Wednesday, March 31, 2010

How American passenger trains got off-track

(Photo of Amtrak train in Virginia from Flickr and photographer Andrew Deci)

When I was a kid we often took the overnight train from New York to Toledo to see my grandparents. I loved climbing into my upper birth and looking out at the dark night as the train rattled along.

When I was a teen, our family went to the Canadian Rockies and down the West Coast to LA (Hollywood!) and back across the continent – all by train.

So I was shocked to learn that only 2-3% of Americans living today have been on an inter-city train, and only 3% commute by train. Living in Chicago, I would have guessed more like 20% commute by rail. But many (most) parts of the country don’t have train service.

Fifty years ago our railroads were the envy of all the world. Now they are the laughingstock.

How did that happen?

I bring this up after attending the annual meeting Saturday of the Midwest High Speed Rail Association, a large, active group (mostly men) that celebrated the fact we finally have a president who is pro-train and the Midwest has won a sizeable chunk of the $8 billion in stimulus money, in addition to part of $2.5B granted by Congress this year.

The keynote speaker was James McCommons, author of “Waiting on a Train.” He talked about the decline of trains in America at a time other countries (mostly Europe and Japan, but now increasingly other Asian nations) were advancing to high-speed “bullet” trains.

The decline of passenger rail
The book recounts what happened to trains after Amtrak was created in 1971 but not given enough money to prosper. Freight railroads, bleeding red ink because of their passenger service, were allowed to shed them so they could be profitable. (Note the U.S. is the only industrialized country with private railroads.) Since then, half the country’s rail infrastructure has been abandoned or torn up.

The result was an under-funded passenger network where trains were infrequent, in decay, filthy and usually late (as much as 15 hours cross-country). Some way to run a railroad!

General Motors, which made the diesel engines, encouraged railroads (the tracks were still owned by the freight-rail companies) to tear out the overhead electrical lines, which then made it more difficult for them to ever start running high-speed electrified trains.

Amtrak, whose passenger population has grown since gasoline got more expensive, has uneven service across the country. The best and fastest is in the Northeast Corridor, the electrified Acela line from Washington to New York and Boston, is capable of 200 mph but rarely reaches 150 and averages about 88 mph.

In most places, Amtrak hasn’t put in safety equipment required for running 80mph, so they average 79. The Obama Administration’s goal for “high speed” is 125 mph. The Midwest High Speed Rail Association’s is 220, like the bullet trains in Europe and Asia.

Amtrak owns the tracks in the Northeast Corridor, which is doing very well, thank you. Elsewhere, passenger trains are frequently sidelined for hours to let the more profitable freight trains go through.

Some in Washington have argued that if trains can’t make a profit, they should be allowed to die. But highways are built and maintained by government. And it also builds airports and provides them with air traffic control and security.

And you may have noticed airlines are now running into the same financial problems trains did, and are cutting service and dropping routes.

Still a place for trains
There’s new interest in trains because they produce less greenhouse gases than the other modes of transportation. Trains have other advantages too:
• They’re safer.
• They can run in bad weather.
• They don’t require security checks (though maybe they should).
• You can use wifi and cell phones.
• You can go to the lounge car and chat with other passengers if you want (you can even drink and not drive)

By comparison, highways are getting increasingly congested and airline travel is no longer fun. With the population continuing to grow, all three modes of travel will be needed to carry the traffic.

But until and unless trains become more frequent, reliable and well maintained, not many people will want to climb aboard. Passenger numbers relate strongly to frequency. And on most routes there simply aren’t enough trains available to provide frequent service.

Next: Plans for a resurgence.

(Sources: “Waiting on the Train” by James McCommons, Midwest High Speed Rail Assn.)

Monday, March 29, 2010

Are Europe and Asia beating the U.S. at attracting clean energy investment and new energy jobs?

(Photo of Europea wind turbine factory from Flickr and photographer Jody Dickerson)

Is the U.S. economy losing out to Europe and Asia in the competition for a green energy future?

