Wind farm: The Judith Gap Wind Energy Center in Montana has 90 turbines that produce 7 percent of the energy for the state's electric customers.
(Melanie Stetson Freeman/The Christian Science Monitor)Photos (1 of 1)
House fast-tracks major changes on energy and climate
But how much will they cost Americans, particularly during a recession?
By Gail Russell Chaddock and Mark Clayton | Staff writers/ March 31, 2009 edition
Washington and Boston
Congressional Democrats have launched a bid to shift the United States into greener energy technologies, while protecting US consumers and jobs during a difficult transition.
The draft plan, released Tuesday by the House Energy and Commerce Committee, moves one of President Obama’s key campaign pledges onto a fast track on Capitol Hill. It also opens a debate over how America powers its economy – one that crosses party and regional lines – at a time of deep economic stress.
“This legislation will create millions of clean-energy jobs, put America on the path to energy independence, and cut global warming pollution,” said Rep. Henry Waxman (D) of California in a statement.
The bill’s main elements
The bill has three main elements: developing clean energy sources, dramatically boosting energy efficiency, and capping and reducing greenhouse-gas emissions. The bill also aims to protect US consumers and industry during the transition to a clean energy economy.
Development of wind energy, solar energy, geothermal energy, smart-grid efforts, and new transmission lines would be accelerated, and there would be a new standard for utilities to meet regarding use of renewable sources for generating electricity. Utilities in all states would be required to gradually increase the proportion of renewables to 25 percent by 2025. The measure would also set a low-carbon standard for transportation fuels and push to reduce coal emissions by developing technologies to capture and sequester carbon.
As expected, the bill unveiled Tuesday is getting mixed reviews. Critics, including many Republicans, charge that the plan will kill jobs and add thousands of dollars to the average family’s utility bill.
“Tuesday’s cap-and-trade bill marks a triumph of fear over good sense and science, and it couldn’t come at a worse time, because it proposes to save the planet by sacrificing the economy,” said Rep. Joe Barton of Texas, the top Republican on the energy panel.
Citing a recent University of Massachusetts study, he added that new jobs associated with boosting domestic oil and gas supplies, which would be hard hit by the proposed bill, pay twice as much as jobs associated with green investment. “It’s not hard to guess which line of work most people would choose, especially if they didn’t have the foresight to be born into money,” he said.
Energy-efficiency advocates, on the other hand, are generally enthused. The bill contains a number of reforms that strengthen the US Energy Department’s authority to set energy standards for energy guzzlers that currently don’t have any standards, such as hot tubs, says Andrew Delaski, executive director of the Appliance Standards Awareness Project, which is sponsored by several environmental groups.
“This is a pragmatic bill that tries to balance a historic opportunity to unleash clean energy to rebuild our economy and stop the climate crisis, with the diversity of views on the Energy & Commerce Committee,” says Emily Figdor, director of the Federal Global Warming Program at Environment America, a coalition of environmental groups.
The draft bill includes strong clean-energy standards that reflect the latest climate science, Ms. Figdor notes. “But on the flip side, we’re disappointed that the bill includes sky-high levels of carbon offsets, which provide less-certain reductions in emissions, and lavish subsidies, including for ratepayers, for still-unproven carbon capture and storage technology.”
Business backing
The bill draws heavily on recommendations by the US Climate Action Partnership (USCAP), a coalition of business groups favoring climate legislation. As a result, it may be more likely to attract moderate lawmakers.
The draft legislation is “a strong starting point for enacting legislation to reduce greenhouse-gas emissions,” according to a statement from USCAP, which includes Alcoa, ConocoPhilips, Duke Energy, and General Motors, among other corporations.
“A number of compromises and proposals were already hammered out,” says David Doniger, policy director of the Natural Resources Defense Council (NRDC). “It’s not a bill crafted just by environmentalists, but with all the interests in mind.”
The cost of the bill hasn’t been assessed yet by the Energy Information Administration or the Environmental Protection Agency.
The cost of cap-and-trade
“It would be reasonable to anticipate that, overall, the climate portion would cost, at most, 1 percent of GDP [gross domestic product],” says Robert Stavins, an environmental economist and director of Harvard’s environmental economics program. “That’s a big number, but I don’t see it pushing us into another recession.”
“Still,” he adds, “it will be difficult to deal with during an economic downturn.”
A big facet of the cap-and-trade portion of the legislation involves the allocation of pollution permits – one permit per ton. Many environmental groups have supported the idea of auctioning 100 percent of the permits.
But the bill, while it avoids specifying how the permits would be allocated, does set aside 15 percent of them to be allocated to energy-intensive industries such as steel, concrete, paper, and glass, which would be immediately hit by higher energy prices and foreign competition.
“Our view is that some measure of free allocation to companies that can’t pass along their cost – [that] are very energy-intensive and trade-exposed – is appropriate,” says Mr. Doniger of the NRDC.
Power companies are emerging as early critics of the plan.
