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Senators Introduce Bill To Promote Biogas Production Through Tax Credits

WASHINGTON, DC - Billions of gallons of fossil fuels could be reduced through renewable energy sources produced from animal waste with a little ingenuity and modest government support. Today, a bipartisan group of seven Senators led by Senator Ben Nelson of Nebraska introduced groundbreaking legislation that promotes the development of biogas - a natural gas substitute created by the conversion of organic wastes such as the anaerobic digestion of animal wastes - through tax incentives.

"We already have the technology to break down animal wastes to create biogas but it needs encouragement from the federal government to become a commercially-viable alternative to natural gas. This new energy source would benefit rural communities and the environment while lessening our dependence on fossil fuels and ensuring energy security," said Senator Ben Nelson of Nebraska. "We shouldn't waste the waste; we should promote biogas development."

"Incentivizing production of clean and affordable energy from agricultural waste is a benefit to everyone," said Senator Mike Crapo of Idaho. "Developing our supply of renewable natural gas is one of the many ways our nation's farmers, ranchers and foresters are proving to be an important part of the solution to our energy needs."

"This bill puts an existing byproduct to a productive use," said Senator Sherrod Brown of Ohio. "Ohio's strength in agriculture along with its growing renewable energy industry positions us be a leader in the production of renewable natural gas. By encouraging its production, we can create jobs, reduce our dependence on foreign oil, and improve the environment."

"This bill promotes innovative technology for the production of renewable energy, and it is good for Nebraska's livestock producers," said Senator Johanns of Nebraska. "In addition to being a potentially abundant energy resource, biogas holds the added benefit of turning manure from a waste product into an energy resource. I am proud to be a co-sponsor of this legislation."

"In basketball terms, this proposal should be a slam dunk," said Senator Ron Wyden of Oregon. "It creates a major new incentive to produce natural gas from renewable sources, allowing dairy farmers, feedlot owners, food processing companies and others to turn waste products into revenue. It reduces environmental emissions of a potent greenhouse gas - methane. And it rewards innovation by allowing a broad range of feedstocks and processing technology to qualify."

"This type of forward thinking is what is needed for our country's energy security," said Senator John Thune of South Dakota. "I will continue to work on developing alternative, home grown energy resources that are good for our environment and our economy."

"By making real investments in the production of alternative energy technologies like biogas we can create good-paying middle-class jobs," said Senator Stabenow of Michigan. "This legislation will help ensure farmers and developers throughout Michigan can continue to convert waste into clean energy, all while improving water quality for the Great Lakes."

Biogas is produced through technologies such as anaerobic digestion (AD) that can convert animal wastes and other agricultural or organic wastes into at least 50% methane (the principal ingredient of natural gas). Biogas can be used as is on the farm or co-located with another facility such as an ethanol plant, or as a renewable substitute for natural gas, propane or other fossil fuels.

This legislation, the Biogas Production Incentives Act of 2009, would encourage greater production of biogas for energy purposes by providing biogas producers with a tax credit of $4.27 for every million British thermal units (mmBtu) of biogas produced. This could mean more jobs and a boon for rural communities.

Biogas production also offers environmental benefits such as a reduction in the greenhouse gas emissions of both carbon dioxide and methane and improved water quality through better manure management. According to the U.S. Department of Energy, if the U.S. used half of its waste biomass, biogas could replace about 5% of the natural gas currently being used, reducing carbon dioxide emissions by another 45-70 million metric tons per year.

The U.S. Department of Agriculture cites a report by the Senate Agriculture Committee estimating that each year 1.37 billion tons of solid animal waste are produced in the U.S. -- the production of biogas could help turn much of this waste into a source of renewable energy.