On the heels of my post last week about China hording rare earth minerals needed for clean energy production, I noticed with some concern three news items over the past few days:

*BP is closing its solar-panel plant in Maryland and moving the business to China, India or another country where production is cheaper and demand is higher. BP is partnering with Tata in India and SunOasis in China. The closure is the final step in moving BP’s U.S. solar manufacturing business abroad. It will mean 320 jobs lost, though 100 jobs will remain here in research and sales, the company says.

*GE said it is investing $453 million in European offshore wind through 2020, most of it in England and Germany. Norway and Sweden will also get a piece of the pie. The company hopes to mass produce its 4MW offshore turbine by 2012. Because Europe is moving ahead on both land and offshore wind, the biggest growth is seen there and suppliers are available. Billions have been spent on onshore wind in Europe over the past decade, with both Spain and Denmark now getting half their electricity from wind.

*Siemens, the international German-based conglomerate, with investments around the world, has targeted England for a $120 million factory for offshore wind turbines. England was chosen over Germany and Denmark because of government incentives in the form of a $90M competition. England is now 5th in renewable energy, tied with Spain.

Do I see a trend here?

(Source: Reuters, Washington Post, PlanetArk, Greenwire)

Thursday, March 25, 2010

Home Star rebate plan OK'd by House panel

(Photo of energy-efficiency retrofit from Flickr and the Center for Neighborhood Technology)

Home Star, a residential energy-efficiency rebate program, was approved Wednesday by a House Energy and Commerce subcommittee.

The program, touted by the Obama Administration, would give 50% rebates of up to $1,500 for retrofitting homes to make them more energy-efficient. The rebates would come to consumers through the contractors doing the work. For an entire home upgrade, the rebate could be as much as $3,000.

Backed by the National Association for Manufacturers, the “Cash for Caulkers” bill is promoted as creating jobs and saving energy and therefore money and carbon emissions.

Democrats capped the bill at $6 billion, while Republicans said $1 billion was enough.

A similar bill is making its way through the Senate.

A related bill, Building Star, would provide rebates of up to 30% for commercial buildings.

For more on the Home Star program, see the White House Web site.

(Sources: E&E Daily, E&E News PM)

Wednesday, March 24, 2010

Rare earth minerals new reason to worry about China: It's hording supply needed for clean energy

Never heard of REM? You will. Rare earth minerals are 17 different metals, usually found together, that are needed to make clean energy products as diverse as electric car batteries, wind turbines and condensed fluorescent lightbulbs.

China has half the world’s reserves but is steadily slowing exports to meet it’s own increasing needs. We have been importing 90% of what we use from them. But by 2013 China may be using all its REM itself.

A Congressional subcommittee heard last week that we need to come up with a solution to that problem in the next two years or we won’t be able to compete.

The Department of Energy announced last Wednesday it will devise a strategy to diversify the supply line, finds substitutes and recycle the metals.

Only one U.S. company, Molycorp, is mining the metals right now. (BTW, China tried unsuccessfully to buy Molycorp’s parent company, Unocal.) Molycorp was denied a DOE loan guarantee to expand and asked Congress last week for help.

Reserves also exist in Canada, Australia, India and Russia. But these metals are expensive and difficult to mine.

(Sources: E&E Daily, E&ENewsPM)

Monday, March 22, 2010

Enviro groups praise Kerry-Lieberman-Graham; but energy standard may include non-renewables

(Photo of nuclear plant from Flickr and photographers iluvcocacola/Bill and Vicki Tracey)

Twenty environmental groups praised the Kerry-Lieberman-Graham Senate climate bill Friday, despite the fact that it is business-friendly.

Meanwhile issues like a renewable energy standard, offshore-drilling revenue sharing, free permits for power plants, and pre-emption of EPA and states’ programs are still being discussed and resolved by the bill’s three authors.

Saying they are “encouraged by the progress” of the bill, which curbs emissions by 17% in 2020 and 80% in 2050, were the Alliance for Climate Protection, Sierra Club, Natural Resources Defense Council, Environment America, League of Conservation Voters, Environmental Defense Fund, National Wildlife Federation, Blue Green Alliance, Center for American Progress Action fund, Union of Concerned Scientists, National Tribal Environmental Council, Environment Northeast, National Audubon Society, Interfaith Power and Light, Conservation International, Defenders of Wildlife, Clean Water Action, Wilderness Society, Climate Solutions and Environmental Law and Policy Center.

