By a vote of 235-181, the House of Representatives passed the version of H.R. 6 which contains both House and Senate provisions (CAFE of 35 MPG by 2020, RES of 15% by 2020, oil/gas rollback with PTC, green jobs, and other provisions, RFS).
Today marks the dawn of a future with less dependence on foreign oil, more renewable energy, and a safer climate. This bill marks a turning point away from America’s untenable path of reliance on dirty fossil fuels that pollute our planet and link us to dangerous foreign regimes and towards a new energy independence future.
This historic piece of legislation represents a paradigm shift in our nation’s approach to energy. The House of Representatives has voted to begin curbing our dependence on fossil fuels and reducing our global warming pollution. We applaud the bill’s passage in the House and commend Speaker Nancy Pelosi for standing up to special interests and ensuring that key provisions remained. This energy bill is not perfect – its fuel economy standards are too weak and its biofuels mandate too large – but, on balance, it represents a strong step forward. Especially important are a provision that will require all utilities to produce some of their energy from clean sources, such as wind and solar, and provisions that will end billions of dollars of subsidies for big oil and instead use these funds to hasten America’s transition to a clean energy future.
In January, Speaker Pelosi promised to deliver energy legislation that would put us on the road toward a new, clean energy future. The energy bill that the House passed today not only puts us on that road, but pushes the accelerator to the floor. It is a dramatic pivot away from the failed energy policies of the past and sets the stage for the Senate to flip the switch on America’s new energy future.
It is a bill of firsts: the first increase in fuel economy standards in more than three decades, the first national requirement for renewable energy, the first environmentally sensitive mandate for homegrown biofuels, and the first energy bill to provide billions for clean energy instead of shoveling subsidies to Big Oil and other polluters. Instead of a pork-laden monstrosity tailored to the needs of the dirty energy industry, this bill will give us clean electricity, greener cars, provide billions for clean energy instead of Big Oil’s bottom line, strengthen our economy, make us more secure, and begin to address the challenge of global warming. It is a tremendous achievement for the Congress, but more importantly, it is a victory for the hardworking American families who are now suffering as a result of decades of failed energy policies.
The timetable for House action on a sweeping energy bill appeared to be slipping Wednesday, as lawmakers attempted to nail down final details of the package.
The Rules Committee was still waiting to see exact language of the comprehensive measure (HR 6), casting doubt on whether the bill would reach the floor before Thursday.
Legislative aides said details still needed to be worked out on the measure’s tax provisions, which could require adjustment to cover a possible $1 billion shortfall in meeting pay-as-you-go budget rules.
Democratic leaders also were working to whip up votes for what is expected to be a close vote in the House, and to placate the White House, which earlier this week said it was considering a veto of the bill if it repeals subsidies for big oil companies and requires 15 percent of electricity produced by 2020 to come from renewable sources like wind and solar. . .
Stephanie Herseth Sandlin, D-S.D., said she believed that the bill would win support from enough Blue Dogs to pass the House.
“It will have the support of some of them. I hope it will be enough,” she said.
But Rep. Gene Green, D-Texas, said Tuesday that he would not support the legislation because it would repeal tax breaks for oil and gas companies.
Another Blue Dog, Agriculture Chairman Collin C. Peterson, D-Minn., said he had been told the floor vote on the bill would probably slip to Thursday.
The House of Representatives is planning to vote this afternoon on the energy bill compromise, following an emergency meeting of the House Rules Committee yesterday evening to allow for “consideration of the Senate amendments to the bill (H.R. 6) to reduce our Nation’s dependency on foreign oil by investing in clean, renewable, and alternative energy resources, promoting new emerging energy technologies, developing greater efficiency, and creating a Strategic Energy Efficiency and Renewables Reserve to invest in alternative energy, and for other purposes.”
As prefigured by John Dingell’s participation in the details of the CAFE component of the energy bill deal, the American auto industry is lending its support to the bill, a sharp reversal from its heavy lobbying against the standards in previous months.
