From E&E TV

E&E’s Samuelsohn discusses developments in Senate climate negotiations

Will the Senate take up immigration reform before climate and energy legislation? During today’s OnPoint, E&E reporter Darren Samuelsohn discusses the latest developments in the Senate climate debate. He explains how Senate Majority Leader Harry Reid (D-Nev.) plans to proceed with climate negotiations and talks about alternatives to the Kerry-Graham-Lieberman bill.

Watch the full video here.

By Ken Silverstein, Editor-in-Chief of EnergyBiz Insider

As President Obama rounds the corner and heads into the second year of his administration, he is discovering what nearly all of his predecessors have — that voters become disenchanted during the midterm and tend to elect more of the opposition.

With that comes the challenge of how to enact what he and his supporters have determined to be the country’s greatest priorities. To that end, Obama has not forsaken the issues to which he got elected. Instead, he has chosen to extend a hand to Republicans and Independents and offer them a chance to influence the course of history.

In his State of the Union Speech, the president continues to endorse the creation of a clean energy economy built on carbon constraints and the expansion of a modern infrastructure that involves new generation and the intelligent utility. But he is also becoming increasingly vocal in his support for new nuclear power plants as well as the development of clean coal technologies and more offshore oil and gas drilling.

“I know there have been questions about whether we can afford such changes in a tough economy; and I know that there are those who disagree with the overwhelming scientific evidence on climate change,” the president intoned. “But even if you doubt the evidence, providing incentives for energy efficiency and clean energy are the right thing to do for our future — because the nation that leads the clean energy economy will be the nation that leads the global economy. And America must be that nation.”

While the president’s more accommodating tone is the result of the loss of his super-majority in the upper chamber that allowed him to avoid filibusters, it is also an extension of what he had said on the campaign trial. Recognizing that the president was first elected as a U.S. senator from Illinois, Obama had been inherently in tune with the coal and nuclear industries there. His earlier trepidation, however, was that his friends on the left were generally not in synch with these causes.

While running for office he became a latent supporter of more oil and gas drilling rights in the Gulf of Mexico — a change-of-heart that occurred at the time of ever-soaring prices and added pressures to find new, domestic energy resources.

By putting nuclear, advanced coal and extra drilling rights atop the agenda, the president has now made his energy bill more appealing to fence-sitting Democrats and moderate Republicans. But with each action comes an equal and opposite one. And now he must worry whether the liberal wing of his party will stay with him.

“We continue to believe that passing cap and trade legislation this year will be a very steep uphill battle; however we’ll be watching closely as alternative ‘hybrid’ approaches for pricing carbon are discussed,” says Whitney Stanco, energy policy analyst for Concept Capital’s Washington Research Group.

Practical Path

Beyond the political realities, the president also faces the practical ones. Today’s energy mix is no secret: The preponderance comes from coal, nuclear and natural gas. The renewables sector, hydro power included, accounts for around 8 percent. Diversification is a must, given that energy producers will be spread thin as developing nations demand ever-increasing fuels to run their economies.

What then? The president’s supporters are heartened by his firm stance to usher in the New Energy Economy whereby more of the nation’s resources are going to research and to build more wind and solar plants. But this movement has gotten ensnared not just in Washington politics but also in mainstream economics. And while the president says that climate change is a national priority, the odds of passing a bill this year are now reduced.

That would give the advantage to natural gas, at least as a bridge until the country can cost-effectively produce and use more sustainable fuels. It’s particularly true given that the older coal plants are nearing retirement and as the demand for energy will eventually resume. This, then, would require easing the drilling restrictions in areas now forbidden.

“Obama’s corporate colors have been showing for some time but now they are on full display,” says Linda Gunter, with Beyond Nuclear a national environmental advocacy group. “How he can see oil, coal and nuclear as compatible with climate change is breathtaking.”

The president’s task of holding together a coalition that can pass a comprehensive energy bill is noticeably difficult. More than likely, he will have to pare down his aspirations and focus on those elements that have broad backing.

As such, the funding and tax breaks provided to green energy will continue. But more concessions will be made to the fossil fuel industries, giving increasing leeway to coal producers that invest in best-available technologies and to gas shale developers who have access to rich deposits around the country.