In an effort to avoid industry’s heavy lobbying against the bill and draw bi-partisan support, the authors made major concessions on domestic oil and gas drilling, help for nuclear power, and support for “clean coal.” It has been positioned as a jobs and anti-pollution bill that reduces dependence on foreign oil.

Unresolved issues
With plans to show the bill to other Senators as early as tomorrow, the trio has been working to finalize several matters.

One involves state revenue sharing of offshore oil royalties. To give an incentive for state approval, which is needed to drill off their coastlines – even in federal waters – there is a proposal to give states 25% of what the federal government stands to gain. Another 10% would go in a Land and Water Conservation Fund. It remains to be seen if the west coast of Florida, the only area off-limits to offshore drilling, will have a change of status.

Another issue still unresolved is whether a renewable energy standard will be morphed into a “clean energy” standard, to include one or more of the following: nuclear power, which is greenhouse-gas-free but not renewable (big problem); natural gas (which has about half the emissions of coal); and coal plants that use carbon capture and storage. Sen. Lindsey Graham (R-N.C.) has floated a plan with a higher standard than last year’s Energy Committee bill (20% in 2020, rather than 15%), but it is a clean – not renewable – energy standard. Sen. Joe Lieberman (I-Conn.) clearly favors adding nuclear.

It also appears that power plants, the first to be affected by the bill, would get free pollution permits to start, in what now may be back to a cap-and-trade, or at least cap-and-dividend, system. And they would be able to use offsets, to protect forests and land here and abroad, to meet their quota. Power plants emit about 40% of all GHG.

Finally, the bill has a controversial section that takes aim at the EPA and states, pre-empting EPA regulation of GHG emissions and of hydraulic fracturing used to get natural gas out of shale. It will also override states’ and regions’ cap-and-trade plans. Some from states that are out front on climate change object, saying every level of government needs to be involved in the fight against climate change.

For those wanting to read more on the work-in-progress, a post on Grist and Wonk Room compares the current draft with Obama’s proposal and the Waxman-Markey bill passed by the House last summer.

Also, scroll down to see Earthling Angst posts over the past couple of weeks as this bill was fine-tuned after meetings with all sides.

(Sources: Reuters, E&E Daily, E&ENewsPM,

Sunday, March 21, 2010

29 governors ask feds to help increase wind power

(Photo of wind turbine from Flickr and photographer Caveman/Chuck Coker.)

Governors of more than half the states have recognized the potential of wind as a source of power.

As members of the Governors' Wind Energy Coalition , they are asking Congress and the Obama Administration for a national renewable energy standard (RES) and improved electrical grid that will enable wind to provide 20% of our power by 2030. Wind now makes up just 2%.

Among their asks are wind tax credits to be extended 5 years and $500 million to be allocated to research on offshore wind.

Is your governor in this association?

Read the group’s recommendations and see the list of members at the end.

(Sources: Environmental News Service and E&E News PM)

Saturday, March 20, 2010

Is your state for or against EPA regulation of greenhouse gases under the Clean Air Act?

States have split pretty evenly on one side or the other of a suit to block the EPA from regulating greenhouse gases under the Clean Air Act.

Seventeen states are suing to stop the EPA. Another 18 plus New York City are intervening on behalf of the agency. Friday, March 19, was the last day states could become part of the suit, consolidated by the court into Coalition for Responsible Regulation, Inc. v EPA.

Alabama, Texas and Virginia filed suits against EPA last month. Now Alaska, Florida, Hawaii, Indiana, Kentucky, Louisiana, Michigan, Mississippi, Nebraska, North Dakota, Oklahoma, South Carolina, South Dakota and Utah have joined in, along with 22 industry associations.

On the other side, backing EPA, are Arizona, California, Connecticut, Delaware, Illinois, Iowa, Maine, Maryland, Massachusetts, New Hampshire, New Mexico, Minnesota, New York, Oregon, Pennsylvania, Rhode Island, Vermont and Washington. They are joined by the Union of Concerned Scientists and Southern Environmental Law Center .

The petitioners are asking for a review of the EPA’s “endangerment finding” that greenhouse gases harm people’s health and welfare. The finding will result in regulations now being finalized.

