The right choices for renewable energy standards
Thomas Edison, the genius behind the generation and distribution of electric power, said that the value of an idea lies in how it is used. Just as Edison suggested, one emerging idea for increasing our country's use of renewable energy could be a success or a failure depending on its use.
President Barack Obama and congressional leaders support creation of new green jobs through a national 'renewable electricity standard' that would require electric companies to produce up to 20 percent of their power from renewable source -- solar, wind, geothermal or biomass -- by 2021.
Currently more than half of the states have renewable energy standards, and many industries already generate power for their own use from renewable sources. So whether or not the idea of a national renewable standard winds up being a good one will depend as much on how it treats the industries and workers already producing renewable power as the new power and jobs it creates.
America's forest products industry is the leading producer and user of renewable biomass energy, generating more power from biomass than all the existing solar, wind, and geothermal energy in the U.S. combined. Sixty-five percent of the energy used at paper and wood products facilities is generated on site from carbon-neutral renewable biomass such as wood chips and byproducts of the paper-making process. We accomplish all of this while ensuring that the wood fiber we use is grown in a sustainable manner.
Ignoring the circumstances of existing renewable energy producers could lead to renewable energy policies that artificially create winners and losers in the marketplace and cost workers in the forest products industry their jobs.
A national renewable standard would increase the demand for biomass-based power and force the forest products industry to compete for its raw material -- wood -- against power producers. While utilities pass on higher fuel costs to their customers through regulated rates, forest products are priced in the global market, and U.S. producers frequently cannot pass on higher costs for raw materials.
The economic downturn has already had a disproportionate impact on forest products companies, which, since early 2006, have lost 190,000 jobs -- 15 percent of the industry's workforce. Additional pressure on these facilities could lead to even further job losses and even threaten the industry's overall survival in the United States.
Fortunately, there are ways the government can ensure that existing generators of renewable energy are not disadvantaged by policies that seek to increase renewable energy generation. For example, federal policymakers can join the 25 states that currently have renewable electricity requirements and count existing facilities power toward the standard. Policymakers can also make the renewable biomass energy the forest products industry generates and uses on site eligible for the Section 45 tax credit that renewable energy generators receive when they sell their power.
Finally, because a government-mandated renewable energy standard and other policies would increase the demand for wood biomass, policies should be enacted to increase its supply and availability by making wood from federal lands eligible for renewable energy standard purposes and by providing incentives to encourage sustainable forestry and expand our forests.
A national renewable energy standard could be a smart strategy for creating new green jobs, generating more renewable energy and increasing energy security, but only if it does not also hurt manufacturers' competitiveness, eliminate existing green jobs, and artificially create winners and losers in the marketplace. The choices Congress makes over the next few weeks will determine which course our country takes. Making the right choice means not only improving the environment, promoting renewable energy and displacing fossil fuels, but it also means protecting our country's existing renewable energy base and the workers that support it and prosper by it.
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