Automakers, which have successfully blocked raising passenger car standards for more than two decades, objected to a 40 percent increase, saying it would cost them billions to comply and could force them to make fewer of their biggest, most profitable models.
But General Motors Corp. Chairman and CEO Rick Wagoner said in a statement Saturday that the Detroit automaker will meet the new challenge.
“There are tough, new CAFE standards contained in the energy bill before Congress that pose a significant technical and economic challenge to the industry,” Wagoner said. “But, it’s a challenge that GM is prepared to put forth its best effort to meet with an array of engineering, research and development resources. We will continue our aggressive pursuit of advance technologies that will deliver more products with more energy solutions to our customers.”
Toyota Motor Corp. praised congressional leaders for “taking this very important step toward establishing new, aggressive nationwide fuel economy standards.”
“Toyota will not wait for new standards to be set, but will move forward expeditiously to apply advanced technologies to improve the fuel economy of our fleet,” said Jo Cooper, Toyota’s vice president for government affairs in North America.
Dave McCurdy, president and CEO of the Alliance of Automobile Manufacturers, the trade group that represents Detroit’s Big Three, Toyota, Daimler AG and five other automakers, said “this tough, national fuel economy bill will be good for both consumers and energy security. We support its passage.” Mike Stanton, who is president and CEO and the Association of International Automobile Manufacturers, the trade group that represents Toyota, Honda Motor Co., Nissan Motor Co. and Hyundai Motor Co., among others, expects his members to support the compromise. “We wanted Congress to act,” Stanton said in an interview. “It’s not perfect, but I think we’re going to be pleased.”
- CAFE Standard: Increase fuel economy standards to 35 miles per gallon by 2020 for new cars and trucks
- Renewable Fuels Standard: Multiple-source domestic biofuels mandate with environmental safeguards
- Plug-in hybrid/electric vehicle tax credit and advanced vehicle incentives
- Repeal of $21 billion in tax subsidies for gas and oil companies (H.R. 6), international tax loophole closed, rollback of 2005 Energy Act tax breaks
- Renewable Electricity Standard: 15% by 2020 (4% may be efficiency)
- Efficiency Standards: new appliance and building standards
- Renewable Production Tax Credit and other incentives: extends existing PTC, funds renewable research, provides renewable energy bonds for power providers
- Energy Efficiency and Renewable Energy Worker Training Program
- Incentives for small business development of renewable energy technology
- Carbon Capture and Sequestration: R&D and clean coal incentives
Full details of the legislation are below the fold.
Energy Independence and Security Act
The New Direction Congress is poised to pass an ambitious legislative agenda to put us on a path toward energy independence—to strengthen national security, lower energy costs, grow our economy and create new jobs, and begin to reduce global warming. We are doing so by investing in the future of America with the passage of the Energy Independence and Security Act.
Specifically, we are taking groundbreaking steps to increase the efficiency of our vehicles, making an historic commitment to American grown biofuels, requiring that 15 percent of our electricity come from renewable sources, and strengthening energy efficiency for a wide range of products, appliances, lighting and buildings to reduce energy costs to consumers. We are repealing tax breaks for profit-rich oil companies, so that we can invest in clean renewable energy and new American technologies. Not only would this reduce our dependence on foreign oil, the measure would also save consumers billions of dollars.
This agreement with the Senate builds on the New Direction for Energy Independence, National Security, and Consumer Protection Act (H.R. 3221, and H.R. 2776) passed this summer, which includes wide-ranging solutions from 10 House committees. With passage of this measure, we are reducing carbon emissions that cause climate change and increasing our energy independence. The House will move forward next year with the next major effort to reduce global warming.