While recession has chipped away at energy demand, it is still expected to rise at 1.5 percent a year. The ultimate objective is to meet that challenge with the cleanest possible fuel sources. Getting there is a national goal but it will require compromise.

“We can and we must forge a practical path that will address the country’s immediate economic needs while laying the foundation for a clean, cost-effective, low-carbon energy future,” says Eileen Claussen, president of the Pew Center on Global Climate Change.

That process presents opportunity: to jumpstart the American economy by advancing modern energy technologies. That’s the foundation of the president’s message and one that has not waned during this midterm transition.

Supporters of the climate bill passed by the House and the similar bill under consideration in the Senate — including President Obama and Democratic congressional leaders — say that the cap-and-trade approach would guarantee greenhouse-gas reductions. But this claim ignores the flaws inherent in both bills that would undermine even their weak emissions-reduction targets and would lock in climate degradation.

We are speaking out as parents, citizens and attorneys, but our analysis is informed by more than 20 years each at the Environmental Protection Agency’s San Francisco Regional Office, including Allan’s extensive experience overseeing California’s cap-and-trade and offsets programs for the EPA.

Cap-and-trade means a declining “cap” on total emissions, while allowing trading of pollution permits. Confidence in the certainty of declining caps is based on the mistaken assumption that cap-and trade was proven in the EPA’s acid rain program. In fact, addressing acid rain required relatively minor modifications to coal-fired power plants. Reductions were accomplished primarily by a fuel switch to readily available, affordable, low-sulfur coal, along with some additional scrubbing. In contrast, the issues presented by climate change cannot be solved by tweaks to facilities; it requires an energy revolution through investments in building clean-energy facilities.

The biggest obstacle to this revolution is that uncontrolled fossil fuel energy remains much cheaper than clean energy. Cap-and-trade alone will not create confidence that clean energy will become profitable within a known time frame and so will not ignite the huge shift in investment needed to begin the clean-energy revolution. In recent interviews, even the economists who thought up cap-and-trade have said they don’t believe it’s an appropriate tool for climate change.

What guarantees failure of the proposed climate bills, however, are their provisions for carbon offsets, a concept not used in the acid rain program. Both bills allow all required greenhouse-gas reductions for almost 20 years to be met with carbon offsets rather than actual reductions in use of the capped sources. Offsets — considered indispensable to keeping cap-and-trade affordable — are supposed to be “additional” reductions beyond what is legally required. But experience with offsets in Europe and California has shown that ensuring real “additionality” is not an achievable goal.

Suppose, for example, that a landowner is paid not to cut his forest so that it can continue capturing carbon dioxide from the atmosphere. Purchasing this offset allows owners of a coal-fired power plant to burn extra coal, above the cap.

But if the landowner wasn’t planning to cut his forest, he just received a bonus for doing what he would have done anyway. Even if he was planning to cut his forest and doesn’t, demand for wood isn’t reduced. A different forest will be cut. Either way, there is no net reduction in production of greenhouse gases. The result of this carbon “offset” is not a decrease but an increase — coal burning above the cap at the power plant.

Or consider the refrigerant HCFC-22, the manufacture of which creates an extremely powerful greenhouse gas as a byproduct. This byproduct is relatively easy and cheap to destroy, and governments could require refrigerant manufacturers to do just that. But offset investors have persuaded regulators to approve destruction of the byproduct as a carbon offset, making it twice as profitable to sell byproduct destruction as it was to sell the refrigerant.

Some have even fought to keep release of this byproduct legal because, otherwise, destruction of the byproduct would no longer produce offsets as it would no longer be “additional.” The situation also creates incentive for some to make unneeded refrigerant to profit from byproduct offsets.

Carbon offsets create the illusion of “additional” greenhouse-gas reductions, but we are just getting business as usual. Untrackable shifting of economic activity and perverse incentives such as these are inherent problems for carbon offsets and cannot be solved by certification or verification processes. Since the most flawed offsets will be the cheapest, they will also be the most popular.

The House and Senate climate bills are not a first step in the right direction. They would give away valuable rights in cap-and-trade permits and create a trillion-dollar carbon-offsets market that will not lead to needed reductions. Together, the illusion of greenhouse-gas reductions and the creation of powerful lobbies seeking to protect newly created profits in permits and offsets would lock in climate degradation for a decade or more. The near-term opportunity to create an effective international framework would also be lost.

