Algae Amendment Puts Biofuels Back in Energy Debate

Michigan senator offers amendment to extend tax breaks for algae use in energy production

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The Senate is set to vote Tuesday on legislation that will give an additional $1 per gallon tax credit to the producers of algae-based gasoline.

The legislation, offered by Michigan Sen. Debbie Stabenow, would expand an existing tax credit for certain biofuel production to include the cultivation of algae for use in fuel. Stabenow's amendment would also extend several other tax credits for energy production.

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The cultivation of algae to create or enhance biofuels has, in the past, been relatively non-controversial. But the issue became politicized quickly after President Barack Obama mentioned it as a component of his energy platform last month.

Mocking the idea as a pie-in-the-sky response to the real-life problem of high gas prices, the GOP presidential candidates have made it a regular laugh line on the campaign trail. Former House Speaker Newt Gingrich has taken to calling Obama "President Algae."

On Capitol Hill, the algae-as-fuel idea has quickly become a symbol of wasteful government overreach among conservative Republicans.

"Algae will be a bad sequel to ethanol," says John Hart, spokesman for Oklahoma Sen. Tom Coburn, who has lead charges to eliminate tax preferences or federal standards which promote the use of corn-based ethanol.

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Producers say that growing algae for fuel isn't yet ready for widespread use, but holds potential as a future renewable energy source.

The vote is one of more than a dozen amendments to the national federal highway bill, whih is aimed at re-authorizing federal highway programs. Democrats claim that the $100 billion bill will save or create 2.8 million jobs, although it has come under criticism from Republicans for its price tag.

Another amendment from South Carolina Sen. Jim DeMint would repeal all energy-related tax credits—for biofuels as well as those for oil and gas, a frequent Democratic target. DeMint's bill would use the savings from those tax credits—estimated to be about $90 billion over the next ten years—to reduce the corporate tax rate.

A vote on the amendment is expected on Tuesday, followed by a vote from the Senate. 

aparker@usnews.com

Twitter: @AlexParkerDC