The U.S. Supreme Court found in 2007 that the EPA has authority to make such a finding and regulate GHG. This suit is before the U.S. Court of Appeals in Washington, D.C.

(Sources: Greenwire)

Thursday, March 18, 2010

New climate bill would pre-empt EPA and states; authors meet with industry opposition

(Photo of Texas oil rig from Flickr and photographer K. Sawyer)

The Kerry-Lieberman-Graham climate bill would pre-empt EPA regulation of greenhouse gases, as well as state climate laws.

Those are a couple of the details that leaked out of a meeting yesterday with major industry opponents of past climate legislation.

Sens. John Kerry (D-Mass.), Joe Lieberman (I-Conn.) and Lindsey Graham (R-S.C.) met with the Alliance for Energy and Economic Growth behind closed doors, to share details of their work-in-progress. They did so in an effort to head off multi-million-dollar ad campaigns against their bill by the American Petroleum Institute, U.S. Chamber of Commerce and other members of the Alliance.

Other details of the bill emerging from the meeting:

• Greenhouse gas curbs across multiple sectors would aim at a 17% reduction by 2020 and 80% by mid-century. These are from a base of 2005 levels, not 1990, which Europeans and other Kyoto signers use as their base. (FYI -- U.S. emissions in 2008 were 13.6% higher than 1990.)
• The curbs would apply to plants emitting 25,000 or more tons of GHG a year.
• A “price collar” would limit a rise in the cost of carbon allowances.
• There would be new nationwide standards for energy efficiency and renewable energy.
• The bill would include titles, or sections, on oil refining, farms, consumer refunds, clean energy innovation, coal, natural gas, nuclear energy, and energy independence.

The trio also met with environmental groups to get their feedback.

It’s more than a little disturbing that the industries that worked with the Bush-Cheney Administration on the oil-friendly Energy Policy Act of 2005 got a special introduction to this proposal and chance to make comments and requests. (The oil companies asked that revenue from permits go to highway construction – gotta keep those automobiles running!) More likely it will flow back to consumers to pay higher energy costs and also to clean energy R&D.

The landscape is different today and industry realizes things are going to change one way or another. The EPA now has power to regulate carbon, and states are increasingly passing their own climate bills.

The three Senators expect to reveal an outline of their bill to a larger group of Senators next Tuesday, then send the information to the EPA and Congressional Budget Office for analysis. A final proposal will likely be introduced to the Senate in mid-April, Kerry said.

Meanwhile, Sens. Jeff Bingaman (D-N.M.) and Byron Dorgan (R-N.D.) have pitched Majority Leader Harry Reid (D-Nev.) on an energy-only bill that had bi-partisan support in the Senate Energy Committee last spring. The two might be blended together.

See earlier Earthling Angst posts on that bill and the ongoing effort by Kerry-Lieberman-Graham .

(Sources: E&E Daily, E&E News PM, Greenwire,

Tuesday, March 16, 2010

Shale gas: energy game changer or pollution risk?

(Photo of hydraulic shale gas drilling from Flickr and photographer Melissa Peffs)

Shale gas is plentiful in the United States, and apparently all over the world. So the recent hydraulic fracturing (or “fracking”) and horizontal drilling that’s made it accessible and cheap could change not only the balance of energy sources but also geopolitical relationships – because most countries have it and could drastically reduce imports.

On the other hand, the process involves blasting shale rock with water, sand and chemicals like benzene, which some say is getting into the water table and contaminating it.

Shale gas was the talk of the CERAWeek forum in Houston last week. Now that it can be extracted from shale, natural gas reserves in the U.S. are sufficient to supply all our power for 100 years. It was called a “game changer” and an IHS CERA rep predicted the use of gas for power could nearly double by 2035. Three large reserves here are Marcellus in Pa., Barnett in Texas and Haynesville in La.

Companies that didn’t get in on the shale gas action here are rapidly looking for opportunities in Europe.
• Exxon Mobile is exploring in Germany and Poland.
• Chevron, Marathon and ConocoPhillips are also looking at Poland.
• Royal Dutch drilled its first well in Sweden and is looking in Ukraine.
• Paris-based Total is exploring in France and Denmark.
And there are others.

