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eNews from Wednesday, July 21, 2010

Imperium Renewables: Congressional Budget Office Report on Biofuel Tax Incentives "Fatally Flawed"

Business Wire -- SEATTLE, WA -- July 20, 2010 -- Imperium Renewables, a leading producer of renewable, domestic and low carbon biodiesel, today criticized a report from the Congressional Budget Office (CBO) titled “Using Biofuel Tax Credits to Achieve Energy and Environmental Policy Goals.” Imperium believes that the report’s focus – estimating the “cost to taxpayers” of the various incentives for biofuels – is fatally flawed because it takes only the costs, and not the benefits, to the nation and taxpayers of promoting a vital and growing biofuels industry. Further, because it does not apply the same critical analysis to conventional petroleum fuel, the report underestimates the benefits of biofuels and hides the significant existing costs to taxpayers of our reliance on petroleum fuel.

“This report is like a cost-benefit analysis, without the benefit analysis,” said John Plaza, Founder and CEO of Imperium Renewables. “First, the CBO completely ignores the cost to taxpayers of the current petroleum industry, whether it’s the $300 billion in subsidies and tax breaks for Big Oil, the hundreds of billions our nation spends in the national defense budget securing oil supplies, or the looming billions for the cleanup in the Gulf and the economic destruction facing that region. This report does not even acknowledge the existence of taxpayer cost for petroleum, so it is impossible to have a frame of reference.

“Second, the CBO report ignores the reality that these incentives are really investments in the long-term development of a domestic and renewable energy supply, something the federal government has a deep history of providing. In total, the U.S. government has invested $80 billion of taxpayer money on coal-fired plants. It has contributed $72 billion to create the nation’s hydroelectric dams and $63 billion for nuclear facilities. It has invested billions more to create a national network of highways. Again, the CBO could have provided data about the relative costs to taxpayers of these industries to provide context.

“All of these investments were made to advance energy production, national security and economic development – the same guiding principles behind the investments in the nascent U.S. biofuels industry. Had these historic projects been subjected to the same kind of simple cost analysis as the CBO used for biofuels, they never would have been built – and millions of Americans wouldn’t be enjoying the benefits of those investments – low costs for power, a national grid and a robust, interconnected national highway system.

“The CBO also ignored data showing that every dollar of subsidy invested in biofuels returns more than two dollars in increased Gross Domestic Product and state and federal tax revenue. Most distressing is the admission by the authors that the report ignores several positive taxpayer benefits, including that ‘increased production of ethanol has probably resulted in some reduction in the price of gasoline, an increase in farm incomes and some impact on the quality of the nation’s air and water resources.’

“In fact, Merrill Lynch estimated in 2008 that the availability of ethanol effectively reduced the cost of petroleum by 15 percent. Using a low estimate of 20 cents per gallon and a high estimate of 61 cents per gallon, the availability of ethanol is estimated to save each American household between $210 and $642 per year. How can this not be factored into the CBO analysis?

“We call on the CBO to revise this report to include the known benefits to taxpayers resulting from the biofuels industry, and more importantly, to conduct a similar investigation of the cost to taxpayers of petroleum fuel. Until then, policymakers cannot reasonably rely on this report when evaluating the continued Federal investments in clean, domestic and renewable fuels.”

About Imperium Renewables

Founded in 2005, Seattle-based Imperium Renewables owns and operates a production facility in Grays Harbor County with a nameplate capacity of 100 million gallons per year. It is the largest BQ-9000 certified production facility in the United States and the second largest facility overall. More information on the company is available via the website at www.imperiumrenewables.com.

Contact:
John Williams
Scoville PR for Imperium Renewables
206-625-0075
jwilliams@scovillepr.com

Source: Imperium Renewables

Copyright Business Wire 2010

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