Laurie Williams and Allan Zabel are lawyers with the Environmental Protection Agency. The views expressed here are their own and not those of the EPA. Their discussion paper and video on climate change solutions are online at www.carbonfees.org/home/.

Republished from Government Executive.

From the Emporia Gazette

If the Senate follows through, the U.S. energy revolution will be underway.

On June 26, the U.S. House of Representatives passed HR 2454, the American Clean Energy and Security Act, with last-minute amendments that benefit the agriculture industry.

The bill, which narrowly passed with a vote of 217-205 and now goes to the Senate, is the framework for a new federal energy policy designed to ignite the renewable energy industry, reduce greenhouse gas emissions and decrease our dependence on foreign oil.

The bill creates a Renewable Energy Standard for utility companies that calls for 20 percent of their energy to be produced by wind, solar or other renewables by 2020. It raises the bar for energy efficiency in buildings and fuels and provides incentives to drive a surge of investment in clean energy technologies, including fuel-efficient cars. The goal is to put America in the driver’s seat of the clean energy boom.

“The nation that leads the world in creating new energy sources,” said President Barack Obama, “will be the nation that leads the 21st-century global economy.”

Leading the world in a competitive new industry is a tall order, and Kansans, like everyone else, are split on whether or not HR 2454 is the way to go. When it comes to agriculture’s role in the new policy, the Kansas agriculture secretary believes it could be a good deal. Three out of our four U.S. representatives disagree. The plus side for the ag sector is the cap and trade system; the downside is higher fuel and other energy costs. Kansas Ag Secretary Adrian Polansky predicts that the cap and trade factor will outweigh the higher fossil fuel costs for a net positive benefit for farmers.

If you’re a bit rusty on your grasp of market-driven emissions trading economics as I was when I began researching this bill, you may be asking — what the heck is cap and trade? Here’s how it works in the clean energy bill.

To reduce carbon dioxide in the atmosphere, the bill calls for CO2 emissions to be capped at 42 percent below 2005 levels by 2030. Through a cap and trade system, the upper limit of allowable emissions gets tighter ever year and companies can buy or sell “carbon credits” according to where they stand with the cap.

If an electric company goes over the legal limit of emissions, for example, it can buy carbon credits to make up for it; conversely, if another company stays below the emissions limit it can sell its credits to others. The point is to make CO2 emissions expensive so that companies will have a strong incentive to integrate clean energy systems.

Among many controversial points that came up when the bill was being drafted was the lack of a similar carbon credit system for the agriculture industry. In the final hours, however, House Agriculture Committee Chairman Collin Peterson (D-Minn.) introduced an amendment that lets farmers be rewarded with carbon “offsets” for implementing practices that sequester carbon dioxide from the atmosphere into the soil. The amendment also puts the ag offset program under the control of the Department of Agriculture rather than the Environmental Protection Agency, which also benefits agriculture.

Kansas Republican Reps. Jerry Moran, Lynn Jenkins and Todd Tiahrt voted against the bill and Democrat Dennis Moore voted for it. Their contrasting views echo the wide-ranging analyses of how the bill will affect the economy, including the ag sector.

The bill’s detractors believe that the new rules for clean-produced energy will drive up utility prices because energy companies will pass along the expense of updating their plants to consumers. They also predict that jobs will be lost as traditional fossil-fuel energy companies are replaced by renewable energy firms. Moran calls it a “jobs elimination bill” and “energy tax” that is “very harmful to our rural communities” because it raises fuel and other costs for farmers.

On the other hand, Moore states that the new policy will “create new industries and jobs that can’t be shipped overseas” and “revitalize the economy.”

So what is HR 2454 — a job killer and energy “tax” or job creator and energy cost saver? It depends on which analysis you read.

The Kansas camp’s opposing views reflect the conflicting reports about the net cost of the legislation. The conservative Heritage Foundation reported that the bill will cost a family of four about $2,979 between 2012 and 2035. According to the nonpartisan Congressional Budget Office, the cost to consumers will be about $175 per household by 2020, and low-income consumers would receive a net benefit of about $40 in 2020. The nonpartisan American Council for an Energy Efficient Economy projects that the bill will save households about $4,400 per year by 2030.

