Fall Legislative Outlook
Senate
According to CQ.com, Senate Environment and Public Works Committee chair Barbara Boxer asked Joseph I. Lieberman, I-Conn., and John W. Warner, R-Va., “to write a bill that would cap nationwide greenhouse gas emissions.” They released the skeleton of the legislation in August and plan to introduce a final draft by the end of September. However, “Because the climate-change issue is so complex, marking up the bill will be no small task.” There are several other climate bills, including S. 309 (Sanders-Boxer) and S.1766 (Bingaman-Specter).
CQ.com reports that Harry Reid “plans to allow floor time for the Lieberman-Warner bill this fall if it wins approval in Boxer’s committee. No matter what the bill looks like, it will face procedural objections that can be overcome only with a 60-vote majority. It is unclear whether Reid would have enough votes to move beyond that obstacle.”
House
According to CQ, Energy and Commerce Committee chair John D. Dingell, D-Mich., also intends to introduce climate legislation to reduce U.S. greenhouse gas emissions by 60 percent to 80 percent by 2050, although he has not announced any specific plans for the bill.
A first hurdle is the reconciliation process for the energy legislation that passed each chamber (HR 3221, and the Senate version of HR 6), which Dingell will be heavily involved in.
Dingell also announced his intentions to introduce global warming legislation for a carbon tax, a hike in the gas tax, and ending the McMansion mortgage deduction (homes larger than 3,000 square feet) while increasing the Earned Income Tax Credit and the Low Income Home Energy Assistance Program.
Senators on Lieberman-Warner Draft
The draft Lieberman-Warner plan has been praised and critiqued by environmental organizations. What are the fellow senators on the Environment and Public Works Committee saying?
Sen. Kit Bond (R-MO) eviscerates the plan:
Your proposal would impose hardship on U.S. citizens and threaten robust growth in the U.S. economy because it does not preempt similar conflicting, overlapping or duplicative state and regional carbon control programs… because it does not provide legal certainty for carbon sequestration… because it requires significant harm to the economy before triggering cost containment and management measures… because it fails to protect low-income families and consumers sufficiently [because it] first requires setting aside allowances to meet 100% of the needs of rural electric cooperatives [and] by allowing cost relief to also go instead to middle-income consumers and energy efficiency programs [and] because the proposal also allows allowances to go to [various worthy policy goals]... because it uses a Carbon Market Efficiency Board to employ cost containment measures [instead of] a defined price point of carbon allowances… because it allocates allowances arbitrarily across economy sectors and at variance with their emissions and impact on workers, consumers and families [because they] do not reflect those sectors’ contributions to carbon equivalent emissions… because it would raise costs above those needed for emissions reduction to pay for environmental, energy and social programs [instead of] funding them through the General Fund of the U.S. Treasury… because it delays technology development financing [instead of] immediate, significant flows of funding to carbon emissions capture and storage technology development and deployment.As does Sen. James Inhofe (R-OK):
The principles of Lieberman-Warner climate bill, as outlined today, fail to meet the two requirements established by the Senate to pass climate legislation. The Lieberman-Warner bill will significantly harm the United States economy and fail to mandate reductions from the developing world. With China now the world’s largest emitter of greenhouse gasses, it’s even more important that the developing nations CO2 emissions be taken into consideration. As a result, I have long supported efforts that build off of the President’s Asia-Pacific Partnership that seeks to promote technology sharing among developing nations as the way forward.
Sen. Barbara Boxer (D-CA) effusively praises the draft bill:
The Lieberman-Warner proposal is a huge breakthrough in the fight against global warming. The Lieberman Warner bill will be the fifth economy-wide Senate proposal, and in addition, there are several sector-by-sector proposals, demonstrating that an increasing number of U.S. Senators want to address this issue now. When I took the gavel of the Environment and Public Works Committee, I pledged to focus on global warming and on bringing bipartisanship back to the committee. With the Lieberman-Warner bipartisan proposal, those goals have been met, and we now plan to pass legislation through the committee before the end of the year. This proposal has taken good ideas from a variety of bills, and will be an excellent starting point for the committee.As does Sen. Ben Cardin (D-MD):
Today Senators Joseph Lieberman, I-CT, and John Warner, R-VA, released the detailed outline of an economy-wide global warming bill that would significantly limit greenhouse gases. I am extremely pleased with the comprehensive nature of their bill and the strong, bipartisan leadership they bring to this critical effort. I also believe this bill has important national security implications because it will lessen our dependence on foreign energy and help achieve energy independence. We have an historic opportunity to address the most compelling environmental, energy independence and national security issue facing our nation. I pledge to work closely with my colleagues to turn this historic opportunity into reality.
