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)

See Earthling Angst's daily tweets on Twitter by clicking on the blue bird at right.

Is natural gas the right solution to getting off oil? See EarthlingAngst's answer to Pickens' plan

(Photo of metro bus in Washington, D.C., running on natural gas from Flickr and photographer Kathy Doucette)

Weekly Angst: You’ve no doubt heard a lot about natural gas lately. There’s a rush to drill in shale and T. Boone Pickens’ much publicized plan recommends wind energy to power 20% of electricity plants, freeing up the natural gas that runs them and using that gas to replace some gasoline. His goal is to cut oil imports by a third in 10 years (and to make some money in the process). Sounds good, but it's not the answer to global warming.

Natural gas does have several advantages, as Pickens points out:
* It’s plentiful
* It’s cheaper than gasoline
* It’s cleaner than oil or coal
* And it’s American.

Natural gas now powers 20% of the nation’s electricity. It’s also used for cooking, heating and the chemical industry. And some motor vehicles are beginning to use compressed natural gas (CNG) as a fuel.

It’s plentiful
Natural gas production peaked here in 1973. Reserves began to dry up in the ‘90s, and production declined until 2005. By then new technology allowed horizontal drilling into shale, and there are plentiful shale gas reserves in 33 states. Some reports say there are enough in North America to last a century.

A rush to drill has ensued. Pennsylvania, for example, is on its way to issuing 7,000 gas and oil drilling permits this year. Louisiana just had a record natural gas lease sale of $93.8 million. More than 4,400 miles of gas pipeline have been laid in the U.S. this year and Alaska Gov. Sarah Palin just signed a bill to award TransCanada Corp. a license to build and operate a gas pipeline to run from the North Slope to a hub in Canada. Most of the reserves on the North Slope are leased by BP, Exxon and ConocoPhillips. So the oil companies are hedging their bets with gas.

Price encourages drilling but it’s cheap for autos
Another incentive to drill was the rising price. In 1999 natural gas was less than $2/thousand cubic feet. This summer it hit $13 before a sharp decline. Yet the end product, for automobiles, is much cheaper than gasoline derived from oil. In Utah, where compressed natural gas is plentiful and there is an infrastructure of filling stations, people with cars converted for CNG are paying less than $1 a gallon. To see prices and where CNG pumps are, go to cngprices.com.)

It emits less CO2
Natural gas emits 30% less carbon dioxide than gasoline, 23% less than diesel and 50% less than coal. It’s also more efficient than coal for power plants, as it loses less energy in the process.

It’s local
Nearly all (98%) of the natural gas used in the U.S. comes from North America. Very little needs to be imported, as long as supply here can keep up with demand.

The arguments against natural gas
Although natural gas is cleaner than oil and coal, it still emits 70% of the CO2 gasoline does and half what coal does. Pickens' plan, which shifts gas over to replace some oil but leaves most power plants running on coal is not going to get us to the needed reduction of greenhouse gases. And too much focus on natural gas will only delay progress in that direction.

Pickens touts natural gas as a “temporary” solution, a transition until everyone can drive electric cars in what he sees as 20-30 years. Well we're going to be driving plug-in cars way before that unless, of course, subsidies and infrastructure send auto companies in the direction of CNG instead of electric cars. And then we'll just be replacing oil with another -- though somewhat cleaner -- fossil fuel.

Some environmental leaders endorse Pickens' plan, in large part because it pushes a huge increase in wind power, from less than 2% to 20% in a decade. With "drill, baby, drill" ringing in our ears, that sounds like a pretty good program. Until you stop and think how close it will get us to our goal of stopping global warming. Not very. Not very at all.

EarthlingAngst’s plan
Pickens’ plan says nothing about solar energy, which is abundant in the West, or wave power or geothermal energy. Why not aim for 20% solar in 10 years as well? And instead of replacing natural gas, let wind, solar and geothermal replace the dirtier coal in producing electricity, and use cellulosic ethanol and electric cars or plug-in hybrids for transportation – and more mass transit. Also put a serious focus on efficiency. We waste as much energy as we use. Then perhaps we really could put a dent in both oil and coal in 10 years.

What a tragedy we have wasted so many crucial years arguing about this stuff. We need to take giant steps, not baby steps, to shift away from fossil fuels (not just foreign oil) to renewable energy sources, and we need an administration and Congress that realizes that.

Take action
Meanwhile, you can call your Senators and Congressman (212-224-3121) Tuesday during National Call-in Day and tell them to vote for renewable energy, green jobs and efficiency, not for more drilling. That’s the way to get more energy more quickly and help the economy and planet as well.
(Sources: ClimateWire, E&E Daily, E&E News PM, Greenwire, pickensplan.com, PlanetArk, American Gas Assn., New York Times)