Strengthen our National Security by Reducing our Dependence on Foreign Oil
Historic Fuel Economy Standards for Cars and Trucks, Endorsed by Environmentalists and the Automobile Industry. The price at the pump demands groundbreaking and historic provisions to increase fuel economy standard to 35 miles per gallon by 2020 for new cars and trucks. These provisions will save American families $700 – $1000 per year at the pump, with $22 billion in net consumer savings in 2020 alone. This is the first increase by Congress since 1975 – marking a significant advancement in our efforts to address our energy security and laying the groundwork for climate legislation next year. The bill ensures that fuel economy standard will be reached, while offering flexibility to automakers and ensuring that we keep American manufacturing jobs and continue domestic production of smaller vehicles. It will reduce oil consumption by 1.1 million gallons per day in 2020 (one-half of what we currently import from the Persian Gulf), and reduce greenhouse gases equal to taking 28 million of today’s average cars and trucks off the road.
Renewable Fuels Standard/Historic Commitment to Homegrown Biofuels. The initiative includes a historic commitment to American biofuels that will fuel our cars and trucks – with a robust increase in the Renewable Fuels Standard. This isn’t just about the Midwest – this is about diversifying our energy crops from coast to coast. Whether it is sweet sorghum in Texas, rice straw in California, or corn stover in Minnesota, we will create American jobs and protect the environment. The measure ensures that biodiesel and cellulosic sources, such as switchgrass, are a key part of the increase. It includes critical environmental safeguards to ensure that the growth of homegrown fuels helps to reduce carbon emissions and does not degrade water or air quality or harm our lands and public health. The plan includes incentives to boost the production of biofuels and the number of Flex Fuel and other alternative fuel vehicles.
Incentives for Hybrids. It establishes a plug-in hybrid/electric vehicle tax credit for individuals and encourages the domestic development and production of advanced technology vehicles and plug-in hybrid vehicles.
Repealing Big Oil Giveaways to Invest in Renewable Energy. The measure repeals about $21 billion in tax subsidies for Big Oil, mainly including provisions from H.R. 6, which passed the House in January, and the President’s budget. It closes a loophole written into the international tax bill (H.R. 4520) and rolls back the 2005 Energy Bill tax break for geological and geophysical expenditures.
Lower Energy Costs with Cleaner Energy, Greater Efficiency, and Smarter Technology
Historic Step – Electricity from Clean Renewable Sources. This provision, which was contained in the House-passed bill, requires utilities to generate 15 percent of electricity from renewable sources – such as wind power, biomass, wave, tidal, geothermal and solar – by 2020. It permits utilities to meet up to 4 percent of their target through energy efficiency. A 15 percent Renewable Electricity Standard will reduce global warming emissions and lower energy prices and fossil fuel and natural gas consumption and is endorsed by a broad range of businesses, manufacturers, electric utilities, environmental, labor, farm, and faith-based organizations.
Landmark Energy Efficiency to Bring Down Costs. It includes landmark energy efficiency provisions that would save consumers and businesses hundreds of billions of dollars through 2030. It would require more energy efficient appliances, such as dishwashers, clothes washers, refrigerators and freezers, and would speed up Energy Department action on new efficiency standards after six years of delay. It would require improved commercial and federal building energy efficiency and assist consumers in improving the efficiency of their homes.
Incentives for the Renewable Energy Economy. It strengthens and extends existing renewable energy tax credits, including solar, wind, biomass, geothermal, hydro, landfill gas and trash combustion, while creating new incentives for the use and production of renewable energy. It bolsters research on solar, geothermal, and marine renewable energy. The bill provides new clean renewable energy bonds for electric cooperatives and public power providers to install facilities that generate electricity from renewable resources.
Create New Jobs and Reduce Global Warming
A Skilled Green Workforce. This package creates an Energy Efficiency and Renewable Energy Worker Training Program to train a quality workforce for “green” collar jobs – such as solar panel manufacturer and green building construction worker – created by federal renewable energy and energy efficiency initiatives. Major investments in renewable energy could create 3 million green jobs over 10 years.
