Representative Jim Thompson: Biomass bill proposed

Rep. Thompson Introduces Biomass Bill To Create Jobs In Rural Communities

SALEM”” Rep. Jim Thompson (R-Dallas) today testified before the House Agriculture and Natural Resources Committee to urge approval of HB 3608, his bill to provide incentives for the transportation and production of biomass. He said the bi-partisan bill will help create desperately-needed jobs for rural Oregonians. “There’s a real need for job creation and retention in our state, especially in rural areas,” Rep. Thompson said. “Approximately 4.25 million acres of Oregon forestland have the potential to profitably harvest woody biomass through thinning excess trees. By pursuing this course of action, we would not only create more jobs in the woods, but also increase forest health and help reduce the potential for wildfires.”

HB 3608 establishes a tax credit for the transportation of woody biomass from forests to biofuels producers, a tax credit for biomass electrical generation, and a tax credit for the purchase of equipment to collect or process waste materials. The bill also directs the Oregon Department of Energy to conduct a study of biomass facility sites in Oregon.

“In 2005 the Legislature established a state policy to support and encourage biomass energy,” Rep. Thompson said. “Our government has made a strong statement that it supports and wants to encourage the use of biomass. HB 3608 is the next step in fulfilling this goal.”

Rep. Thompson introduced a similar bill during the 2009 session. Despite bipartisan support, it wasn’t approved by the House Revenue Committee. With Oregon still in deep economic recession, he said it’s time for the Legislature to reconsider and pass this job-creation bill.

“HB 3608 is a great bill for job creation and a win-win for Oregon’s environment,” Rep. Thompson said. “It’s time to pass this bill and put rural Oregonians back to work.”

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  • Rupert in Springfield

    More jobs in Oregon would be great. The last thing we need to do to get them is more nonsense like this.

    The tax code should be used for revenue generation only. Not for behaviour modification, such as benefits for being married, or to pay off favored groups or industries, such as with Obama care and the recent union pay off. We already have enough of this sort of thing in the tax code as it is. The last thing we need is yet another distortion of the market through a tax credit to a favored industry.

    If we want more jobs in the forest then we need to get our housing industry back. We need to have a streamlined judicial system so professional injunctioneers cannot tie up every sale with an endless stream of complaints.

    The last thing we need to do is create yet another wacky industry that exists as a creation of the tax code and not because of the utility of its product.

  • Steve Plunk

    I’m with Rupert on this. These tax credits end up going to those who are politically connected and know how to game the system. Bio-whatever fuels are a sideshow in the energy field. If the market can’t support the endeavor why should we subsidize it in this manner?

    As as a side note, whenever I hear a politician say “win-win” it really means somebody wins at taxpayer expense.

    • Dylan

      Steve-

      Your objections to Rep. Thompson’s bill ignore the realities of the status quo. Many of these Federal and State subsidies (and programs) already exist. If the federal government is creating programs to clean up the federal forest (finally they understand that healthy forest management is necessary to prevent catastrophic forest fires thanks to Rep. Walden) … and the federal government is creating kilowatt incentives to pencil out biomass energy to equalize them with other grid alternatives … Then why wouldn’t we want to close this loop?!?! Instead of stacking and burning the forest cleanup (which they’re currently doing) why not create a bill that incentivizes the transportation of these forest thinnings. By burning them in biomass facilities we create grid power, create desperately needed rural jobs (as noted by today’s latest mill closures) and we significantly reduce the CO 2 and methane impact of the wood. (ie burned in the forest vs. burned in the plant)

      Additionally … with the slated closure of Oregon’s coal plant in 2020 we will need alternative grid power that is available 24/7. (Wind isn’t)

  • v person

    My boyfriend and I are trying out a new role playing game call BioMass.

  • OI

    Steve – You could have said the same thing regarding federal investment in the technologies that form the basis of the internet. Government investment in such technologies have helped private enterprise flourish and our economy grow in ways that could not have easily been predicted.

    The fact of the matter is that government often provides seed money to encourage investment that ultimately spurs economic development.

    Jim is spot-on on this. It’s the kind of thinking that used to be common among Republicans before the Freedomworks crowd took over.

    • Steve Plunk

      This is more likely to resemble the ethanol debacle. Heavy government subsidies that warped the market and filled the pockets of some at the expense of others.

      The internet example is misleading since it was developed internally by the government not through subsidizing a lucky few. After the system was developed it expanded naturally into the private sector. Biomass isn’t really a new technology either so the comparison is even further off.

      This isn’t about the Republican party but rather about political connections, market distortions, and subsidizing those with the connections.

      • OI

        Steve, you are mistaken. Most of the internet technologies — TCP/IP, SMTP, HTTP, were developed at private institutions through research that was subsidized by various governments, and were not developed internally. ARPANET, which gave us packest switching and SMTP were done at UCLA and MIT and RAND corporation. HTTP was developed through the CERN consotium, which includes national research facilities, but also public and private universities.

        Again, private institutions, public dollars. Other similar examples of public-private partnerships that have spurred economic development include American automobile manufacturing (actually, most auto manufacturing) in factories that were built for the war effort, the development of railroads in the 19th century, government investment in transportation and other infrastructure, etc.

        • Steve Plunk

          I can’t see Universities as private entities, they are quasi-governmental. MIT and UCLA are not private companies akin to who will benefit from Thompson’s bill. The auto industry was already out of it’s infancy when WW2 came along. A comparison of the government partnered railroads versus the completely private railroads shows it was a rip off.

          This is a give away to somebody’s friends by all appearances.

          • OI

            Brush up on your history, Steve. There isn’t a railroad in America that did not benefit in one way or another from the largesse of the federal government, either in the form of cheap capital, cheap land, or both.

