potential to develop their regional energy resources. For wind, the University of Delaware did a study that showed the wind resources out in the Atlantic, right offshore of the big megalopolises, could light and electrify the entire East Coast. Building the transmission is the tough thing. But in each area you can give examples. On solar, Harry Reid says if you took, I think, 100 square miles of Utah, you could make electricity for the whole country. And those examples show people what the potential is. What we need to see happen is partnering with the private sector to get the breakthroughs to get this to a commercial level.
Q. What advice do you have for the algae industry, its researchers, producers and entrepreneurs, regarding operating most successfully in light of the current energy policies in Washington?
A. It is important for people to strike the right balance between spreading the word about the great potential of algae and being clear about the obstacles and technology improvements that we need to realize that potential.
Congress has a great desire to reduce our dependency on foreign oil, and if algae can show success, I think those producing it will be greatly rewarded by both the federal government and the marketplace. Mostly I think people who are doing the work in biofuels should feel that they are part of this national mission.
Q. What is the most important message you are representing to both the Senate and the Administration regarding energy policy, and regarding the potential of algae?
A. Algae biofuel has made great strides in terms of awareness and education over the last couple of years. It is very important to continue that basic educational effort right now because you cannot just count on people to know and understand its potential.
The most important facts that get people’s attention are one, the incredible productivity of algae and how fast it can grow and produce useful oil; two, algae does not compete with agriculture; and three, algae can produce a crude oil that is compatible with our existing energy infrastructure, which dramatically reduces the cost.
Then we have to explain that the key obstacle is improving the technology to be able to recover that oil from the algae in a cost-effective way, and there is a strong national interest in developing that technology.
I think there’s a question out there whether the government, in terms of partnering, is going to be there for the long term. And people look at the solar history, where we started in the seventies and put a lot of money and incentives in place, and then we backed off and things folded. We shouldn’t be doing that with biofuels. We should be there for the long term. I think that’s a very important point that needs to be made. We have such great resources here to grow our energy in America, and that’s what we should be doing.