Small Businesses Leading in Renewable Energy. The bill increases loan limits to help small businesses develop energy efficient technologies and purchases; provides information to small businesses to reduce energy costs; and increases investment in small firms developing renewable energy solutions, recognizing the leadership of entrepreneurs in the alternative energy sector.
Energy Efficiency Reduces Carbon Dioxide. The landmark fuel efficiency standard, renewable electricity standard and energy efficiency provisions will not only save consumers and businesses money, but will also significantly reduce carbon dioxide emissions.
Making Coal Part of the Solution. This initiative takes aggressive steps on carbon capture and sequestration to come up with a cleaner way to use coal – authorizing a nationwide assessment of geological formations capable of sequestering carbon dioxide underground and expansive research and development, including large-volume sequestration tests in a variety of different geological formations. It includes incentives for clean coal, which for the first time ever include a requirement for carbon sequestration.
In a letter to Congress, White House economic advisor Allan Hubbard reiterated President Bush’s October 15 veto threat of the energy bill deal brokered by the Democratic leadership, leaving no room for compromise from the president’s demands.
On October 15, I wrote you to outline a basic framework for a bill that would not compel the President’s senior advisors to recommend a veto. Based on the limitd information we have received, it seems the provisions under discussion would not satisfy those criteria. In fact, it appears Congress may intend to produce a bill the President cannot sign.
The Administration continues to believe that all the elements described in my earlier letter constitute the appropriate framework for energy legislation. Press reports indicate that your draft energy bill would fail to meet at least some of these conditions, for example by including a mandatory Renewable Portfolio Standard (RPS), a title increasing taxes, or an expansion of Davis-Bacon prevailing wage requirements.
Further criticisms include the difference between the Congressional renewable fuels standard and the White House’s preferred “alternative fuels standard”, and not excluding the EPA’s Clean Air Act authority from CAFE regulation.
The full letter is available here.
On Saturday, Sen. Pete Domenici (R-N.M.), ranking member of the Senate Energy and Natural Resources Committee, challenged the energy bill deal brokered by the Democratic leadership, attacking the inclusion of a Renewable Portfolio Standard (also known as the renewable electricity standard).
For weeks, my staff, along with Senator Bingaman’s, has been engaged in good faith negotiations with the House under a defined set of parameters laid out at the start of the process. We have made substantial bipartisan progress toward finalizing a bill. The legislation we have been working on contained a robust, much-needed Renewable Fuels Standard, important provisions on energy efficiency and carbon sequestration, and a long overdue increase in fuel economy standards. The parameters agreed to by Speaker Pelosi and communicated to us by Senate Democrats did not include a renewable portfolio standard.Domenici complained particularly about what he saw as a lack of good faith.
At this time, I have instructed my staff to cease their work on the energy bill, since the final bill apparently will not be the product of our bipartisan negotiations. As someone who has been working for 35 years to forge bipartisan, good-faith compromises on tough issues like the federal budget and energy policy, I know that your word means everything. It is particularly disappointing for me to see that such a sentiment seems to be a thing of the past.
Sen. Domenici himself has failed to maintain such bipartisan compromises on this very bill. During the May committee markup of the Senate version of the energy bill (S. 1321, H.R. 6), Sen. Domenici failed to maintain a bipartisan deal to avoid controversial amendments during markup—Democrats had agreed not to introduce RPS in committee, and Domenici claimed Republicans would not introduce coal-to-liquids language. However, Sen. Craig Thomas, R-Wyo., introduced a coal-to-liquids amendment, breaking the deal.
Friday afternoon the Democratic leadership in Congress announced the results of the energy bill negotiations that began in August and went into overdrive during the Thanksgiving recess, particularly once Rep. John Dingell (D-Mich.) signaled his willingness to support the 35 MPG CAFE standard as long as some technical provisions were included.