Analyses of the job loss-creation issue are just as split. The Heritage Foundation study estimates that the net job change between 2012 and 2030 will result in 1.14 million jobs lost. A study from the Political Economy Research Institute and the Center for American Progress, however, projects a net increase of 1.7 jobs across the country.

Getting down to the facts about Kansas, the Renewable Energy Policy Project study reports that legislation like HR 2054 will create 11,491 new jobs in Kansas in the wind, solar, geothermal and biomass energy industries that already exist in the state. Those gaping discrepancies are just one element of a very complex piece of legislation. But with so much at stake for Kansas farmers, I called Polansky to get his take on the bill.

“It’s going to depend a great deal on the details of the agriculture offset program that Chairman Peterson was able to insert into the legislation,” he said. “I think if that’s done appropriately, it could have a very positive impact on agriculture and mitigate to a large extent, or even more than mitigate, potential cost increases in terms of energy inputs for agriculture. I certainly think that’s possible.”

Polansky, who will soon leave his state post to become the director of the USDA’s Farm Service Agency in Kansas, emphasized that Kansas agriculture could benefit significantly from a market-based program like cap and trade if the soil sequestration offset program is based on good science.

“I believe if that is done correctly, agriculture should be in a very good position,” he said. “We have significant science-based data here in Kansas and are developing more, which I think should bode well for Kansas agriculture.”

If there is a carbon currency in the future and Polansky is right, Kansas farmers will be able to cash in on cap and trade and become key players in the energy revolution.

from Yahoo! News

WASHINGTON – Congress has taken its first step toward an energy revolution, with the prospect of profound change for every household, business, industry and farm in the decades ahead.

It was late Friday when the House passed legislation that would, for the first time, require limits on pollution blamed for global warming — mainly carbon dioxide from burning fossil fuels. Now the Senate has the chance to change the way Americans produce and use energy.

What would the country look like a decade from now if the House-passed bill — or, more likely, a water-down version — were to become the law of the land?

“It will open the door to a clean energy economy and a better future for America,” President Barack Obama said Saturday.

But what does that mean to the average person?

Energy touches every corner of the economy and in countless ways can alter people’s lives.

Such a law would impact how much people pay to heat, cool and light their homes (it would cost more); what automobiles they buy and drive (smaller, fuel efficient and hybrid electric); and where they will work (more “green” jobs, meaning more environmentally friendly ones).

Critics of the House bill brand it a “jobs killer.” Yet it would seem more likely to shift jobs. Old, energy-intensive industries and businesses might scale back or disappear. Those green jobs would emerge, propelled by the push for nonpolluting energy sources.

That could mean making or installing solar panels, repairing wind turbines, producing energy-efficient light bulbs, working for an environmental engineering firm or waste recycler, making equipment that harnesses carbon from coal burning and churning out energy-saving washing machines or air conditioners.

Assembly line workers at factories that made gas-guzzling cars might see their future in producing the next generation of batteries or wind turbine blades — an emerging shift, though on a relatively small scale today. On Wall Street, commodity brokers would trade carbon pollution credits alongside oil futures.

Farmers would see the cost of fertilizer and electricity go up. More windmills would dot their pastures. And a new source of income could come from selling pollution credits by planting trees or changing farming methods to absorb more carbon dioxide.

Energy would cost more because it would become more expensive to produce. For the first time there would be a price on the greenhouse gas pollution created when coal, natural gas or oil are burned. Energy companies would have to pay for technologies that can capture the carbon emissions, purchase pollution allowances or shift to cleaner energy sources.

It all costs.

Investors would see a new line item on companies financial reports: the cost of carbon permits.

Some increases would be reflected in the prices of goods and services, economics say. It might mean shelling out more for a toy because plastic, a petroleum based product, is more expensive, or paying more for a house because of new efficiency requirements.

Not all the higher energy cost would show up in people’s utility bills. Households, as well as business and factories — including those, for example, making plastic for toys — could use less energy, or at least use it more efficiently. The poorest of homes could get a government check as a rebate for high energy costs. That money would come from selling pollution allowances for industry.

Energy experts in government and industry say a price on carbon pollution would lead to new ways to make renewable energy less expensive, while emphasizing how people can use it more wisely.