Scott Segal, director of the Electric Reliability Coordinating Council, a trade group representing power companies, says, “There is an open question as to whether … the bill is based on sufficient energy and economic modeling.”
He cites the bill’s “silence” on how emissions permits will be allocated and notes that the recession will make “an across-the-board increase in energy prices all the more difficult.”
Business and environmental groups have been gearing up for an overhaul of US energy policy for years.
To succeed, the bill will need bipartisan support
But even with Mr. Obama in the White House and with Democrats holding majorities in the House and Senate, lawmakers will have to structure a bill that can cross regional and party lines, as well as win some business support, to get a bill to the president’s desk.
Early on, Democrats signaled a concern for those hardest hit in adjusting to the new law.
“It creates new green-collar jobs, creates a reliable market for private-sector investment, promotes energy efficiency with stronger fuel and renewable-energy standards,” said House majority leader Steny Hoyer in a statement Tuesday. “And it also helps businesses comply and be part of the transition to a clean energy future, which we think is absolutely critical.”
For the Alliance for American Manufacturing (AAM), that means adjusting rebates and border controls to makes sure that foreign competitors are also held accountable for their contributions to greenhouse emissions.
‘A global solution is an imperative’
“Greenhouse gases are a global problem, and a global solution is an imperative,” said AAM executive director Scott Paul in a statement. “The last thing Congress should want to do is offshore jobs and production to foreign manufacturers that have significantly larger carbon footprints, undermining the aim of climate change policy.”
Environmental groups, which generally support the broad plan, want to see how – exactly – a proposed cap-and-trade system would function.
“They haven’t worked out exact allocation schemes,” says Sarah Saylor, legislative representative for Earth Justice. “This has been the sticky piece of this legislation.”
The House Energy panel plans hearings on this draft proposal after a two-week recess that begins next week, with a goal of moving to a floor vote by the end of May.
The Senate Energy and Natural Resources Committee began a markup of energy legislation Tuesday and is aiming to pass a bill out of committee by Memorial Day. The Senate Environment and Public Works Committee is preparing stand-alone legislation on global warming.
Comments
2. Bryan W. | 03.31.09
How does one “have the foresight to be born into money?” I must have slept through the part where I choose when, where and to whom I was born.
But seriously, the transition is going to hurt. I don’t think its a good time now, but its got to be done sometime. Might as well lump the pain in with a recession and get it all over with. Eventually, either we’ll over-heat the planet with global warming (I don’t buy into that politically driven pseudo-science much) or we’ll deplete the resources themselves.
If anything, I’d like to see a big decrease in this country’s interests in oil; So we can stop worrying about the unstable countries sitting on top of the deposits and stop sending our troops off to die for it.
3. Charles Lehardy | 03.31.09
No serious energy proposal can neglect the need to expand nuclear power as a means of meeting our domestic power needs. Nuclear power is safe, cheap, many times more efficient than any other power generation method, and it doesn’t add CO2 to the atmosphere. Unfortunately, Democratic energy politics prefers covering the hills and valleys with tens of thousands of costly wind turbines, when a few nuclear plants could do the same job.
4. David L. Hagen | 03.31.09
We need a 95% reduction in oil imports BEFORE we consider a 5% increase in renewable electricity, especially during a recession.
Oil shortages due to coming Peak Oil will shut down our economy.
Higher CO2 will improve food productivity that is critically needed to keep up with global population growth.
5. David H | 03.31.09
Americans ignore the obvious tool of taxing oil heavily, despite overwhelming energy, environmental, foreign policy and military reasons to do so. Taxing heavily would bring the society’s costs of oil to be reflected in prices, and both businesses and consumers could adjust decisions accordingly. It is the only way to to get hundreds of millions of decision makers to be aligned.
6. John L. Doe | 03.31.09
Let’s call this what it is - a backdoor tax on consumers in the name of climate change. Not only is this program a revenue generating scheme, cap and trade is going to have a devastating effect on the affordability of electricity. Even environmental groups are uncertain on how C&T is going to work and when laws are passed with unproven and even undeveloped processes, that’s bad policy, heck, it defies logic. I’ve heard it all - “the market-based approach toward capping greenhouse gases will reduce their emissions by 14% below 2005 levels by 2050.” Yeah, but know this — only a small portion of the new revenues, expected to reach nearly $646 billion by 2019, will go toward energy investment and research. The lion’s share will be returned in the form of household tax cuts — meaning this legislation will take away money from consumers through much higher (at least 50% or more - probably more like 300%, by the time it’s all said and done) and pay it back later in the form of tax cuts. (more)
7. John L. Doe | 03.31.09
(cont’d)
The C&T auction system cedes control of the price of electricity to Wall Street financiers and multinational corporations and the irony — who can we largely point the finger of responsibility at for our current economic turmoil? This is pure insanity!
What are those states who heavily rely on fossil fuel-based electric generation supposed to do when wind and solar options are limited to non-existent and there’s no dialog on nuclear options?