CAFE will serve as the cornerstone of the energy legislation that will be on the House floor next week. We will achieve the major goal of increasing vehicle efficiency standards to 35 miles per gallon in 2020, marking an historic advancement in our efforts in the Congress to address our energy security and laying strong groundwork for climate legislation next year. We are confident that this final product will win the support of the environmental, labor and manufacturing communities.
This landmark energy legislation will offer the automobile industry the certainty it needs, while offering flexibility to automakers and ensuring we keep American manufacturing jobs and continued domestic production of smaller vehicles.
This comprehensive package will also include an increase in the Renewable Fuels Standard and a Renewable Electricity Standard, among other key provisions.
Translation of Pelosi’s statement:
“Offering flexibility to automakers”: The flex-fuel credit will extend to 2014, and be phased out by 2020.
“Continued domestic production of smaller vehicles”: The standards will distinguish between foreign-made and domestic vehicles
“Among other key provisions”: the status of the oil/gas subsidy rollback and related tax package, including the Production Tax Credit, is still under negotiation.
More details on the likely energy bill compromise are emerging. It appears that the renewable electricity standard and oil subsidy rollback provisions of the energy bill (H.R. 6/H.R. 3221), are being dropped, perhaps to be considered as a separate bill (per H.R. 2776) either concurrently or in the next year. The associated renewable incentives and research funds paid for by the rollback would have to also be dropped under pay-go rules.The rollback was a key component of Speaker Pelosi’s 100 Hours Agenda:
We will energize America by achieving energy independence, and we will begin by rolling back the multi-billion dollar subsidies for Big Oil.
Reaching agreement on that timetable is likely to require Congressional leaders to drop provisions like a mandate that electric utilities nationwide generate 15 percent of their power from renewable sources, including wind, solar and hydroelectric power. Utilities lobbied intensively against that requirement.
A House-passed measure to repeal $16 billion in tax breaks for the oil industry is also expected to be scrapped, aides said. President Bush threatened to veto the entire package if the oil and gas tax bill were included.
Speaker Nancy Pelosi is pushing for a vote next week on compromise legislation aimed at reducing the nation’s reliance on fossil fuels, a major source of greenhouse gases. Democratic leaders have wrestled for months with how to meld the Senate bill, which includes a new fuel-economy mandate for auto makers, and the House bill, which would require power companies to use greater amounts of wind, solar and other renewable fuels. With only a few weeks left in the year, Democrats are now considering a new option: moving two separate bills.
One measure would include the proposed fuel-economy increase as well as a proposal to boost production of ethanol and related biofuels. The companion bill would include the utility mandate, as well as a tax package rolling back oil industry tax breaks.
CQ (subs. req.):
With oil nearing $100 per barrel and high prices at the gasoline pump, an agreement on corporate fuel economy standards is perhaps the most significant development to come out of the informal negotiations, which were launched after Republicans blocked a conference because they objected to provisions that would have increased taxes on the oil and gas industry and a requirement to have the nation’s electric utilities produce a percentage of their power from renewable sources.
Those tax and “renewables” provisions were in the House-passed bill but absent from the Senate legislation. Lobbyists said it was likely that they would be taken up next year in a separate bill, or as part of House legislation to address climate change.
EE News (subs. req.):
Sources on and off Capitol Hill said Democratic leaders may try to move the oil taxes and renewable electricity provision as a separate bill, or even abandon them for the year.
A Democratic aide close to the talks said House Democratic leaders “remain committed” to keeping these provisions. But both provisions face Senate roadblocks and would almost certainly draw GOP-led filibusters, which require 60 votes to overcome.
The House bill requires utilities to provide 15 percent of their power from renewable sources by 2020, though roughly a fourth of the requirement can be met with energy efficiency measures.
Pelosi and Senate Majority Leader Harry Reid (D-Nev.) both support the plan, but it has run into stiff resistance, especially among Southeastern GOP lawmakers who claim their states lack enough renewable resources to meet the mandate.
The renewable electric power standard is a top priority of environmental groups. Marchant Wentworth, a lobbyist for the Union of Concerned Scientists, said environmentalists are fighting to keep the provision alive. “It is a vital part of any comprehensive energy package,” he said.