Natural gas emits about half the CO2 of coal, so many see it as a good bridge to renewable energy.

But there are concerns, serious ones.

There have been complaints of groundwater pollution. Investigations by the Ground Water Protection Council, an association of state regulators, has so far been unable to tie groundwater contamination directly to fracturing. But broken pipes and improper disposal of wastewater have caused problems, which suggests the need for closer monitoring.

GWPC has contracted with the Department of Energy to come up with a risk assessment of hydraulic fracturing. They also asked Congress, other federal agencies and state regulators to work with them to identify risks. The EPA will also conduct a study.

Sources: Greenwire, E&E Daily, Reuters, NPR

Sunday, March 14, 2010

Senate climate bill likely to include off-shore drilling, delayed CO2 curbs for some industries

(Remnants of steel plant with Three Mile Island nuclear plant behind it from Flickr and photographer Scooter Flix/Scott Shatto)

What form will the bi-partisan Senate climate bill finally take? New developments in the past week suggest the following:
• Industry, particularly trade-sensitive industry in the Rust Belt, may get a long reprieve.
• Off-shore drilling is likely to be part of the mix, probably with revenue sharing for the adjacent states.
• Nuclear power and natural gas could be part of a “clean energy standard” that would replace the current renewable energy standard RES).

These are three of the “asks” from major blocs of Senators, some of whose votes will be needed to get to 60.

In an analysis of the 30 or so fence-sitters, E&E News, the subscription wire service, has looked at the various blocs and their demands. Some are overlapping. The idea will be to swing some of these blocs, or at least some members, onto the yes-vote side of the fence to reach 60. They are now at 41.

The coal bloc (about 20 Senators) wants the cap on emissions by 2020 to be less than the 17% in the House bill and what was promised by the President at Copenhagen. They also want billions to develop “clean coal” technology.

The nuclear bloc (about 18) is looking for tax incentives and loan guarantees that they are likely to get. They also would like nuclear to be included in a “clean energy standard.”

The industrial bloc (13) is worried about job loss for energy-intensive industries with fierce international competition, such as steel, cement and glass. They want short-term transitional assistance and trade barriers for countries that don’t have similar curbs on CO2 emissions. (No point sending the jobs and CO2 to China, they say.)

The gas and oil bloc (13) wants more offshore drilling with revenue sharing for states. On the other side are some states, mostly East Coast, that don’t want drilling off their coasts (NIMBY).

Finally there are about 12 sector-specific advocates who want their industry phased in later, with utilities going first, which is likely to happen.

Meetings last week
President Obama met with 8 Democrats and 6 Republicans to hear them out for more than an hour last week.

Meanwhile, the triumverate of Sens. John Kerry (D-Mass.), Joe Lieberman (I-Conn.) and Lindsey Graham (R-S.C.), who are drafting the bill, met with the Big 3 opponents of climate legislation – the U.S. Chamber of Commerce, the American Petroleum Institute and the American Farm Bureau.

What the three Senators will emerge with in the next couple of weeks (or maybe after spring break, Kerry admitted Friday) will be what Graham calls a jobs bill that emphasizes energy independence and reduces air pollution. He also said off-shore drilling is a must. Sen. Carl Levin (D-Mich.) has asked a 10-year delay for trade-sensitive industries and Graham noted, “We need Levin.”

A few, such as Sen. Richard Lugar (R-Ind.) want an energy-only bill, but the President was clear this should be a comprehensive climate bill. Sen. Lisa Murkowski’s (R-Alaska) demand for drilling in ANWR has been rejected out of hand.

The three said earlier this bill is unlikely to embrace cap-and-trade.

Stay tuned.

(Sources: E&E Daily, E&ENewsPM)

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Saturday, March 13, 2010

Florida Keys face climate change now as sea rises

(Photo of beach in Florida Keys from Flickr and photographer Vladeb/Brian Garrett)

The Florida Keys are already feeling the damage from rising seas and climate change. The low-lying island chain is being eroded, flooded and losing unique wildlife – and that’s not just from hurricanes. The seas have risen 9 inches in the past century.

