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Democrats, Obama Win Major Victory as House Passes Climate Change Bill

June 27, 2009

Majority Democrats and President Obama have won a major although narrow victory with passage on Friday by the House of Representatives of a major energy and climate change bill. The vote was 219 to 212. If eventually approved by Congress the measure would impose the first government-mandated limits on greenhouse gas emissions linked to global warming, and help accelerate effort to reduce U.S. reliance on fossil fuels and foreign oil imports.

With its cap and trade system of controlling pollution by providing industries economic incentives for limiting emissions, the bill is a high priority for the president, and provoked strong feelings on both sides of the political aisle.

It would require reductions in carbon dioxide and other greenhouse gas emissions by 17 percent from 2005 levels over the next 10 years, with a further goal of 83 percent by 2050.

Scientists have urged a more rapid reduction in emissions, warning that carbon emissions could increase by as much as 40 percent by 2030. Under cap and trade the government would set emission limits and distribute allowances that would be bought and sold. Companies needing to increase emission levels would purchase credits from those with lower emissions.

President Obama, and Democrats portrayed the bill as a crucial first step toward combating global warming and putting the country on the road to cleaner energy.

The president says the legislation would be an economic stimulant, helping to create more jobs, and making the U.S. more competitive with other nations in developing alternative energy solutions. "I have often talked about the need to build a new foundation for economic growth so that we don't return to the endless cycle of bubble and bust that has led us into this deep recession. Clean energy and the jobs that it creates will be absolutely critical to this new foundation."

President Obama says the measure would not increase the U.S. budget deficit, and would protect consumers from sharp costs of transitioning to a clean energy economy.

Most Republicans, especially those from agricultural states, characterized it as a huge tax increase that will burden industries, and increase utility and transportation costs.

"This bill will tax you. This bill will destroy the livelihood of those who live and work in rural America," said Republican Frank Lucas of Oklahoma.

Democrat Henry Waxman, who heads the House Energy and Commerce Committee, characterized the bill as a matter of national security. "There is a national security imperative to act. This legislation at long last begins to break our addiction to imported foreign oil and put us on a path to true energy security," he said.

The Congressional Budget Office has estimated a $175 annual cost by the year 2020 for the typical household from the legislation, while the Environmental Protection Agency estimated $80 to $110 a year.

Republicans pointed to other assessments showing significantly higher estimates, saying families could face several thousand dollars annually for energy and goods.

Republicans, such as Representative Marsha Blackburn, also asserted that the measure will lead to more U.S. manufacturing jobs going overseas where environmental standards are less rigorous. "The impacts of this bill will shut small businesses. It will close family farms, it will shutter manufacturing plants and those jobs will end up in China and India," he said.

Democrat John Larson responded on the subject. "Yes, the Chinese and Indian nations are out there competing. We want to compete against them, because we have better technology. We just have to make the [energy] investment here, and not in Saudi Arabia, and Libya, and Venezuela and Russia," he said.

To obtain the needed 218 vote majority, Speaker Nancy Pelosi and President Obama furiously lobbied undecided Democrats and wavering Republicans.

Some Democrats voting against the bill said it didn't go far enough to help to stimulate new alternative energy technologies.

House approval clears the way for debate in the U.S. Senate, where the legislation could face a tough battle.

Approval by Congress would give President Obama a major victory in hand before the U.N. Climate Change Conference in Copenhagen in December, and provide more flexibility in climate talks with China and other developing countries seeking major emission reductions from industrialized nations.

At a news conference with Germany's Chancellor Angela Merkel, President Obama said the climate change legislation would establish a framework for the U.S. to begin leading global efforts to reduce greenhouse gases, while working with emerging economies that are also contributing to global warming.

Chancellor Merkel said the both countries are committed to climate change as much more than just numbers and targets but as a commitment to ensuring energy security and a responsibility to countries that will be most affected by climate change.

$93 Million and $100 Million into renewable energy by Secretary Chu and NRE

June 5, 2009

Secretary Chu Announces $93 Million from Recovery Act to Support Wind Energy Projects
National Renewable Energy Laboratory to receive more than $100 million from Recovery Act

In an ongoing effort to expand domestic renewable energy, U.S. Secretary of Energy Steven Chu today announced plans to provide $93 million from the American Recovery and Reinvestment Act to support further development of wind energy in the United States during a visit to the National Renewable Energy Laboratory today. Secretary Chu also announced more than $100 million in funding from the Recovery Act for NREL facility and infrastructure improvements.