The Bush administration, however, has issued veto threats over increased oil industry taxes and a renewable electric power mandate.
According to a report in the National Journal’s subscription-only Congress Daily, Congress is nearing a compromise to resolve the differences between the Senate (HR 6) and House (HR 3221) versions of the comprehensive energy package. Major sticking points have been CAFE standards, renewable fuels mandate, a federal renewable energy standard, and renewable energy tax incentives (the renewable production tax credit (PTC)).Speaker Pelosi indicated the sense of progress in a press release Monday:
Congress is now moving forward with historic energy legislation that will reduce our dependence on foreign fuels and promote energy efficiency. We have made significant progress toward completing this package and hope to have a final agreement next week.
The draft compromise, according to Congress Daily and Hill Heat sources, incorporates suggestions from Rep. John Dingell (D-Mich.)’s November 13 letter to Speaker Pelosi.CAFE
- By 2020, 35 mpg average standard for cars, light trucks and SUVs (in line with HR 6)
- Separate fuel-economy standards for cars and trucks
- Distinctions between domestic and foreign-made vehicles in standards
- By 2015, required production of 20.5 billion gallons of renewable fuels, with as much as 15 billion gallons coming from corn-based ethanol (HR 6 had 36 billion by 2022)
- By 2015, required production of 5.5 billion gallons of advanced biofuels—fuel not derived from sugar or starch and that can cut lifecycle greenhouse gas emissions in half
- National Academy of Sciences study within 18 months of mandate impact, followed by periodic reviews authorized by the Clean Air Act of technologies and the feasibility of complying with the mandate
- According to Hill Heat sources, the extension of the PTC is likely, though perhaps for as little as one year.
Deal Near On Fuel Efficiency, Renewables In Energy Bill
Negotiators have proposed scaling down a Senate renewable fuels mandate and are nearing a deal on raising fuel efficiency standards, sources said today. Under the deal being discussed, refiners would be required to produce 20.5 billion gallons of renewable fuels by 2015, with as much as 15 billion gallons coming from corn-based ethanol, according to draft House language. The Senate-passed version would have required the production of 36 billion gallons of renewable fuels by 2022. The draft would mandate that 5.5 billion gallons of advanced biofuels – fuel not derived from sugar or starch and that can cut lifecycle greenhouse gas emissions in half – must be produced by 2015. The draft plan might trigger limits starting in 2016 to further increases in renewable fuels production based on the impact renewable fuels production has on the environment, energy security, consumer prices and other factors. Critics – including refiners, livestock groups and grocery manufacturers – say the draft sets unreasonable production mandates. “We don’t think that the volumes that are called for in this draft have any basis in reality,” said an oil refinery lobbyist. It would require a National Academy of Sciences study within 18 months on the impact of the renewable fuels mandate followed by periodic reviews authorized by the Clean Air Act of technologies and the feasibility of complying with the mandate.
Negotiators are also close to a bipartisan deal raising the average standard for cars, light trucks and SUVs from 25 miles per gallon to 35 mpg by 2020, according to lobbyists following the talks. This would echo the Senate-approved plan. In a nod to automakers, the deal would adopt separate fuel-economy standards for cars and trucks and try to preserve domestic production of fuel-efficient cars, lobbyists said. This would be in line with a letter House Energy and Commerce Chairman Dingell sent Speaker Pelosi this month indicating his willingness to accept fuel efficiency that uses the Senate plan as its base while incorporating changes sought by automakers. Congressional aides say negotiations continue. Lawmakers might take up an energy bill as early as next week. Pelosi issued a statement Monday indicating that lawmakers have made “significant progress toward completing the package and hope to have a final agreement next week.” Aides have an internal deadline of Wednesday evening to finish an energy bill so it can be officially drafted and reviewed by lawmakers, lobbyists said. —by Darren Goode