Sen. Bernie Sanders (I-VT) is more measured:
“I commend Senator Lieberman and Senator Warner for their hard work in putting together legislation that our subcommittee will consider. There is no doubt that we need bipartisan support in the United States Senate to address the most significant environmental threat our planet has ever seen.Given the dimensions of the crisis, however, I strongly believe that we must act aggressively to halt and then reverse global warming. I am concerned that the outline my colleagues put out today, which is a good starting point, does not go far enough. As good as it is, I hope we can do better. As a member of the subcommittee, I look forward to working with them.
The people of the United States want strong action, and the Senate must follow. In my view, we can, in fact, break our dependency on fossil fuels, substantially lower greenhouse gas emissions, move to sustainable energy and, in the process, create millions of good paying jobs. Those are the principles that I will fight for.
There do not appear to be statements from Democratic senators Baucus, Carper, Clinton, Lautenberg, Klobuchar, or Whitehouse, or Republican senators Voinovich, Isakson, Vitter, Barrasso, Craig, or Alexander.
S.2017, to amend the Energy Policy and Conservation Act to provide for national energy efficiency standards for general service incandescent lamps
Witnesses
Panel 1- The Honorable Alexander Karsner, Assistant Secretary for Energy Efficiency and Renewable Energy, U.S. Department of Energy
Panel 2
- Kyle Pitsor, Vice President of Government Relations, National Electrical Manufacturers Association (NEMA)
- Mr. Steven Nadel, Executive Director, American Council for an Energy-Efficent Economy
The world’s three largest lighting companies, long at odds over a way to eliminate inefficient incandescent light bulbs in use for 125 years, now favor Senate legislation (S. 2017) over a House-passed measure [H.R.2751, Sec. 9021 of H.R.3221] some say will outlaw all but the spiral-shaped compact fluorescent bulbs.Royal Philips Electronics NV in Amsterdam, the world’s largest light-bulb maker, Munich-based Siemens AG and General Electric Co., based in Fairfield, Connecticut, support a bill introduced last week by Senator Jeff Bingaman, a New Mexico Democrat.
The measure would phase out incandescent light bulbs by 2014 and replace them with light-emitting diodes, or LEDs, halogen bulbs, compact fluorescent lamps, or CFLs, and higher efficiency lights. The Senate Energy and Natural Resources Committee, which Bingaman chairs, held a hearing on the plan today.
The House bill would require a further improvement by 2020 in efficiency that industry representatives do not support because they say it would rule out bulbs they are developing to meet the 2014 standard.
“If you tell us that the products we have to spend millions of dollars bringing to market in 2014 will become obsolete in 2020, it’s very difficult for a company to go to their shareholders and say that’s an investment worth making,” said Randy Moorhead, vice president of government affairs for Philips Electronic North America, a division of Royal Philips.
House and Senate aides said today they hoped to reconcile differences in the proposals in negotiations on energy legislation, which currently is bogged down in Congress.
Energy ConservationDowagiac Daily News:Growing certainty that the burning of fossil fuels is warming the Earth’s atmosphere has spawned proposals from governments and industry to conserve energy. The Senate legislation would save 88 billion kilowatt-hours of electricity per year, according to a Bingaman statement, or enough to power more than 11 million homes.
Greenhouse gas emissions would be cut by 500 million tons annually, or 1.5 percent, by replacing incandescent light bulbs worldwide, Paul Waide, a policy analyst at the International Energy Agency, said at the Senate hearing. He said that would be the equivalent of “installing 100 times current U.S. wind generation capacity in lieu of unsequestered coal-fired power plants.”
