On Monday thousands of young energy and climate leaders will descend on Capitol Hill to send a message to Congress: we must pass the energy bill before Congress (HR 3221) so we can begin the transition towards a cleaner, safer, more prosperous future without oil dependence or global warming.
The day of events starts with several of these leaders appearing before Chairman Edward J. Markey and the Select Committee on Energy Independence and Global Warming. Chairman Markey and those testifying will then travel to the West Lawn of the Capitol to meet thousands of supporters who will call for more green jobs, more renewable energy, and higher fuel economy standards, among other clean energy measures.
Congress is currently considering energy legislation that would raise fuel economy standards for America’s vehicles to 35 miles per gallon by 2020, increase the use of renewable energy, and create millions of new “green collar” jobs.Witnesses
- Billy Parish, Energy Action Coalition
- Brittany R. Cochran, Environmental Justice and Climate Change Initiative
- Cheryl Lockwood, Alaska Youth for Environmental Action
- Katelyn McCormick, Students Promoting Environmental Students
- Mike Reagan, California PIRG
The Environmental and Energy Study Institute (EESI) invites you to learn about national renewable electricity portfolio standards such as the one included in the House energy bill (HR 3221, Sect. 9611) as the House and Senate go to conference on the energy bill. A Renewable Portfolio Standard (RPS) is a market-based mechanism that requires utilities to gradually increase the portion of electricity produced from renewable resources such as wind, biomass, geothermal, solar, incremental hydropower and marine energy. Twenty-five states and the District of Columbia have RPSs, covering over 40 percent of the nation’s electrical load. A national RPS has passed the Senate in the last three Congresses, although it is not included in the Senate energy bill (HR.6).
A national RPS has many attributes that can benefit all states, including lowering natural gas prices, providing manufacturing jobs, improving air quality, reducing greenhouse gas emissions and creating larger, stable markets for renewable energy technologies. A June analysis by the US Energy Information Administration (EIA) of a national RPS proposed by Senate Energy Committee Chair Bingaman (D-NM) requiring electric utilities to acquire 15 percent of their electricity from renewable energy sources by 2020, found net consumer cost to increase just 0.3 percent through 2030 compared to the reference case. EIA also found that by 2030, prices for natural gas and coal, two key fuels for the electric power sector, are lower with the RPS than in the reference case. Speakers for this event include:
- Leon Lowery, Majority Staff, Senate Committee on Energy and Natural Resources
- Chris Namovicz, Operations Research Analyst, Energy Information Administration
- Dr. Marie Walsh, Adjunct Associate Professor, Dept. of Agricultural Economics, University of Tennessee
- Jeff Deyette, Energy Analyst, Union of Concerned Scientists
- Bill Prindle, Deputy Director, American Council for an Energy-Efficient Economy
Some are concerned that not all states, particularly those in the Southeast, have sufficient renewable resources to satisfy a national RPS. In 2005, bioenergy was the largest component of renewable electricity production in the nation, comprising 56 percent of all renewable electricity and 1.3 percent of total electricity. This percentage can be increased significantly since each state has important biomass resources that can be utilized sustainably to produce clean, renewable, domestic energy. According to the EIA analysis, biomass generation-from dedicated biomass plants and existing coal plants co-firing with biomass fuel-grows the most by 2030, more than tripling from 102 billion kilowatt-hours (kwh) in the reference case to 318 billion kwh with the RPS policy. In addition to renewable energy, HR 3221 includes four percent energy efficiency (25 percent of the RPS credits) as part of the standard, which allows states to make use of low-cost efficiency opportunities to help meet the standard. At least three states (including Nevada, North Carolina, and Pennsylvania) include energy efficiency as part of their RPS. In August 2007, North Carolina enacted a Renewable Energy and Energy Efficiency Portfolio Standard requiring all investor-owned utilities in the state to supply 12.5 percent of 2020 retail electricity sales in the state from eligible energy resources by 2021.