The funding will leverage the Department of Energy’s national laboratories, universities, and the private sector to help improve reliability and overcome key technical challenges for the wind industry. These projects will create green jobs, promote economic recovery, and provide the investments needed to increase renewable energy generation.

“Wind energy will be one of the most important contributors to meeting President Obama’s target of generating 10 percent of our electricity from renewable sources by 2012,” said Secretary Chu. “The projects funded by this opportunity will advance wind technology so that it can reliably supply a substantial portion of our nation’s electricity. They will also help in creating more new jobs and expanding a clean energy economy.

* $45 million for wind turbine drive train R&D and testing

DOE will provide $45 million directed toward enhancing the federal government’s ability to support the wind industry through testing the performance and reliability of current and next generation wind turbine drivetrain systems.

This investment will deliver dependable and cost effective hardware for utility scale wind turbines with over a 20 year design life. Overall, this project will help to improve the country’s competitiveness in wind energy technology, lower capital costs of wind systems, and maintain a high level of wind energy capacity growth.

* $14 million for technology development

To strengthen its support of the wind industry, DOE will make available $14 million to advance technology development in the private sector. This effort will aim to improve the quality and use of lighter weight, advanced materials for turbine blades, towers, and other components. Another area of emphasis will be process controls for lamination, blade finishing, trimming, grind, painting, materials handling and inspection.

* $24 million for wind power research and development

DOE will provide $24 million for the development of up to three consortia between universities and industry to focus on critical wind energy challenges. These partnerships will allow universities to establish research and development programs to advance material design, performance measurements, analytical models, and work with the industry to improve power systems operations, maintenance and repair, and component manufacturing.

* $10 million for National Wind Technology Center

DOE will invest $10 million at its own National Wind Technology Center in Colorado. This funding will enhance the National Renewable Energy Laboratory’s ability to support the wind industry through testing current and next generation wind turbine drive train systems for better performance and reliability. Additionally, upgrades to the electrical distribution system will permit cost recovery of the power produced by two new utility-scale wind turbines being installed there for testing and evaluation.

Additionally, under the American Recovery and Reinvestment Act, the National Renewable Energy Laboratory will also receive:

* $68 million for Research Support Facility

This project will create the nation’s most energy efficient office building at the same cost of low efficiency commercial construction today. It will achieve LEED Platinum and 50% energy use reduction over standard commercial office buildings. The goal is to create a design process that can be replicated by future construction projects.

* $19.2 million for Renewable Energy and Site Infrastructure

Will use solar and potentially geothermal and fuel cells to replace power currently purchased from utilities and reduce our carbon use.

* $13.5 million for upgrades to the Integrated Biorefinery Research Facility

New funding will create a continuous process research and development capability to develop commercial scale cellulose to ethanol technologies. It will also accelerate the development of commercially viable conversion processes.

Wind energy is among the fastest growing energy technologies in the United States. The U.S. now leads the world in wind energy generation and has led the globe in new wind energy capacity installations for the past four years. Last year, wind energy accounted for 42 percent of all new energy generation capacity in the United States. In 2008, DOE published the 20% Wind Energy by 2030 report which examines the technical feasibility of using wind energy to generate 20 percent of the nation's electricity demand by 2030.

Heavy going for cap & trade in US, Australia

June 4, 2009

Bills in the US and Australia setting climate targets and enabling emissions trading seem destined not to pass their biggest legislative obstacles before the December deadline for UN climate negotiations. Yet such firm emission-cutting measures in developed countries, particularly the US, are crucial to reaching a new global treaty to follow the Kyoto Protocol from 2013.

The Speaker of the US House of Representatives, Democrat Nancy Pelosi, has urged house committees considering the Energy and Security Act to complete their deliberations by June 19 so that it can proceed to the floor of the House before a July 4 recess.

Also known as the Waxman-Markey bill after its proponents, the Act has passed the key Energy and Commerce committee in the House but is also being reviewed by committees on science, agriculture and taxation. As the bill currently stands, it would cap and trade greenhouse gases from 2012 to reduce them 17 per cent below 2005 levels by 2020 and 83 per cent by 2050.