Replacing Bulbs
Under the Senate proposal, beginning in 2012 and continuing through 2014, the current 40-watt, 60-watt, 75-watt and 100-watt incandescent bulbs, which now number 4 billion in U.S. homes and businesses, will be replaced by lower wattage bulbs that produce equivalent amounts of light. Bingaman’s bill would allow for a reevaluation of how to raise standards in 2020.
The House bill requires existing wattage lights to be brighter, which industry and environmental groups say will lead to more efficiency, although not necessarily to energy savings. The House measure then requires efficiency gains by 2020 that industry says are untenable.
The House plan would raise lighting efficiency by about 30 percent by 2014 and by 75 percent by 2020.
“If it stays the way it is now, as far as we know now, it is basically a CFL standard,” Earl Jones, senior counsel for the consumer and industrial division of GE, said of the House bill. He said new technology could develop, however Congress should not lock in an approach now to be mandated in 2020.
GE, Siemens’ Osram-Sylvania and Philips are planning different kinds of new products that would not meet the House’s long-range standards.
‘Tough’ Standards
Representative Jane Harman, a chief sponsor of the House bill, said the two bills were not all that far apart and she would compromise on how savings are measured. She would not support a less stringent bill.
“The standards are going to stay tough,” the California Democrat said in an interview after testifying at the hearing. “We are not watering down savings.”
Harman wants states to be able to preempt the federal standard until 2020. Bingaman wants no state preemption. Harman said that issue would not lead to the measure’s downfall.
Steven Nadel, executive director of the American Council for an Energy Efficient Economy, who testified at the hearing, said the Senate bill will save a little more energy than the House bill through 2020, and a little less than the House bill through 2030.
Nadel said the Senate bill should be toughened in ways industry does not support. For example efficiency groups want lawmakers to close loopholes that would allow less efficient lighting products to be exempted from the rules.
“I could think of a dozen ways that I could evade these standards without any trouble,” Nadel said of loopholes in the Bingaman bill.
To contact the reporter on this story: Daniel Whitten in Washington at [email protected]
Congressman Fred Upton (R – St. Joseph) testified this morning before the U.S. Senate Energy & Natural Resources Committee on his bipartisan amendment to transform the country’s lighting industry from obsolete, inefficient incandescent light bulbs toward higher-efficiency standards. Upton, a senior member of the Energy and Commerce Committee, and California Democrat Jane Harman are leading the effort to promote energy efficiency and reduce greenhouse gas emissions.Both Upton and Harman testified during the hearing to examine “Energy Efficiency Standards for Incandescent Lamps.” Upton’s bipartisan amendment, supported by both environmental and industry groups, was included in a broad energy package that passed the U.S. House in early August.
“We must examine other solutions in addition to conservation as energy consumption across the globe is expected to increase approximately 50 percent by 2030,” said Upton. “Current incandescent bulbs on store shelves are obsolete and highly inefficient – only 10 percent of the energy consumed by each bulb is for light with 90 percent wasted on unnecessary heat. With more efficient bulbs, we will dramatically lower our energy use, reducing greenhouse gases as well as saving American families billions of dollars in their electric bills – and the benefits will be as easy as a flip of the switch. Every home will be on the front lines in the effort to reduce pollution and save energy, and we will be successful one light bulb at a time. I am confident that the Senate will embrace our common sense, bipartisan approach that partners with American industry to substantially reduce pollution.”
Across the nation, the environmental and economic benefits of more efficient bulbs will be substantial.
High efficiency bulbs will result in the:
- Reduction in electricity demand equal to the output of 23 nuclear plants;
- Reduction of airborne mercury emissions from coal burning plants – 4,500 lbs;
- Reduction in annual Carbon Dioxide emissions – 120 million tons; and
- $14 billion in reduced electricity costs for consumers.
The amendment sets technology-neutral performance standards to replace today’s inefficient 100 watt, 75 watt, 60 watt and 40 watt incandescent lights with a mix of products (halogen, compact fluorescent, high-efficiency incandescent, and LED’s) that will result in efficiency gains exceeding 50%. Starting in July 2012 , the 100 watt incandescent will be completely phased out, with the 75, 60 and 40 watt bulbs phased out for more efficient bulbs in 2014, 2015 and 2018 respectively. The transition will result in the annual phasing-out of the production of 2 billion inefficient incandescent bulbs. Upton and Harman worked very closely with industry and environmentalists to craft common sense legislation that seeks to clean up the environment, all the while protecting American jobs.