Loan Guarantee Provisions in the 2007 Energy Bills: Does Nuclear Power Pose Significant Taxpayer Risk and Liability? 1
The Environmental and Energy Study Institute (EESI) invites you to learn about the loan guarantee provisions in the 2007 energy bills that have passed the House and Senate and await conference (HR. 6/HR. 3221). The Senate bill’s provision would significantly alter how the Department of Energy (DOE) provides taxpayer-funded loan guarantees for new energy technologies, especially to costly nuclear power plants. Section 124(b) of the Senate bill (HR. 6) allows loan guarantees to be given to multiple projects to construct an existing nuclear power design; exempts DOE’s loan guarantee program from Sec 504(b) of the Federal Credit Reform Act of 1990 (FCRA) which allows DOE to write unlimited loan guarantees without Congressional oversight; and gives DOE unfettered access to the Incentives for Innovative Technologies Fund (EPACT 2005) without requiring appropriations or any fiscal year limitation. This provision, if adopted, would eliminate Congressional authority and the safeguards provided through the appropriations process regarding expenditures for these potentially risky projects and shift enormous financial risk from Wall Street banks to America’s taxpayers. The House-passed legislation on loan guarantees is different; it says that no eligible technology can be excluded from consideration from loan guarantees.
Because of the likelihood of delays and cost overruns in building new nuclear power plants, Wall Street banks are unwilling to accept any financial risks for nuclear power loans. Six of the nation’s largest investment banks-Citigroup, Credit Suisse, Goldman Sachs, Lehman Brothers, Merrill Lynch, and Morgan Stanley- recently told the DOE, “We believe these risks, combined with the higher capital costs and longer construction schedules of nuclear plants as compared to other generation facilities, will make lenders unwilling at present to extend long-term credit.” Our briefing panel will discuss whether the loan guarantee provisions constitute a significant taxpayer liability and/or poor governance. Speakers include:
- Peter Bradford, President, Bradford Brook Associates; former Chair, New York State Public Service Commission and Maine Public Utilities Commission; and former Commissioner, U.S. Nuclear Regulatory Commission
- Jerry Taylor, Senior Fellow, Cato Institute
- Jim Harding, CEO, Harding Consulting
- US Government Accountability Office (GAO)
Not only is the cost to the taxpayers potentially very high, so is the risk. The Congressional Budget Office has said there is a good chance that the DOE will underestimate the costs of administering these loans and that more than 50 percent of new reactor projects will default on their loan repayments, leaving taxpayers at risk. U.S. taxpayers will be fully liable for any potential shortfalls. The nuclear industry ask is $25 billion for FY 2008 and more than that in FY 2009-more than $50 billion in two years. According to the Congressional Research Service, this is more than the $49.7 billion spent by the DOE for all nuclear power R&D in the 30 years from 1973-2003. This is also well over the Administration’s target of $4 billion in loan guarantees for nuclear and coal for FY 2008.
This briefing is open to the public and no reservations are required.
Last week the Union of Concerned Scientists released a new version of “Cashing In on Clean Energy”, judging the economic and environmental effects of a 15% renewable electricity standard (RES) by 2020 (aka renewable portfolio standard (RPS)), the standard called for in HR 3221, the House energy bill. [The Senate version did not include the Bingaman amendment of the same standard, and the provision is at the negotiating table; the initial UCS study looked at a 20% by 2020 standard; the 1Sky/Step It Up campaign calls for 20% by 2015.]Using an Energy Information Administration (EIA) model, The UCS found the following:
- Consumer savings would equal $13 billion to $18.1 billion in lower electricity and natural gas bills by 2020 (growing to $27.7 billion to $31.8 billion by 2030 if the standard does not increase)
- Clean, renewable energy capacity would increase between 3.6 and 4.5 times over 2005 levels
- Reductions in global warming pollution equal to taking between 13.7 and 20.6 million cars off the road
Under our “lower renewable energy case”: (1) all states opt into a provision that allows electric service providers to use energy efficiency to meet up to 27 percent of their annual targets, and (2) additional renewable energy generation from electric power providers having to meet higher targets under state standards is eligible. Under the “higher renewable energy case”: (1) states with renewable standards that are higher than the federal targets (there are 18) do not opt into the energy efficiency provision, and (2) additional renewable energy generation used to meet state standards is retired and not eligible for use under the national standard.
After negotiations with key Republicans, Senate Majority Leader Harry Reid said Friday he was prepared to seek a conference with the House on energy policy legislation.
“The Speaker wants to go to conference. I want to go to conference,” Reid, D-Nev., said on the floor Friday. “We know we can’t do a bill unless we include the Republicans in it.”
The unanimous consent to move to conference was blocked on a procedural basis by John Cornyn, R-Texas, Friday afternoon because many senators were traveling, but no objections were expected this week.
