Offshore drilling battle could lead to government shutdown Oct. 1

(Photo of Capitol Building from Flickr and photographer seansie/Sean Hayford O'Leary)

Washington Report: Republicans and Democrats may be headed for a showdown in Congress that could shut down government, halting paychecks and benefits and causing layoffs. Unable to reach agreement on an energy bill, Dems may add the yearly extension of the offshore drilling moratorium to a short-term government funding bill that will be needed at the end of September, which 3 dozen GOP senators have vowed to “fight vigorously.” Offshore drilling is an issue Republicans think could work for them politically if Dems continue to oppose it. Both parties’ leaders have agreed to an Energy Summit when Congress returns Sept. 8, but details have yet to be worked out. Democrats’ answer to high gas prices is release of oil from the Strategic Petroleum Reserve, a requirement that oil companies drill on the 68 million acres they have under lease before bidding on new leases, and curbs on energy futures speculation. They also want repeal of oil tax breaks, a renewable energy standard of 15% by 2020 and extension of renewable tax credits. The Republicans’ fossil-fuel-heavy plan calls for repealing the offshore drilling moratorium on the east and west coasts, drilling in ANWR, oil shale extraction in the Rockies, increased incentives for nuclear energy, extension of credits for wind, solar and hydrogen, new tax breaks for coal-to-liquid, tax breaks for electric cars and speeding up permits for oil refineries. “The Gang of 10,” a bipartisan group of senators, came up with a compromise bill just before the August break, which might have a chance of breaking gridlock, so long as one side doesn’t see a political advantage in stalling. But it’s going to be hard to get agreement when the parties are so far apart, and the petroleum industry opposes it. Main provisions include:
• Drilling in the eastern Gulf of Mexico
• Drilling offshore from 4 Southeast states – Virginia, Georgia, North and South Carolina – if the states agree
• Repeal of billions in oil company tax breaks
• Extension of tax credits on renewable energy sources like wind and solar
• New loan guarantees for coal-to-liquid
• Speeding of permits for nuclear plants
• Billions for R&D for advanced biofuels and batteries
To read more see the Grist blog. (Souces: Greenwire, San Francisco Chronicle)

Nuclear wins, renewables lose in DOE's R&D budget

(Photo of nuclear power plant on Lake Erie from Flickr and photographer mandj98/James Phelps)

News Update 2: Nuclear energy is the big winner in the Department of Energy’s fiscal 2009 budget for research and development, and renewable energy and efficiency are the losers. Funds for research, development and deployment in the nuclear sector are up 46%, while RD&D money for renewable energy and efficiency is down 50%, said a report released last week by the Kennedy School of Government at Harvard. Also cut, by 15%, was much-needed improvement to the electricity transmission and distribution system. The weatherization program was eliminated. The budget doesn’t reflect the technologies needed for a low-carbon energy supply, said the report, which urged a drastic increase in spending for new technologies, efficiency and energy storage. The budget “is a far cry from the Manhattan Project for clean energy technology some have proposed,” the report said. The breakdown in the new budget:
*Nuclear fusion 15%
*Nuclear fission 21%
*Fossil fuels 23%
*Renewable energy 17%
*Efficiency 16%
*Hydroelectric 5%
*Electricity transmission 3%
(Sources: E&E News PM, Kennedy School of Government Belfer Center Report)

Environmental organizations protest nuclear amendment to Senate global warming bill

(Photo of nuclear power plant in Byron, Ill., from Flickr and photographers iluvcocacola/Bill and Vicky Tracey.)

Washington Report 1: Ten environmental organizations have sent a letter to Sens. Joe Lieberman (I-Conn.) and John Warner (R-Va.) protesting their nuclear title amendment to the global warming bill (S. 3036), which would give a portion of carbon-credit auction revenue to support the making of nuclear reactor parts. The groups say the money isn’t needed because nuclear energy already gets loan guarantees, production tax credits and disaster insurance from the 2005 Energy Bill, and that it is likely to sit unused. Instead the funds should go to energy efficiency and renewables, say Clean Water Action, Environment America, the Environmental Working Group, Friends of the Earth, Greenpeace, the League of Women Voters, Nuclear Policy Institute/Beyond Nuclear, Physicians for Social Responsibility, Public Citizen and the Sierra Club. (Source” E&E News PM)

Global warming debate in Senate set for next week

(Photo of Capitol Building from Flickr and photographer Charles Pence.)

Weekly Angst: Prepare to turn on C-Span next week and watch the debate over the Senate global warming bill. It should be revealing.

