Tuesday, June 12, 2007

Comprehensive Energy Package Moves to Senate Floor - National Renewable Energy Standard Amendment Expected

Senator Bingaman will propose a 15% by 2020 national Renewable Energy Standard be amended to the comprehensive energy package being debated on the Senate floor today

A new comprehensive energy package is being debated on the Senate floor today. The legislation incorporates a number of previously introduced bills and work from four different Senate committees and is being presented as an amendment to HR 6, the CLEAN Energy Act of 2007 previously passed by the House in January during the 'First 100 Days' push.

The CLEAN Energy Act shifts roughly $14 billion in oil and gas industry subsidies to fund future legislation supporting clean energy investments, including energy efficiency and renewable energy.

Although the highest-profile and probably most hotly-debated component of the new legislation may be the proposed increase in the fuel economy of passenger cars and light trucks to 35 miles per gallon by 2020, the bill contains much more, including:

  • fuel economy standards for medium- and heavy-duty trucks;
  • a 36-billion gallon renewable fuel standard by 2022;
  • mandates on federal building and fleet efficiency;
  • support for carbon capture and sequestration; and
  • support for the development of energy storage systems and electric vehicles.

  • The bill also establishes the goal of reducing gasoline consumption by 20% by 2017 and 45% by 2030. [see update below]

    Green Car Congress has a good description of the various components of the energy package, which was originally introduced as S.1419 (debate on the floor today was on an amendment to HR 6 however).

    A number of amendments will likely be offered to expand or limit the scope of the energy package as it is debated over the next several days. As usual, various senators have different takes on each major component of the energy package. Senate Majority Leader Harry Reid (D-NV) says he hopes to have debate wrapped up in five days to allow the Senate to move on to defense appropriation spending bills.

    Renewable Energy Standard Amendments Expected

    Senator Jeff Bingaman (D-NM), chairman of the Senate Energy and Natural Resources Committee, is expected to propose an amendment today or tomorrow that would establish a nation-wide Renewable Energy Standard (RES) requiring utilities to obtain 15% of their electricity from homegrown, renewable energy sources by 2020. The standard would not preempt states that have set more aggressive state Renewable Portfolio Standards.

    Senator Pete Domenici (R-NM) has also circulated a competing 'clean energy standard' that would allow utilities to claim credit for nuclear power and some 'advanced' fossil generation technologies, including potentially coal-fired generation with carbon capture and storage.

    Senator Mary Landrieu (D-LA) is also circulating an amendment that would lower Bingaman's proposed standard to 10% by 2020.

    50 senators have already signed on to a letter of support for a "strong" national RES, although vigorous debate is expected on the competing RES proposals. Renewable energy and environmental advocates have rallied around Senator Bingaman's proposal and have opposed any amendments that would weaken the 15% by 2020 standard [I received half-a-dozen different 'action alerts' in my inbox today regarding the RES amendments]

    Update 2:50 pm PST, 6/13/07: The Senate is debating the competing federal energy standard proposals presented by Senators Bingaman and Domenici this afternoon. It looks like they will continue to debate both proposals, as well as an even stronger RES that Senator John Kerry (D-MA) is expected to offer later this evening, and will not vote until sometime tomorrow. (You can watch all of this live on CSPAN-2 by the way)

    Update 12:15 pm PST, 6/14/07:Domenici's 'clean energy standard' amendment was tabled (killed) this morning by a vote of 56-39. Unfortunately, Republicans are shamefully filibustering the Bingaman renewable energy standard amendment and supporters do not currently have the 60 votes needed to break the filibuster.

    Negotiations are ongoing today on Capitol Hill I'm sure, and if you want to see the Bingaman amendment pass, it is particularly important to hammer your Senators with calls today to support the amendment and break the filibuster. These Republican Senators in particular as swing votes, so if one of them ‘belongs to you’ give ‘em hell:

    Brownback (R-KS), Coleman (R-MN), Collins (R-ME), Grassley (R-IA), Gregg (R-NH), Hatch (R-UT), Lugar (R-IN), Smith (R-OR), Snowe (R-ME), Specter (R-PA), Sununu (R-NH), Thune (R-SD)

    You can find your senators’ contact info here.