Potential changes to how homes are built and even financed seem likely as energy efficiency is taken into account in building codes and the cost of mortgages. With the cost of energy increasing, homeowners and businesses would have greater incentive to use more energy efficient lighting, windows and insulation.

But don’t think that the traditional sources of energy would disappear.

Coal, which today accounts for half the electricity produced, would continue as a major energy source, though a less polluting one, energy experts forecast. That would mean capturing the carbon released when coal is burned.

It’s a technological hurdle with a complication: “not in my back yard” complaints over what to do with the billions of tons of carbon dioxide captured from power plants and pumped beneath the earth. Would people feel comfortable having it stored near or under their homes, factories and businesses?

Scientists studying climate change say carbon capture from power plants is essential if the country is to take up the challenge against global warming.

The cleaner energy economy also put nuclear energy front and center. Does the U.S. build new power plants? If so, where, and where does all the waste go? Nuclear energy makes up about one-fifth of the nation’s electricity today.

The House-passed bill contains provisions to make it easier to get loan guarantees and expands the nuclear industry’s access to loans for reactor construction. An Environmental Protection Agency analysis that shows modest future costs from a low-climate energy world assumes a significant expansion of nuclear energy. The Senate could add more incentives for the nuclear industry.

The new energy world would rely more on natural gas. This abundant fossil fuel emits carbon but is relatively clean when compared with coal. But people would have to decide whether to accept new pipelines that are needed to ship the gas around the country — just as they would have to deal with the need for new power lines to move solar and wind energy to where it’s needed.

On roll call, the vote was: Yeas 37, Nays 2, Present and Passing 0, Absent or Not Voting 1.

Yeas: Abrams, Apple, Barnett, Brownlee, Bruce, Brungardt, Colyer, Donovan, Emler,
Faust-Goudeau, Hensley, Holland, Huelskamp, Kelly, Kelsey, Kultala, Lee, Lynn, Marshall,
Masterson, McGinn, Morris, Ostmeyer, Owens, Petersen, Pilcher-Cook, Pyle, Reitz,
Schmidt D, Schmidt V, Schodorf, Steineger, Taddiken, Teichman, Umbarger, Vratil, Wagle.

Nays: Francisco, Wysong.

Absent or Not Voting: Haley.

House Vote:

The House concurred: Yeas 103; Nays 18
Roll call vote for the House is not yet listed.

by Rhonda Holman for the editorial board of the Wichita Eagle

Surprising no one, Gov. Kathleen Sebelius vetoed the latest legislative attempt to approve two large coal-fired power plants near Holcomb in Finney County.

The Legislature should take a good look at all the economic, political and regulatory changes affecting new coal plants, then take Sebelius’ fourth “no” for an answer.

Instead, GOP legislative leaders can be expected to spend coming days twisting House members’ arms, looking for 10 more votes to override the veto at last. Maybe they’ll find them.

If so, would Sunflower Electric Power Corp. even be able to build the plants?

We’ve asked that question for many months, as we’ve watched proposed coal-fired plants in other states falter because of an inability to find financing in this recession and the likelihood that a Democratic-controlled Congress and new climate-conscious president will approve regulation and taxation of carbon emissions.

The question became more relevant with news that one of Sunflower’s partners, Denver-based Tri-State Generation and Transmission, is examining other options for how to best meet its needs for power. Citing not only the Holcomb holdup but also the recession and threat of federal carbon regulation, Tri-State is pursuing solar, natural gas and energy efficiency.

The long-standing arguments against the coal bill remain strong, too, including that the 1,400-megawatt plants would generate only 200 megawatts of power for Kansas annually and perhaps 140 more jobs after construction ends, while sticking the state with all 11 million tons of carbon dioxide.

The bill also steps on other branches of government, usurping the regulatory authority of Health and Environment Secretary Rod Bremby and pre-empting both the appeals process for his 2007 denial of an air permit for the plant and Sunflower’s legal challenge of it. Plus, the bill disregards an attorney general’s opinion shoring up Bremby’s power to deny the permit.

Meanwhile, this continuing fight is denying the state the value of the renewable energy measures in the bill, including modest net-metering provisions.