I’ve seen the encroaching water close-up. We bought a condo on the ocean in Islamorada in the mid-1990s. And we sold it 10 years later, in large part because the water was lapping at our building, requiring a seawall to be built. Aside from several hurricanes in recent years that took out our dock, insurance costs had skyrocketed and we knew if our building ever was destroyed they’d have to rebuild further back and smaller, and some of us would be out of luck.

An article in the Christian Science Monitor last week talked about frequent flooding of streets, the death of foliage from salt water, and gradual disappearance of some animals needing fresh water – like the tiny Key deer. A study at the University of Miami said a best-case scenario would be the sea rising another 7 inches by 2100. Worst case was 55 inches.

That would just about wipe out everything. Most of the Keys are flat and little more than a block wide, with water on both sides.

Some efforts are underway to combat flooding streets – for example in Key West where they are putting in gravity wells at intersections. And there’s talk about raising some roads. But money is short and I can’t see that they’d ever be able to save this wonderful, beautiful spot if the water rose even 24 inches.

What’s happening in the Keys is starting to occur on other coastlines, where beach erosion is eating away at the shore.

Just a reminder that climate change legislation is about more than what the coal companies want and the politics of getting re-elected.

(Sources: Christian Science Monitor, ClimateWire)

Sunday, March 07, 2010

EPA backs down on rules for large power-plant GHG emissions -- under pressure from Congress

(Photo of Utah coal-fired power plant from Flickr and photographer Arbyreed )

Reactinging to pressure from some members of Congress, the EPA has backpedaled on its plan to begin regulating greenhouse gas emissions from large power plants and factories under the Clean Air Act this year.

EPA Administrator Lisa Jackson said that in order to allow time for Congress to pass a climate bill she would:
• Not require permitting in 2010 for large sources of greenhouse gases.
• Raise the limit for permitting next year to those emitting more than 75,000 tons, not the 25,000 planned. That amount might be lowered to 50,000 tons in 2012.
• Give small sources of emissions a reprieve until 2016.

The EPA and Department of Transportation would, however, proceed with plans to issue rules next month for autos and light trucks, to reach the Obama Administration’s goal of 35.5 mpg by 2016.

Why the change?
Easing the plans for restricting emissions from large coal-powered plants and other industrial sources came in response to a series of threats to the EPA’s ability to regulate GHG.

• Sen. Lisa Murkowski (R-AK) has prepared a resolution to veto the “endangerment” finding that greenhouse gases should be regulated under the Clean Air Act, a finding that followed a Supreme Court decision. Murkowski has 41 co-sponsors, including Dems Ben Nelson (Neb.), Blanche Lincoln (Ark.) and Mary Landrieu (La.) Murkowski needs 51 votes to pass the resolution and apparently doesn’t have them or would have introduced it by now. A companion resolution in the House, would be spearheaded by two Democrats, Ike Skelton (Mo.) and Collin Peterson (Minn.)

• Coal-state Sen. Jay Rockefeller (D-W.Va.) has introduced a bill to delay EPA regulation of large power plants for two years. There is no indication, however, that Senate leadership will bring it up for hearing. W. Va. Reps. Nick Rahall and Alan Molihan, both Dems, as well as Rick Boucher (D-Va.), have a similar bill in the House but there’s no sign that is going anywhere either. But Rockefeller’s bill may have done its job to get concessions from the EPA and head off Murkowski’s more dangerous resolution.

Rockefeller’s bill would not challenge the EPA’s right to consider climate change under the Clean Air Act, as Murkowski’s resolution would. It would just postpone it for stationary sources (not vehicles).

Who’s lining up with whom
Murkowski’s supporters include the National Automobile Dealers Assn. and the American Public Power Assn.

She, by the way, has collected $800,000 in gas, oil and utility contributions, according to

Among those opposing her resolution are the American Lung Assn. and 12 public health organizations, including the American Pediatrics Assn., as well as 569 scientists from the Union of Concerned Scientists.

The head of construction trades for the AFL-CIO has written the White House and asked it to reconsider taking such strong action quickly against stationary sources because it would hurt jobs.

Alabama and Texas have filed suit to stop the EPA. But 16 other states, mostly on the West Coast and in the Northeast, have asked to intervene on behalf of the EPA. Among them are some you might not expect – Arizona and Iowa.