The bill is expected to pass the lower house in the second half of this year, perhaps with further amendment, before facing its toughest test in the Senate where it needs to muster 60 per cent support to pass. Political observers believe targets will have to be weakened further if it is to pass the Senate, with debate likely to go on into next year. This would be after the global treaty deadline but the UN and the Obama administration will be wanting to see as much progress as possible on the bill come December to demonstrate commitment.

Australia’s Senate is also the major hurdle for the Rudd Labor government’s Carbon Pollution Reduction Scheme bill, where the bill looks set to fail in its current form. The bill would set up cap and trade from mid-2011 under a target to cut emissions by a minimum 5 per cent below 2000 levels by 2020. The target could be lifted to 15 or 25 per cent depending on how strong an international agreement on targets emerges from UN negotiations culminating in Copenhagen in December.

Unlike the US Congress, members of the Australian parliament are more tightly bound to voting along party lines. While this allowed easy passage of the Carbon Pollution Reduction Scheme bill through the lower house, it’s a curse for the Rudd government in the Senate where it does not have a majority.

All non-government parties and independents in the Senate currently stand opposed to the CPRS, leaving the Government seven votes short of the required numbers. Among the arguments against the bill is that the Government should wait until after Copenhagen or a US legislative outcome before finalising its own laws. Senate blocking of the bill would almost certainly mean no cap and trade or targets implemented before Copenhagen and could lead to an election.

Airline industry targets carbon-free growth by 2020

June 3, 2009

The International Air Transport Association (IATA) announced on Monday that the world airline industry is committed to achieving carbon-free growth by 2020.

This was a major step forward by committing to a global gap on the industry's emissions in 2020, said Giovanni Bisignani, IATA's Director General as the 65th IATA Annual General Meeting and World Air Transport Summit formally opened here.

The airline industry was the first global industry to make such a bold commitment, Bisignani said.

There are three sequential goals to complete carbon-zero growth, including a 1.5 percent average annual improvement in fuel efficiency from 2009 to 2020, according to the IATA.

The goals also included efforts for a 50 percent absolute reduction in carbon emission by 2050.

All air transport industry players were united in their proactive approach to environment, with a cross industry four-pillar strategy on climate change, Bisignani said.

The strategy, which focused on improved technology, effective operation, efficient infrastructure and positive economic measures, was delivering results, he said.

In 2009, the carbon footprint of air transport was expected to shrink 7 percent -- 2 percent from IATA's four pillar strategy and5 percent due to the recession, said Basignani.

Basignani noted that the commitment needed to be matched by governments.

"ICAO (International Civil Aviation Organization) must set binding carbon emission standards on manufacturers for new aircraft," said Basignani, adding that a legal and fiscal framework to support the availability of sustainable biofuels must be established.

Basignani also said that governments must work with air navigation service providers to push forward major infrastructure projects to achieve the airlines' commitment on environment.

A bill before Congress may prove a costly way to reduce greenhouse gases

June 2, 2009

Experts are applauding a sweeping energy bill currently before the United States Congress, saying that it could lead to significant cuts in greenhouse-gas emissions and improve the likelihood of a comprehensive international agreement to cut greenhouse gases. "It's real climate-change legislation that's being taken seriously," says Gilbert Metcalf, a professor of economics at Tufts University. But many warn that the bill's market-based mechanisms and more conventional regulations could make these emissions reductions more expensive than they need to be.

The bill, officially called the American Clean Energy and Security Act of 2009, is also referred to as the Waxman-Markey Bill, after its sponsors, Henry Waxman (D-Ca.) and Edward Markey (D-Mass.). The legislation would establish a cap and trade system to reduce greenhouse gases, an approach favored by most economists over conventional regulatory approaches because it provides a great deal of flexibility in how emissions targets are met. But it also contains mandates that could significantly reduce the cost savings that the cap and trade approach is supposed to provide.

In a cap and trade system, the government sets a cap on total emissions of greenhouse gases from various industrial and utility sources, including power plants burning fossil fuels to generate electricity. It then issues allowances to polluters allowing them to emit carbon dioxide and other greenhouse gases; total emissions are meant to stay under the cap. Over a period of time, the government gradually reduces the cap and the number of allowances until it reaches its target. If companies' emissions exceed their allowances, they must buy more.