    Competing Proposals on Fuel Economy Reforms

    There are also several competing fuel economy proposals and the auto industry has vigorously opposed the 35 mpg by 2020 proposal included in the current energy package and originally introduced by Senator Dianne Feinstein (D-CA) as S.357 (see image below).

    [Image: A projection of the effect of current fuel economy bills in Congress. President Bush’s State of the Union (SOTU) goals and California’s AB1493 are included as reference points. Individual car and truck targets for S.357 are projected from stated fleet goal. S.357 has now been incorporated into the comprehensive energy package, HR 6. Click to enlarge. (source: Green Car Congress)]

    Automakers have deemed the 35 mpg by 2020 proposal unworkable, and are leaning toward a more lenient proposal being developed in the House by Representatives Rick Boucher (D-VA) and John Dingell (D-MI) and in the Senate by Michigan’s two senators, Carl Levin (D-MI) and Debbie Stabenow (D-MI).

    Under the Boucher/Dingell and Levin/Stabenow plans, cars and trucks would maintain two different fuel economy standards. The standard for cars would increase to 36 mpg by 2022 while the standard for trucks would increase to 30 mpg by 2025. At the current roughly 50/50 split between annual passenger car and light duty truck sales, the Boucher/Dingell and Levin/Stabenow plans would equate to a roughly 33 mpg standard by 2025.

    The Boucher/Dingell bill also reportedly bars states from implementing greenhouse gas limits on vehicle emissions. This would preclude California and the growing number of other states adopting California tailpipe emissions regulations (see previous post) from acquiring the waiver from the EPA required to implement the greenhouse gas limits on new vehicles (see previous post). EPA recently concluded a public comment period on whether or not to grant California the waiver needed to implement their new tailpipe standards.

    Senator Reid had this to say in response to the auto industry's complaints about the 35 mpg proposal:
    I know that the auto industry is still wavering on this issue. I met with the CEOs of the big three automakers last week, and here is what I told them: The debate on raising CAFE standards should be over. It will happen.
    Despite the competing proposals and opposition from the auto industry, the 35 mpg by 2020 proposal survived the first day of debate today, to the praise of Senator Domenici and others.

    Gasoline Reduction Targets vs. Oil Reduction Targets

    The Senate debated today over whether or not to set reduction goals for gasoline consumption alone, or for oil consumption in general. Senators Norm Coleman (R-MN), Joe Lieberman (I-CT) and Evan Bayh (D-ID) proposed an amendment that would change the focus of the consumption reduction targets to oil reductions, rather than just gasoline consumption. The three senators all pointed out that gasoline consumption only accounts for roughly 60% of U.S. and since the issue is oil dependence rather than gasoline dependence, a focus on oil reductions is more appropriate than a focus on gasoline.

    Senator Domenici, who led the floor debate on the bill today, strongly opposed simply setting targets for oil reductions and pointed out that the fuel economy reforms and alternative fuel standards in the current energy package would actually achieve real reductions, rather than just set goals. "They don't save one single drop of gasoline ... they are simply goals, things we would like to do," Bingaman said of the Coleman/Lieberman/Bayh amendment.

    The Coleman/Lieberman/Bayh amendment (Amendment 508) replaces the gasoline reduction targets section of HR.6 and would instead require the Administration (the Office of Management and Budget, or OMB) to develop and publish an action plan to cut oil consumption in the United States by 2.5 million barrels per day by 2017, roughly equivalent to the total current imports of oil from the Middle East. The amendment also targets a reduction of 7 million barrels per day by 2026 and 10 million barrels per day by 2031.

    The OMB action plan should consist of a federal government-wide assessment of existing and potential federal programs and policies authorized by law upon the adoption of HR.6 to reduce oil consumption and should detail the expected oil savings to be accomplished by each program such that the overall plan achieves the specified oil consumption reduction targets.

    The amendment also authorizes and directs the secretaries of federal agencies (Departments of Energy, Agriculture, Defense, Environmental Protection, etc.) to implement the policies recommended by the action plan. If the policies and programs adopted by each federal agency are not sufficient to achieve the reduction targets specified under the action plan, the secretaries of those departments are directed to establish new policies and regulations to achieve the reduction targets.