I truly am ashamed at being an American, where they kick you when you’re down. I could get more empathy from the **** Angels!
8. Hilary Smith | 04.01.09
Too much power in too few hands; we need to break up the banks now. Rallies are being organized as we speak for April 11th at 2PM EST. Visit “A New Way Forward” at http://www.anewwayforward.org for information on protests being planned in your state.
9. hsr0601 | 04.01.09
China, India and the other overpopulated areas consume massive energy, amid the declining oil reserve,and so without a new effective alternative energy system, we can not expect renewed economy prosperity, and that is why ‘the global green new deal’ is required, I think.
Thank you !
10. tom | 04.01.09
Being a member of our rural electric cooperative instead of a for profit power company, our coop has moved to 15% renewable power at the request of the membership (mostly wind power) and set a future goal of 25% renewable. The cost increase? About 2% higher for our bill. We don’t see the problem. If we can do it, why can’t others? The critics of green power have little or no experience with actually using green power so we grant them little credence.
11. tom | 04.01.09
to michael, the wilderness bill recently signed was a redesignation of existing federal lands (e.g. US Forest Service, et. al.) to wilderness. Of the 170 parcels, less than 4% had exploitable energy resources.
12. Jerry | 04.01.09
I’m all for increased “clean” energy production. What I am vehemently against is 1000+ mile transmission lines criss-crossing the land. Visual polution run amuck. States MUST provide for generation within their own boundaries for use by their own citizens. States MUST NOT be allowed to force that generation to other locals simply because they don’t want the generators “in their neighborhood”.
An example: Because of restrictive power generation regulations in New Jersey, here in Virginia the power companies want to put in a new 750KV transmission line to route electricity generated in W. VA across VA and into Maryland for the eventual use by New Jersey residents. Neither VA nor Maryland will benefit by one watt. But they will have to suffer 100% of the effects of the transmission line. Not only that, we will have to pay increased bills to cover the cost of the construction and maintenance of the line PLUS a guaranteed 14% profit to the power co.
I say that if New Jersey needs more electricity, then New Jersey should build the requisite power generation / transmission facilities. I say that there are ample sources of power generation within easy location of most end-users that many of the proposed cross-country transmission lines are not necessary and should be eliminated. Wind power from the West for use in the East? Build the wind farms off the eastern coast. The requisite wind energy is more than abundant there. Kennedy / Cronkite NIMBY’s can just suck it up like they want us peons to do.
13. Pat | 04.01.09
Don’t you feel sorry for people in the vast eastern part of the country where they don’t have significant sun or wind? At the same time, they are sitting on lots of coal that they won’t be able to use! I know that nuyclear power isn’t a politically correct energy source, but, especially for the easterners, it seems to be a reasonable and logical energy source.
14. Elizabeth | 04.01.09
Uranium is not a good solution to energy because, besides radioactive waste disposal problems, the ore quality is falling making uranium mining increasingly expensive and foreign controlled.
Carbon dioxide increases do not benefit agriculture, because even though plant volume increases, plants need more than carbon (C) so nutrient imbalances occur which hurt the plant and the animal/people consumers in terms of nutrition make the plants more vulnerable to pests and change the seed to stem ratio. As carbon dioxide increases push planetary temperatures up many important crops will reach temperatures where their functions are interferrred with such as plant reproduction can be cut by high temperatures.
In Portland, 100% renewable power is very affordable.
The responsible consumer does not consume more than their share of energy and does not burden far of states with energy production when we can live within the means within our own local footprint.
15. Bob | 04.02.09
Green Energy = More Expensive Energy.
The total cost per KWH for a utility to produce and deliver a KWH of electricity to a consumer is much higher for solar and wind sources than from our largest domestic energy source - coal. We have enough coal reserves in the U.S. to be energy independent for over 100 years. If you force utilities to generate electricity using solar and wind then you will force the American middle class to pay for it. It’s as simple as that.
When your electric bill is averaging over $600 a month in the summer, you can blame congress and Obama for it.
16. dave | 04.05.09
i thought we were well beyond the basic accepted definition of the word cost, as applied to the higher cost of cleaner energy. we all should by now understand there are other forms of costs…
17. Horst seweron | 04.06.09
Wind,solar,bio-renewable istoo costly and ineficienti will be the greatest
financial boondoggle in recorded human history.Period.
my proposal;
a.)for the interim;develop fast breeder (neutron) reactors the advantages are well known,look it up.
b,)spend more$$$ on nuclear FUSION research.once is solved go to hydrogen
tech.for transportation etc. needs.
c.)In the interim,use COAL,sequestering CO2 in lime stone,etc.technology
exists,currently applied in a powerplant in germany.
d.)get real,stop dreaming green dreams!
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1. Michael | 03.31.09
You may want to check into this, but I believe Obama signed a bill the other day to protect land all across the U.S. I believe some of this desert land in California was were a major wind farms was in the process for approval and now can’t get approved because Obama signed a bill to protect the desert land. Something to investigate.