Coal plants will continue to be a major generator of Kansas’ power for the foreseeable future. But legislative leaders should stop trying to push through two new plants that would be far larger than necessary to meet Kansans’ needs. This annual spring dance is getting old — and getting Kansas nowhere in pursuit of a cleaner energy future.

Why does GPACE support a veto of Senate Sub. for Sub. for HB 2014 – aka the “coal plant bill” (other than the ridiculously long name – which indicates its questionable legislative pedigree)?

• The current bill (SB/HB 2014) is not “comprehensive energy policy”:
  • Provides no long-term energy plan for the state.
  • Increases our dependence upon one imported fuel (coal).
  • Renewable Portfolio Standard weaker than the current voluntary RPS.
  • “Net-metering” that is not, in fact, net-metering – utilities recover the cost of your investment in energy production.
  • Includes no statewide energy efficiency measures.
  • Keeps Kansas from competing for billions of dollars in federal block grants.
  • In 2008 Sunflower Electric and legislative leaders completely ignored a one-plant compromise offered by the administration.
  • In 2009, the governor’s office proposed an energy plan including real net metering, an effective RPS, energy efficiency measures, and economic incentives for wind energy manufacturing – legislative leaders ignored it.
  • Critical comprehensive and renewable energy planning held hostage to polluting coal plants that we don’t need and don’t want.

• 2014 does nothing to establish “regulatory certainty” or “the rule of law”:
  • Nothing in the bill has any impact upon national uncertainty regarding carbon.
  • No verifiable instance of a company abandoning Kansas due to denial of Sunflower’s air quality permits – the bill is a fix in search of a problem.
  • Undermines the ability of KDHE to protect the quality of the air and water shared by ALL Kansans.
  • Dismantles constitutional separation of powers central to state and federal law.
• 2014 misses the mark for economic development and financial responsibility:
  • No direct incentives for manufacturers of renewable energy components in Kansas.
  • Invests more in imported coal, while ignoring Kansas energy resources like wind, solar, biomass, and natural gas.
  • Exposes rate payers to significant and unnecessary risk of increased energy bills related to uncertain (but increasing) coal costs.
  • $5 billion in health and environmental costs to Kansas from burning the coal required for the plants.
  • Surrenders jobs, investment, and revenue from the renewable energy economy to states all around us.
  • Much better for us to build a pipeline to Colorado if we are simply going to give them our water.
  • Great economic development and energy planning for Colorado and Texas (who get the electricity), and Wyoming (who provides the coal) – but this is Kansas.

Download a more detailed PDF of this document here.

Last Friday, the Kansas House of Representatives voted to pass HB 2014 (coal plant bill) out of the House and on to the Senate. The question was never whether it would pass, but with how many votes. Similar bills passed last legislative session three times. All three bills were vetoed by the Governor and this year she has promised to do the same (as has Lt. Governor Parkinson should he become governor). House leadership wanted to pass the bill with an override majority of at least 84 votes. They failed to do so, and the bill passed with only 79 votes (one absent member is expected to vote in support of the override this session – bringing the total vote count to 80).

This means those Representatives that voted in opposition to weak, deceptive energy bills that change state law in order to force the construction of coal plants in Kansas deserve to hear from us and to know that we are proud of their support for a clean energy future.  Please thank them and let them know we are counting on their continued support.

Below are those legislators that voted “No” on HB 2014 (the coal bill).

Ballard, Benlon, T. Brown, Burroughs, Carlin, Crow, Davis, Dillmore, Finney, Flaharty, Frownfelter, Furtado, Garcia, S. Gatewood, Goyle, Hawk, Henderson, Huntington, Kuether, Lane, Loganbill, Long, Mah, McCray-Miller, Menghini, Neighbor, Peterson, Pottorff, Quigley, Rardin, Ruiz, Sawyer, Slattery, Sloan, Spalding, Svaty, Swenson, Talia, Tietze, Trimmer, Ward, Winn, K. Wolf, Worley.

You can find your legislator here: http://www.ipsr.ku.edu/ksdata/vote/

Please, contact your Representative and let them know you appreciate their work in support of responsible energy policy in Kansas.  Encourage them to stay strong in opposition to the political games legislative leadership is playing with our energy future!  We deserve a clean vote on clean energy!

Thanks everyone.

James
Statewide Coordinator