That said, the battle over CAFE standards remains strong, with the auto industry lobbying hard for the weaker Hill-Terry language (HR 2927). Last week GM Chairman and CEO Rick Wagoner met with Al Hubbard, director of the National Economic Council, Nicole Nason, the administrator of the National Highway Traffic Safety Administration, and EPA officials, and Ford CEO Alan Mulally is expected in DC this week.Meanwhile, the natural gas industry is calling for expanded drilling:
The American Petroleum Institute, Independent Petroleum Association of America, and seven other trade associations representing natural gas producers, pipelines, and consumers jointly expressed strong concern Oct. 19 about US House energy legislation that they believe would reduce instead of increase domestic gas supplies. . . . The 2005 Energy Policy Act contains several provisions to encourage production in frontier areas, including ultradeep water, ultradeep gas, and offshore Alaska, which HR 3221 seeks to repeal, they said.
- The controversial standard legislation – fuel economy (CAFE) and renewable fuels (RFS) from the Senate bill (HR 6), and renewable energy (RPS) from the House bill (HR 3221) – “will be worked out behind closed doors between House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid”, with staff-level discussions this week
- Opponents of the CAFE legislation in the Senate bill continue a last-ditch effort to advocate Hill-Terry (HR 2927) and get Senators to switch their votes. The coalition, led by Energy and Commerce chair John Dingell, includes:
- Dingell’s staff is meeting with the leadership staff for the closed-door negotiations, but he is leaving the door open to blocking the energy bill: “I’m not foreclosing any option. I don’t make the jungle. I just live there.” He also said that trying to get a bill completed before the scheduled October 26 recess “is to invite a disaster.”
From CQ Greensheets:
Energy Talks to Begin, But Not on 3 Key Issues By Coral DavenportFrom Detroit News:
Negotiations on a major energy bill begin Monday — but Democratic leaders have already drawn fire for taking the three biggest and most contentious issues off the table. The three issues those leaders cite as their top priorities in crafting new energy policy — raising vehicle fuel economy standards and setting nationwide mandates for renewable fuels and electricity — will not be up for discussion as Energy Committee staffers from both chambers and parties convene to start hammering out a compromise bill.
Instead, those highly controversial provisions — which, if enacted, would signal a new direction in U.S. energy policy — will be worked out behind closed doors between House Speaker Nancy Pelosi, D-Calif., and Senate Majority Leader Harry Reid, D-Nev., say congressional aides.
Whatever bill emerges from the staff and leadership talks will then have to be sent back to both chambers for passage.
Each of those initiatives passed one chamber, but not the other, this summer as part of a larger energy bill. The Senate passed a measure (HR 6) that would significantly raise fuel economy standards for cars and light trucks and would mandate production of 36 billion gallons of biofuels by 2022. The House bill (HR 3221) would require 15 percent of the nation’s electricity to come from renewable sources by 2020.
But lawmakers question whether one bill containing all three contentious measures could make it through both chambers this year, especially as the fuel economy and renewable electricity provisions have divided Democrats, making a majority uncertain. Analysts say that appears to be the reason congressional leaders are keeping those pieces off the negotiating table, and trying to engineer the bill themselves — a strategy that has drawn plenty of criticism from Republicans.
“I think the notion of establishing a negotiation framework where the three biggest elements of the plan are off the table is a fraud,” said Chris Tucker, communications director for House Republican Whip Roy Blunt, R-Mo.
Many Republicans may not even attend the initial negotiations, in order to protest their inability to weigh in on the three key pieces. “At this time it’s unclear if Republicans are going to be attending talks on Monday,” said Matt LeTourneau, a spokesman for Senate Energy Committee Republicans. “One of our sticking points is that certain items are off the table. The issues that took up so much time on the Senate floor and House floor are not open for discussion.”
Charges of partisan perfidy in energy negotiations are not new: In 2003, the Republican chairmen of the Senate and House energy committees, Sen. Pete V. Domenici of New Mexico and Rep. W.J. “Billy” Tauzin of Louisiana, privately drafted a proposal for consideration by conferees on a major energy bill — a process one Democratic aide called “the illusion of inclusion.” The plan eventually won conference approval amid partisan bickering, but the bill ultimately failed.
While key issues may be off staffers’ negotiating table, that doesn’t appear to have deterred a major lobbying push on at least one of them: raising corporate average fuel economy, or CAFE, standards.
Efforts to legislate better vehicle mileage have been stalled for more than 20 years, but this summer’s Senate energy package included a provision that would require manufacturers to raise vehicle fleet averages to at least 35 miles per gallon by 2020 for cars, light trucks and sport utility vehicles.