Upton and Harman are also leading the effort to require that each agency, department, and office within the Federal Government, beginning Oct. 1, 2007, purchase light bulbs that meet the Department of Energy’s “Energy Star” efficiency ratings. Their bipartisan amendment has been included in every spending bill that has passed the House.
Larson Carbon Tax Bill: America's Energy Security Trust Fund Act (HR 3416) 1
Just before the August recess, Congressman John B. Larson (D-Conn.) introduced HR 3416, a federal carbon tax proposal that follows the basic model of Al Gore’s carbon tax recommendation.
Elements:- Covers coal, petroleum, and natural gas
- Only regulates carbon dioxide content, not other GHG emissions (the bill calls for a proposal to cover those emissions within 6 months of enactment)
- Tax starts at $15 per ton and rises at 10% faster than the cost of living adjustment each year
- Tax refunds or credits include feedstock and any offset project other than enhanced oil recovery, and all exports
- Revenues raised go into “America’s Energy Security Trust Fund”. 1/6 up to $10 billion goes to clean energy technology R&D, 1/12 goes to industry relief (declining to zero by 2017), and the remainder goes to offset payroll taxes.
House Passes Energy Package with Renewable Energy Standard Provision 1
HR 3221, the New Direction for Energy Independence, National Security, and Consumer Protection Act, passed at 5:40 PM by a vote of 241-172. 26 Republicans voted in favor of the bill and 9 Democrats against.
At 4:39 PM the Udall renewable energy standard (RES) amendment passed 220-190. 32 Republicans voted for the provision and 38 Democrats against.
At 8:16 PM, HR 2776, the Renewable Energy and Energy Conservation Tax Act, was passed by a vote of 221-189. 9 Republicans voted in favor and 11 Democrats against. The bill was subsequently attached to HR 3221 and the combined bill will go into conference with the Senate.
- H.R. 364, Establishing the Advanced Research Projects Agency – Energy (ARPA-E), which would create a new agency charged with reducing US dependence on oil through the rapid development and commercialization of transformational clean energy technologies
- H.R. 1267, which would direct the U.S. Geological Survey (USGS) to conduct a national assessment of our country’s potential capacity for the sequestration of carbon dioxide (CO2); and
- H.R. 2083, which would raise the energy efficiency standards for home appliances, such as refrigerators and clothes washers.
HR 3221 also includes a provision to manage data on global climate change that was introduced by Space & Aeronautics Subcommittee Chairman Mark Udall (D-CO). The measure would provide federal, state, regional and local user groups better access to climate change information when making decisions to cope with or mitigate climate change impacts.
Mr. Udall also contributed a section to enhance carbon dioxide capture and storage. The measure authorizes large-scale demonstrations of both CO2 capture technologies and sequestration.
Rep. Jerry McNerney (D-CA) led the effort to authorize the research and development of technologies to locate and develop geothermal energy resources. The measure would greatly expand R&D and demonstration for Enhanced Geothermal Systems (EGS) – an emerging resource where geothermal reservoirs are engineered and which could significantly expand the use of geothermal energy across the country.
The energy bill also included a provision to support R&D of technologies to produce electric power from ocean waves. Rep. Darlene Hooley (D-OR) introduced the measure which supports the study of marine renewable technologies in order to bring them to commercial readiness and establishes a research center for information and outreach on the issue.
Energy and Environment Subcommittee Chairman Nick Lampson (D-TX) authored a provision to significantly expand authorized funding levels for biofuels research and development. The measure also supports research into biofuels infrastructure needs and the efficiency of biorefineries.
Finally, a solar power R&D measure authored by Rep. Gabrielle Giffords (D-AZ) was also included in the package. This measure aims to improve technologies to store solar power and studies the steps necessary to integrate concentrate solar plants (CSP) into the national electric grid.