Environment Committee Chair Barbara Boxer (D-Calif.) came up with a “substitute” bill (S. 3036) last week, which incorporates the one by Lieberman and Sen. John Warner (R-Va.), but tries to meet some objections to garner more support. It includes, for example, a $955 billion fund (from now through 2050) to pay down the federal deficit, to make the bill budget neutral (if not carbon neutral). The debate is expected to start in the early evening June 2, with a cloture vote that even staunch opponents are likely to go along with – they want a debate too. Lieberman and Warner have signed off on Boxer’s substitute and John Kerry (D-Mass.) and Olympia Snowe (R-Me.) are co-sponsors.

It should be a zoo. This topic elicits strong feelings because global warming is an enormous issue that threatens the planet but also has implications for industry, as it calls for a seismic shift from fossil fuels to carbon-free (or at least low-carbon) energy. The bill sets up a cap-and-trade system, which puts an ever-lowering cap on greenhouse gas emissions and auctions or gives away credits that businesses can trade depending on whether they meet their emissions targets. If they don't, they must buy credits from those who do.

All kinds of amendments planned, from one by Lieberman and Warner to include more nuclear power, to one by Republicans to return revenue from the auction of carbon credits to the taxpayers as tax cuts. Sen. Joe Biden (D-Del.) wants to tell the U.S. to engage in global climate negotiations for real, and a likely Republican amendment will ask for inclusion of offshore drilling for oil and gas. Dems have been alerted, too, about planned GOP amendments specifically designed to embarrass them and their likely presidential nominee, Barack Obama.

Environmental groups (2 dozen of them) released a statement late last week saying the bill still “needs to be strengthened to ensure it will meet the reductions science dictates” (at least 80% cut by 2050), which it does not. Boxer did not increase the target, which is 71% by 2050, but really only 66% because it does not include all greenhouse gas emissions. It's not clear to me if there’s been any change in the percent of credits auctioned off, which start as 26.5% in 2012, going up to 79% in 2031. Bur since there’s been no mention of it, I assume it hasn’t changed much. That percentage is deemed too low by most environmentalists, because it means more free credits to polluters and less money bolster renewable energy. Many want 100% auctioned.

Where the revenue will go
The Boxer version of the bill lists specific payoffs to different segments from the bill’s revenues, which will come from auction of credits:
• $911 billion for consumers for help with increased energy costs and energy efficiency projects. Most ($850B) would help with energy costs.
• $231B in assistance to steel, glass, aluminum, rubber and paper companies to make needed changes -- they're seen as the industries that will have the most trouble adjusting.
• $566B for states to deal with GHG cuts.
• $307B for electric utilities to revamp.
• $150B for renewable energy companies.
• $68B to the auto industry to retool for hybrids, plug-ins, electric and fuel-cell vehicles.
• $250B for adaptation to climate change, largely for coastal states.
• $288B for wildlife adaptation.
• $560B for a fund states can access if they switch over from their own emissions programs to the federal one.
(All these amounts are spread over 40 years)

Free credits for fossil fuels have shrunk in the new version but more credits will be given for capture and storage of carbon dioxide. But if I’m reading this right, there is WAY too little going to renewable energy like wind, solar and geothermal. We need to be virtually switched over to them from fossil fuels by 2050. So why so stingy? Could it be that the lobbyists for these fledgling industries don't have the money to spread around that oil, gas and other mature industries have? You betcha.

It looks like nuclear energy will be one of the winners in this new version. The bill now provides $92 million in incentives, on top of what the nuclear power industry already gets from the government. And a successful Lieberman-Warner amendment would bring them even more. Nuclear, which now provides 8% of U.S. power, is a huge bone of contention with many environmentalists who don’t like the radiation involved and say "no nukes, no way." Even those who think some nuclear plants might be necessary to wean us off fossil fuels -- if safety and disposal problems can be solved -- would far rather see money go to really clean sources like wind, solar, geothermal and wave action.

Even if this bill should pass the Senate, it's unlikely the House will act before the end of the year. And this president would not sign a bill that would satisfy anyone who sees a need for urgent change. So the debate is probably just the first salvo in a battle that may be more successful with the next Congress and next president. But it still should be interesting to watch it unfold.
(Sources: Greenwire, ClimateWire, E&E News PM)

Take action: Send an e-mail to your senators.

Will Lieberman-Warner global warming bill pass the Senate? Should it pass the Senate?

(Photo of Capitol Building from Flickr and photographer Eamonn O'Brien-Strain)

Weekly Angst: A “compromise” global warming bill (S. 2191) will head to the Senate floor for debate the first week in June. It has a fine line to tred between those who want to make it weaker and those who think it must be stronger.