      • eagle eye

        Egads, I’m in agreement with Steve Plunk here. It’s true the government developed the internet; it was the military (ARPA) who wanted to be able to communicate during war, and the National Science Foundation, who wanted to have a new channel of scientific communication. Later, the European particle physics center CERN was very heavily involved in devleoping what became the web.

        In both cases it was highly motivated and capable people pursuing a distinct government or scientific goal. When the technology had come to the point where its commercial potential was evident, it took off in private business, to the point that it became the revolutionary technology that it is today.

        It wasn’t developed commercially with boondoggles — a state boondoggle! — for special private interests. The biomass energy stuff is no way comparable to the internet/web stuff or the other outstanding government-initiated technological advances.

        Rural Republican legislators who try to pay off their special interests are no more to be lauded than Democrats who do the same with theirs.

    • Rupert in Springfield

      >Government investment in such technologies have helped private enterprise flourish and our economy grow in ways that could not have easily been predicted.

      Has government investment in this or that helped here and there? Sure, no one is going to deny that. Things come out of government research or military endeavors that certainly do sometimes lead to products or industries being formed.

      However, just because a good thing happens here and there or even frequently because of government action does not mean it is necessarily good thing. Bad things also happens. In the case of tax rate market distortions, other businesses are penalized by a tax burden the favored business is exempted from.

      Government picking winners and losers through distortion of the market place with the tax code is something that should be opposed on the principle that on balance it is not governments place to decide which industries should be helped to flourish and which should not. The fact that government may come up with a winner here or there, does not mean that the general principle of government favoring one business over another has place in our society or should be encouraged.

      Just to head off my green friends – yes, this does mean I would oppose the same sort of tax credits etc. to the oil industry. No it does not mean I would support whatever weird “externalities” tax you want to impose willy nilly on people.

      • v person

        “However, just because a good thing happens here and there or even frequently because of government action does not mean it is necessarily good thing. Bad things also happen”

        But you can say the same for any enterprise. When we deregulated the electrical energy distribution system, we got some good, which is independent developers creating power sources and selling their stuff over the grid to utilities. But we also got Enron. With deregulation of banking we had folks making money hand over fist for a while, then they tipped the whole economy over the edge.

        Point is, if you expect a 100% success rate on government investments, and then hold industry to the same standard and no one will ever do anything useful.

        The problem with NOT investing (publicly) in new or emerging technologies is that private industry can’t or won’t invest until there is some certainty of a market. And in the meantime we end up with an atmosphere accumulating too much carbon.

        • Steve Plunk

          Government failure is failure with my money forcibly taken. If a private entity fails it’s either not my money or money I willfully gave understanding the risks. That’s a huge difference.

          Barney Frank tipped the banking industry over the edge.

          There’s plenty of private money for emerging technology through venture capital and other investment vehicles. This is not emerging tech, it’s old tech looking for green handouts. That private money knows how to gauge risk and reward, hold people responsible, and see when it’s time to get out. Government money is generally politically motivated.

          • v person

            “Government failure is failure with my money forcibly taken.”

            I feel the same way about the Iraq war. Nevertheless, we elect politicians, or sometimes pass ballot measures, that decide what and who to tax and what to spend the money on. When Kevin Mannix places a measure on the ballot that passes and results in my tax funds redirected from schools to prisons, I’m not happy about it but I don’t say he has stolen my money for his purposes. The government may “take” our money Steve, but in return it provides various services, some of which you or I personally may want and some of which we don’t want.

            Yes, there is a lot of private capital available to invest in emerging technology. But often it takes some government pump priming or market nudging to unleash that capital. You have a trucking business right? How difficult would it be for you if the government had not decided to invest in an interstate freeway system? Does taking advantage of this system make you one who is getting a handout? Yes, I know you have to pay mileage taxes to help maintain this system, But it was a government decision to focus tax resources on the project in the first place. It wasn’t a free market decision. Same is true for the intercontinental railroads. Those were only built because government gave away “free” land it had seized form native people.

            “That private money knows how to gauge risk and reward, hold people responsible, and see when it’s time to get out.”

            I guess you and I have been living on 2 different planets the past few years. Private mis-investment has taken our economy over a cliff. And the people responsible are now getting huge bonuses courtesy of a government bailout. Talk about handouts!

        • Rupert in Springfield

          >Point is, if you expect a 100% success rate on government investments, and then hold industry to the same standard and no one will ever do anything useful.

          Oh good lord, when business is allowed to tax people let me know. Until then stop trying to draw this analogy. Its simply silly and you know it.

          Distorting the market through tax favoritism is not an investment and I never argued it was.

          • v person

            “Oh good lord, when business is allowed to tax people let me know.”

            OK. Its true business can’t directly levy taxes on us, but they can indirectly impose costs on us in more ways than I care to count. Do I need to provide examples or can you use your imagination here?

          • v person

            My partner and I are trying out a new role playing game call BioMass.

          • Anonymous

            I shouldn’t admit this, but every now and again… a little chuckle.

  • Dylan

    I am not going to argue with you in the hypothetical world. I too would prefer a world in which the federal and state tax code is devoid of these behavioral modifications. Fair tax … or flat tax … I don’t care … but that isn’t a debate that is currently possible.

    The federal government has (either through altruistic intentions or because of political payoffs) incentivized the alternative energy market. Now energy utilities and venture energy operations are looking throughout the country for market opportunities. If Oregon can make modest investments to make biomass MORE attractive for venture investments … why not? The federals are already doing the heavy lift to support this industry (right or wrong) lets bring these facilities to Oregon as a replacement to our lost mills. As I understand it … creating a reliable fuel chain is the chief barrier to woody biomass so tackling the transportation barrier seems like a reasonable objective.

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