Pelosi has said she strongly supports incorporating that provision in the final energy deal, but it has met with powerful pushback from a broad group of opponents, including The Alliance of Automobile Manufacturers and the influential Blue Dog Coalition, a group of fiscally conservative House Democrats. In the past, these groups have pushed against moves to raise CAFE standards entirely — but now they are pushing instead for a more modest House bill (HR 2927) by Reps. Baron P. Hill, D-Ind., and Lee Terry, R-Neb. Their bill would leave separate regulations in place for cars and “light trucks,” such as sport utility vehicles, while setting the overall fuel economy at 32 miles per gallon to 35 mpg by 2022.
That has brought along the support of groups that have previously opposed all efforts to tighten fuel economy standards, but who now say they would support a raise with separate standards for cars and light trucks. The push includes influential groups that depend on light trucks to do business, including the American Farm Bureau Federation; the American Recreation Coalition; Associated General Contractors; International Professional Rodeo Association; National Association of Plumbing, Heating and Cooling Contractors; and the Small Business and Entrepreneurship Council. Another key supporter of the Hill-Terry bill is powerful House Energy Chairman John D. Dingell, D-Mich., who has long been a key opponent of any raise in fuel economy standards, but has cosponsored the Hill-Terry measure.
Counter-lobbying by environmental groups is also in full force. “What this effort really boils down to is nothing more than an 11th-hour attempt by a boatload of lobbyists to scuttle a boosted fuel-economy standard that the Senate already passed,” said Deron Lovaas, a vehicles expert at the Natural Resources Defense Council.
But staffers say the Democratic leadership’s “off-the-table” strategy will likely keep that proposal out of discussions and the final product. “The chances for Hill-Terry getting into the mix are very slim,” said a Democratic leadership aide.
Doors close on energy bill
WASHINGTON – Rep. John Dingell, chairman of the House Energy and Commerce Committee, is disappointed a House-Senate committee won’t tackle legislation to improve the fuel economy of the nation’s vehicles.
Instead, House Speaker Nancy Pelosi has chosen Democratic leaders to write an energy bill – which would include provisions on fuel economy – behind closed doors, rather than through a conference committee of House and Senate negotiators. She cited Senate Republican opposition to appointing members.
“We cannot have a situation where if they don’t give us a conference, we don’t have a bill,” Pelosi said. “With or without a conference, we will proceed.”
However, Dingell, D-Dearborn, said conference committees “frankly work and (have) produced good legislation.” He said conference committees allow legislators of both parties to work together to produce a compromise that will make good law.
“It ought to be permitted to work, and the speaker has chosen otherwise,” Dingell said in an interview Friday. “I’m not going into this with a chip on my shoulder. I intend to try and work with her to achieve a good bill.”
In June, the Senate passed a bill 65-27 that hikes corporate average fuel economy, or CAFE, 40 percent – to a combined standard of 35 miles per gallon by 2020. Automakers have argued that bill would cost them billions. Dingell and the automakers have backed a House bill that’s softer than the Senate’s and gives automakers more time to comply.
In a formal conference committee, Dingell would have more leverage to strike a compromise.
Now, “Nancy Pelosi can write a bill in a dark room on the back of a napkin,” Rep. Mike Rogers, R-Brighton, said on Friday.
Dingell wouldn’t divulge whether he would mount an effort to kill an energy bill that was too harsh on automakers. “I’m not foreclosing any option,” he said. “I don’t make the jungle. I just live there.”
Dingell stressed too that he has not been cut out of the process. His staff will meet today with Democratic leadership staff to discuss the energy bill.
Drew Hammill, a Pelosi spokesman, said Friday there would be “talks” at the staff level this week and that the House speaker – who supports the Senate measure – hopes to have a bill completed before year’s end.
Trying to get a bill completed in “two weeks is to invite a disaster,” Dingell said. He said the Senate bill “has serious problems in the House.”
More than 170 House members have backed a rival fuel economy bill – dubbed “Hill-Terry” after its sponsors – that would increase fuel economy mandates at least 28 percent by 2022 to between 32 mpg and 35 mpg.
Auto lobbyists are growing worried that a bill similar to the Senate bill might be passed before the end of the session.
Privately, they have been lobbying some senators to reconsider their support of the bill that passed in June.
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.
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.
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.
- 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
The Committee on Rules is expected to meet Thursday, August 2, 2007 to grant a rule which may structure the amendment process for floor consideration of H.R. 2776, the Renewable Energy and Energy Conservation Tax Act of 2007, and H.R. 3221, the New Direction for Energy Independence, National Security, and Consumer Protection Act.
Any Member wishing to offer an amendment to H.R. 3221 must do so by 5:00 PM on Wednesday, August 1, 2007.