Sponsors Joe Lieberman (I-Conn.) and John Warner (R-Va.) are working hard to get more converts, so it can pass the 60-vote test to avoid a filibuster. Environment Committee Chair Barbara Boxer (D-Calif.) is working with them, even though she proposed a stronger bill herself. But Boxer vows to pull the bill from the floor if it is weakened further.

Lieberman said last week he has 45 firm votes and 15 leaning heavily toward approval. That means he needs every single one of those votes, and he suggested there would need to be changes to win them. Sen. John McCain (R-Ariz.), Lieberman’s Republican buddy whom he’s supporting for president, is a “leaning” vote because he wants more money for nuclear energy in the bill.

Cap-and-trade system
Lieberman-Warner (America’s Climate Security Act) is a cap-and-trade bill. That means a cap will be placed on overall greenhouse gas emissions and will steadily be lowered each year. Companies that do not cut emissions that much must buy credits from those that exceed their goal.

The bill calls for:
*A 4% reduction of GHG emissions in 2012, steadily increasing to 70% (from 2005 levels) by 2050. (Boxer would like to see that amended to 80%)
*An auction for 26.5% of the credits in 2012, rising to 79.5% by 2031. The rest of the credits would be given away free. (Boxer wants more credits paid for.)
*Distribution of auction income for jobs, deploying advanced technology, helping low- and middle-income people with increased energy costs, and mitigating negative impacts of climate change abroad.

The bill covers electric utilities, transportation, most manufacturing and natural gas, the sources of 87% of GHG. That means the actual total reduction will be 66% by 2050.


Efforts to weaken the bill
Sen. James Inhofe (R-Okla.), who famously called global warming a “hoax,” says he will propose 40 amendments and lead a filibuster against the bill if he can. Inhofe has support from the U.S. Chamber of Commerce, National Association of Manufacturers and Alliance for Energy and Economic Growth.

The National Mining Association wants more money to research carbon capture and storage.

Some want the bill to pre-empt action by the states that want to do more. Boxer, from a state that is already doing more, said she will pull the bill before she lets that happen.

Others are asking for a “safety valve” if carbon prices get too high, or for more money for nuclear energy.

A coalition of energy companies and other businesses are on a 17-state blitz to undermine the bill, citing loss of jobs and higher energy prices.

Environmental groups
Friends of the Earth and Greenpeace oppose the bill as not going far enough. The National Wildlife Federation supports it. The Sierra Club, Natural Resources Defense Council, Environmental Defense and World Wildlife Fund appeared with Boxer at a news conference last week, but some of them are saying the bill must be strengthened.

The dilemma for many environmentalists (in and out of Congress) is whether it’s better for the Senate to pass something, even if it’s just a first step.

The bill, of course, has two more hurdles. Passage of a similar bill in the House, which Energy Chair John Dingell (D-Mich.) says needs more deliberation and likely won’t get through the House until the end of 2008. Then there’s a likely veto from George Bush, who never has bought into the cap-and-trade idea.

An optimistic Lieberman gives his bill a 50-50 chance of becoming law, but says a new president in 2009 will increase those chances to 90%.

So some are saying why not just wait, and get a stronger bill. Others say let’s take the first step.

Frankly, I’m torn. I'd like to see 80% by 2050 and 100% auctioned credits, but we’re so far overdue in taking action I hate to put it off another year. And doing so could affect international negotiations for a climate treaty. We have been the largest cause of global warming up to now, so most of the stuff up there is ours. Maybe passing a bill, even if it doesn’t do it all, is a show of good faith and something to build on.

What do you think?

(Sources: E&E Daily, Greenwire, Boston.com, E&E PM, and America’s Climate Security Act. )
For a one-page description of the act go to Lieberman’s Web site.

Pew poll: Voters want more renewable energy, mass transit, greater fuel economy in autos

(Photo of California wind farm from Flickr and photographer findfado

Voters of all stripes strongly favor government support for renewable energy, increased fuel economy in cars, and mass transit. But they split along party lines on nuclear energy and taxes on oil exploration. The survey, newly released by the Pew Center for People and the Press, found the following:
• 90% favor government efforts to boost vehicle efficiency
• 81% want increased funding for alternative energy
• 72% favor more funds for mass transit
• 57% want research funds for ethanol (down from 67% in ’06)
• 22% favor an increase is the gas tax

There was a split along party lines for increased use of nuclear energy:
• 59% Republicans
• 46% Independents
• 34% Democrats
And for tax breaks for oil exploration:
• 52% Republicans
• 39% Independents
• 39% Democrats

The study