EPA’s Jackson told Congress she, like the president, would like to see Congress pass climate legislation as a better way to curb greenhouse gases. The House climate bill passed in June blocked EPA regulation, while the Senate bill that came out of the Environment Committee did not.

Now 13 Senators, led by Robert Menendez (D-N.J.), and including Barbara Boxer (D-Calif.), Kirsten Gillibrand (D-N.Y.) and Al Franken (D-Minn.), have sent a letter to Majority Leader Harry Reid (D-Nev.), as well and the bi-partisan trio crafting a new Senate bill (Kerry, Lieberman and Graham), asking them not to take away the EPA’s ability to regulate GHG from coal plants under the Clean Air Act.

(Sources: Greenwire, E&E Daily, ClimateWire, E&ENewsPM,

Monday, March 01, 2010

Carbon tax more acceptable than cap-and-trade?

(Photo of coal-burning plant near Kenosha, Wisc., from Flickr and photographer James Jordan )

Who'da thunk it? Cap-and-trade was the way to go the past few years because a carbon tax was politically impossible. Now, suddenly, that's turned on its head. A carbon tax -- or at least "a price on carbon" -- seems to have the best chance.

Climate legislation may not be dead after all, but cap-and-trade is. The odd triad – Sens. John Kerry (D-Mass.), Joe Lieberman (I-Conn.) and Lindsey Graham (R-S.C.) – are preparing to release the main points of their “compromise” legislation to the Senate sometime this week or next -- and it doesn't include cap-and-trade.

They don’t have the 60 votes yet, haven’t even drafted the language yet, but are ready to work the crowd of uncertain senators and interested lobbyists to see if they can reach consensus.

President Obama says he’s willing to be flexible as long as the plan puts a price on greenhouse gas emissions and cuts them about 17% (below 2005 levels) by 2020, as he promised the rest of the world.

The three say their plan can do that.

Other important points:

• Three different mechanisms will be used for three different sectors.
• Power plants will go first and their emissions will be priced and capped and made more stringent over time.
• Industries, such as chemicals, cement and paper, will be able to wait several years, but will eventually be included.
• Motor fuel will have a price attached to carbon (that's right, a carbon tax) with at least some of the revenue going to transportation projects and helping auto companies becom more fuel-efficient.
• Nuclear power will be supported – Obama already took a step in that direction, announcing $8.3 billion in loan guarantees for two reactors in Georgia.
• R & D for carbon capture and sequestration will get support too.
• With emphasis on reducing dependence on foreign oil, plans for offshore drilling for oil and gas here are included.

Cap-and-trade a non-starter
The GOP has tagged cap-and-trade as “cap-and-tax” and has scared people into thinking energy costs will rise. The term is now political poison. Not to mention distrust of Wall Street and any trading mechanism.

What seems to be taking its place is “cap-and-dividend,” in which proceeds from a “price” on carbon (whatever form it takes) would go back to consumers to help them pay higher utility costs. The advantages are two:
• Voters won’t blame their Senators for sticking them with higher costs in a bum economy,
• Utilities will be able to raise prices to pay for the changes they have to make.

Can it pass?
It’s impossible to satisfy every politician, voter and interest group, but the triad is sure trying. Graham said even climate change skeptics can support this bill, which will provide jobs and reduce dependence on oil from unstable parts of the world. It's also a way for the GOP to appeal to young voters, he told Tom Friedman of the New York Times.

The three are running up against a serious time crunch in a Senate still preoccupied with health reform and jobs -- and an election that has incumbents very nervous. (Note that John McCain is very much absent from this effort by his two amigos.) And Graham suggested if the Dems pass health reform by reconciliation, all bets are off.

Once the bill's details are worked out, the EPA would need about a month to do its analysis, and other departments would have to weigh in. If it is in fact possible to get 60 votes, we still have a problem – similar to the one in health care.

The House has already passed a bill, HR 2454 (last June – did you forget about that?) and it is based on cap-and-trade. So, will the two chambers be able to reconcile their differences before election season heats up?

It seems like a tall order.

(Sources: Reuters, E&E Daily, PlanetArk , New York Times)