House Energy Package Votes Likely Delayed to Saturday
Energy legislation remained in limbo Friday, stalled by tight vote counts, partisan squabbling and fresh veto threats from the White House. Floor consideration was likely to be delayed until Saturday — at best.Democrats at midday were considering making changes to the energy tax package (HR 2776) to placate oil-state Democrats upset about treatment of the oil and gas industry.
There “may be some slight changes,” said John B. Larson, D-Conn., vice chairman of the Democratic Caucus, after a meeting in the office of House Speaker Nancy Pelosi, D-Calif. Larson would not elaborate on what the changes might be, but Democrats have been struggling to ensure that they can muster a majority vote in support of the energy package. They cannot count on support from many, if any, Republicans.
House Democratic leaders still insist the chamber will take up the energy tax bill and a broader energy measure (HR 3221) before it leaves for the month-long August recess. The Rules Committee was expected to draft a rule later Friday, with floor votes Saturday. But even that could prove optimistic.
Democratic aides said they expect a prolonged debate on a fiscal 2008 defense spending bill (HR 3222) that is set to go to the House floor ahead of the energy package. Republicans were threatening to use parliamentary delaying tactics on that bill.
“We didn’t get the rule for the energy package done yesterday. That means the earliest it could be taken up would be Saturday,’’ said a senior Democratic aide.
GOP members on the Rules Committee boycotted a meeting called for Friday morning on the energy bill rule and other pending legislation.
“We told the majority that we were not going to participate because of what happened last night,” said a Republican committee aide, referring to the vote-tallying floor fight over the agricultural appropriations bill.
The $16.1 billion energy tax package would raise taxes on the oil and gas industry and redirect the proceeds for tax breaks for renewable energy sources. The broader energy bill is intended to promote energy efficiency, new technologies and tighter regulation.Taxes Targeted
In the latest veto threat, issued today, the White House echoed the concerns of oil-state Democrats and House Republicans about the measures.
“The combination of these two bills will result in less domestic oil and gas production, higher taxes to disadvantage a single targeted industry, and duplicative energy efficiency and R&D efforts that are largely underway already,” the White House said in its statement of administration policy on the two bills.
The tax package may be in more trouble than the broader bill, because of the potential defection of oil-state Democrats who are concerned about raising taxes on an industry that provides jobs in their districts. Meanwhile, Republicans are trying to woo 36 members of their party who voted for a narrower energy bill (HR 6) in January.
Jim McCrery of Louisiana, the ranking Republican on the Ways and Means Committee, said this morning that he expected a substantial number of those 36 GOP members to vote against the tax package, though he still did not think he would have a majority. McCrery has proposed an alternate $5 billion package that would provide shorter extensions of many of the same tax credits that the main bill includes and exclude some of the more controversial tax increases on the energy industry.
The other potentially contentious issue is a requirement that could be added by amendment to the broader bill, which would require electric utilities to produce 15 percent of their power from renewable sources by 2020.
A potential hurdle is opposition from Majority Whip James E. Clyburn, D-S.C., who is concerned that Southern states may not have sufficient wind power to meet the standard, unless agricultural waste and other sources are allowed.
Rep. Tom Udall, D-N.M., had initially proposed a standard of 20 percent by 2020, but he softened that to 15 percent earlier this week. His latest proposal would allow utilities to meet more than a quarter of the requirement through energy efficiency.
Udall insists that Democrats already have a majority of votes to adopt the amendment, suggesting that the current discussions are intended to build further support and ensure a strong vote on the underlying bill.
Floor Debate on Energy Package
The House will consider amendments to HR 3221, the New Direction for Energy Independence, National Security, and Consumer Protection Act, and HR 2776, the Renewable Energy and Energy Conservation Tax Act of 2007, in preparation for the votes on these bills.
Amendments to House Energy Bill Announced: RES, No CAFE 2
The proposed amendments to HR 3221 have been submitted and are available for review, as are those for HR 2776.