    While I agree with Domenici's statements about real reductions versus goals, I don't see how changing the gasoline reduction goals currently in the bill to an oil reduction goal harms the integrity of the current energy package at all. In fact, directing the heads of federal agencies to promulgate policies that reduce oil consumption could only aid the overall goals of the energy package. Domenici's rather consistent opposition to this amendment is a little inexplicable to me.

    Update 5:00 pm PST, 6/12/07: the Coleman/Lieberman/Bayh amendment was adopted at the close of today's debate, 63-30.

    Renewable Fuels Standard vs. Alternative Fuels vs. Low Carbon Fuels Standard

    The current energy bill establishes a renewable fuels standard of 36 billion gallons per year by 2022. The standard includes a requirement for advanced biofuels, which does not include ethanol derived from corn starch, to meet 60% of the total renewable fuel requirement by 2022. The bill includes incentives for advanced biofuels, including cellulosic ethanol, such as grants for infrastructure development, and financial support for research and development.

    The current RFS specifies 7.5 billion gallons of renewable fuel by 2012.

    Several bills have been introduced this session that present alternatives to the renewable fuels standard approach. These include support for alternative fuels, which would include synthetic gasoline or diesel fuels produced from coal or natural gas, along with the renewable biofuels included in the current RFS proposal.

    Senator Barak Obama (D-IL) has proposed support for expanded Coal-to-Liquids fuel production and is expected to offer his bill as an amendment to the energy package.

    A Low-Carbon Fuel Standard, modeled after the standard adopted in California earlier this year (see previous post) has also been proposed by Senator Obama and could be proposed as an alternative to the RFS included in the energy package.

    What's Missing

    The 'comprehensive' energy package is a good start for a Congress that is finally getting down to addressing America's energy dependence. There are however several missing components.

    The bill does a good job beginning to address oil consumption in the transportation sector, with improved vehicle fuel efficiency and expanded use of renewable fuels. The bill should, in my opinion, have more of an emphasis on plug-in hybrid electric vehicles, but it does provide some expanded research and development support for advanced batteries and electric drive vehicles.

    The bill does a less than satisfactory job addressing the electricity sector however. A national Renewable Energy Standard is key to providing long-term, stable policy support for the development of America's largely untapped but plentiful renewable energy resources. If Bingaman's 15% by 2020 RES proposal is not adopted, this bill should hardly be considered 'comprehensive.'

    Also missing are strong national energy efficiency standards for lighting, appliances, industrial processes and building codes which would greatly reduce the consumption of electricity and natural gas in the United States.

    And of course, the glaring absence is the lack of any policies specifically addressing climate change. It seems that climate change legislation will likely move as a separate package of legislation, perhaps providing another chance to remedy the shortcomings of this 'comprehensive' energy package.

    Still, this bill is a good start, and it's refreshing to see Congress begin to address these pressing energy issues. Let's see how this bill, and a corresponding package on the House side, fairs as it moves through Congress.


  • Text of proposed Bingaman federal Renewable Portfolio Standard amendment to HR.6 (pdf)


    Tom Gray said...

    Inside word on the Bingaman Renewable Portfolio Standard is that the vote will be very tight. If you support this concept, the time to weigh in is right now. You can reach any Senator's office through the Capitol switchboard at 202-224-3121.

    Thomas O. Gray
    American Wind Energy Association

    Jesse Jenkins said...

    Green Car Congress just posted a good table showing all the various proposed amendments to the Energy Package. Check it out here.

    Tom Gray said...

    The Domenici amendment was defeated, 56-39, at around noon today. Supporters of the Bingaman Renewable Energy (or Portfolio) Standard are urged to call their Senators ASAP (see above comment).

    Thomas O. Gray
    American Wind Energy Association

    Jesse Jenkins said...

    Green Car Congress has diligently posted an update summarizing the literally more than 100 amendments proposed to the CLEAN Energy Act, HR 6. Clearly, not all of these will receive a vote, but check out the table to see what has been voted on so far, and get an idea of what's to come in the debate, which will continue on Tuesday.