Economists like the system because companies can choose to either lower their emissions, such as by investing in new technology, or buy more allowances from the government or from companies that don't need them--whichever makes the best economic sense. It is meant to create a carbon market, putting a value on emissions.

In the proposed energy bill, the government will set caps to reduce greenhouse-gas emissions by 17 percent by 2020 (compared with 2005 levels) and by 80 percent by 2050--targets chosen to prevent the worst effects of climate change. Setting caps will make electricity more expensive, as companies turn to cleaner technologies to meet ever lower caps or have to spend money to buy allowances from others with lower emissions. But the bill has some provisions for cushioning the blow, especially at first. For one thing, it gives away most of the allowances rather than charging for them, and it also requires that any profits gained from these free allowances be passed on to electricity customers. It also allows companies to buy "offsets" that permit them to pay to reduce emissions outside the United States.

If the program is designed right, there are fewer allowances than the total emissions when the program starts. At first, when the caps are relatively easy to meet, the prices for allowances on the carbon market will be low. But eventually, they will get higher as the allowances become scarcer. In an ideal world, companies will predict what the price of the allowances will be, and plan accordingly.

Clean energy: America can meet the challenge

June 1, 2009

America's addiction to oil and other fossil fuels has put our economy, our security and our future at risk. But while President Obama, Congress, energy experts, business leaders and citizens across the country are rolling up their sleeves to create a clean-energy future, oil executives stubbornly insist that rapid change is impossible or too expensive.
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Chevron CEO David O'Reilly says moving away too quickly from oil is "a straight path back to a pre-industrial economy and a standard of living to match." Exxon Mobil CEO Rex Tillerson says the transition is 100 years away and that tougher rules to reduce carbon emissions will hurt consumers.

Of course oil companies don't want Americans to think we can kick the fossil-fuel habit anytime soon. Their bottom line is tied to the status quo. The question is not what Chevron and Exxon Mobil think is possible but what is the best way forward for our nation.

The industry's arguments ignore both the real costs of global warming and the economic benefits of a rapid shift to clean energy. The catastrophic potential of global warming is clearer every day. So are the opportunities for a rapid shift to clean energy produced at home with American labor and by American entrepreneurs.

A study commissioned by the Global Humanitarian Forum says global warming contributes to 300,000 deaths worldwide each year. The study estimates that the worldwide cost of global warming - from death, illness, drought, flooding, food shortages, species extinction, loss of forests and farmland, storms and property damage - is already $125 billion a year and will double by 2030.

Compare that with what we have to gain: The Union of Concerned Scientists estimates that an accelerated transition - cutting carbon emissions by 56 percent in 20 years while investing heavily in renewables, conservation and energy efficiency - would save U.S. consumers and businesses more than $450 billion in energy bills. Under that scenario, the American economy would grow by more than 80 percent in that period.

Even the simplest steps, such as Obama's goal of cutting Americans' use of electricity 20 percent and cutting natural gas use by 10 percent by 2020, would create hundreds of thousands of permanent jobs - while cutting 150 million metric tons of global warming pollution a year and eliminating the need for 200 new power plants.

O'Reilly and other naysayers argue that the technology is not available to make this transition. Perhaps what they mean is that they aren't selling it. Important clean-energy technologies are here today, and new breakthroughs arrive almost daily. As the president has made clear, clean, renewable energy is the growth industry of the 21st century. Our economic future depends on it. Investing in American businesses can help our nation compete with other countries that are currently leading on clean-energy technology.

But implementation and innovation have been held back by the unfair competition created by government subsidies and tax breaks for fossil fuels. Obama's economic stimulus package made a down payment toward more federal investment in renewables, but much more is needed - and oil companies must do their part. Over the past 15 years, the five largest oil companies have invested just $5 billion in renewables - a minuscule amount of their budgets for oil exploration - compared with $50 billion from venture capital firms.

There is an old proverb: "Those who say it cannot be done should not interrupt the people doing it." So, will we be fooled again by the oil companies who have brought us to this crisis, or will we rise to the challenge and build a better future for ourselves and our children?

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Latest News

Democrats, Obama Win Major Victory as House Passes Climate Change Bill

$93 Million and $100 Million into renewable energy by Secretary Chu and NRE

Heavy going for cap & trade in US, Australia

Airline industry targets carbon-free growth by 2020

A bill before Congress may prove a costly way to reduce greenhouse gases

Clean energy: America can meet the challenge

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