Of significance for HR 3221:- Both major CAFE standards bills, Markey-Platts, and Hill-Terry, were withdrawn. Barton’s CAFE bill is still on the slate as Amendment #62
- Udall-Platts (HR 969), the Renewable Energy Standard, is on the slate as Amendment #96 and probably has enough votes for passage
- Herseth Sandlin submitted Amendment #81 to change the Renewable Fuels Standard program to require the production of 36 billion gallons of renewable fuels by 2022
- Boustany’s Amendment #9 makes the Secretary of Energy a statutory member of the National Security Council
- Shay’s Amendment #105 doubles the funding for the Weatherization Assistance Program
- McCrery submitted the Republican substitute for the tax package as Amendment #7
Lieberman-Warner Plan Unveiled 21
Sens. Lieberman and Warner have unveiled the skeleton of their cap-and-trade legislation, America’s Climate Security Act.
Cap
“The bill will specify an annual aggregate tonnage cap, expressed in terms of Co2 equivalence, for each year from 2012 through 2050. The cap that the bill will specify for 2012 will be the 2005 emissions level.” And: 10% below 2005 by 2020, 30% by 2030, 50% by 2030, 70% by 2050.
Allowances
- Each year 20% of that year’s National Emission Allowance Account for free to covered entities within the industry sector.
- In 2012 20% of the NEAA will be allocated to the electric power sector. A portion of that 20% will be free to new entrants to the electric power sector. The allocation will be at 20% from 2012 – 2017, then transition to 0% by 2035.
- 10% will be allocated to load-serving entities to defray energy-cost impacts on low- and middle-income consumers and to promote demand-side energy efficency, some of it for free to rural electric cooperative facilities.
- 8% will be allocated to covered entities who have taken pre-enactment action to reduce greenhouse gas emissions. That 8% will transition to 0% by 2020.
- Each year 4% will be allocated to state governments, half based on population, half on historical state emissions.
- Each year 4% will be allocated to US coal mines.
- Each year 7.5% will be allocated to farmers, foresters, and other landowners to store carbon in soils, crops, and forests.
- Each year 2.5% will be allocated to the transportation sector.
Allowances for Auction
- 24% in 2012 will go to auction under the aegis of the Climate Change Credit Corporation; rising to 52% by 2035.
Auction Proceeds
- 20% for a public-private partnership for power-sector technologies including CCS
- 20% for public-private partnership for CCS
- 20% for transportation sector technologies and reducing miles traveled
- 10% for environmental mitigation
- 10% for SO2, NOx, mercury emission reduction from coal plants
- 10% to state and local for low-income community mitigation
- 10% for international mitigation
CCS
CCS regulations and a legal framework for the Federal assumption of liability for geological storage will be proposed by a study group within two years of enactment.
Carbon Market Efficiency Board, Banking
- Up to 15% of the allowances a covered entity must submit may be comprised of borrowed allowances, with an interest rate set by the Board.
- Up to 15% of the allowances that a covered entity must submit may be comprised of offset credits.
- Up to 15% of the allowances that a covered entity must submit may be comprised of allowances purchased on a certified foreign greenhouse gas emissions trading market.
- the Board may increase the number of emissions credits if the average daily closing price of an emissions credit exceeds the upper end of the range predicted by the CBO prior to the start of the program.
- The Board may adjust the terms and interest rates of the emissions loans “as needed to avoid significant harm to the economy” and “in the event of more extreme economic circumstances” to raise the cap temporarily provided that subsequent year’s caps are tightened so that cumulative reductions are unchanged.
Offsets
“The bill will set forth detailed, rigorous requirements for offsets, with the purpose of ensuring that they will represent real, additional, verifiable, and permanent emissions reductions.”
Foreign Tariffs
The President will be authorized to require that importers of GHG-intensive products submit emissions allowances of a value equivalent to that of the allowances that the US system effectively requires of domestic manufacturers, if it is determined that nation has not taken commensurate action to reduce GHG emissions.
Lieberman-Warner Draft Bill Press Conference
At 10:30 am on Thursday, August 2, in the hearing room of the Senate Environment and Public Works Committee (Dirksen 406), Senators Joe Lieberman (ID-CT) and John Warner (R-VA), the Chairman and Ranking Republican, respectively, of the Senate Subcommittee on Private Sector and Consumer Solutions to Global Warming and Wildlife Protection, will unveil the particulars of the agreement that they have reached on economy-wide climate legislation. This agreement synthesizes ideas contained in other climate change proposals while also incorporating new thinking. It will form the basis of a bill that the two Senators will introduce when the Senate reconvenes in September.