Three senators at the center of the debate over cap and trade’s place in energy legislation (left to right): Graham, Kerry, Liebeman. (image: mnn.com)

Key Senate Democrats say they will support an existing energy bill that does not include a cap and trade provision, and are trying to convince their colleagues to do the same, an article on the website MotherJones.com reported on Tuesday. Buzz about a climate change of heart on the part of the Democrats grew louder last week, when the media reported that Sens. John Kerry (D-Mass.), Joseph Lieberman (I-Conn.), and Lindsey Graham (R-S.C.), who are trying to win bipartisan support for their own compromise energy and climate legislation in the Senate, were planning to do away with cap and trade altogether. The two anti-cap and trade movements represent a larger trend in the Democratic caucus: the perception that dropping cap and trade (or any carbon dioxide emissions limits) from climate legislation is the only way to get it passed.

Possible elimination of the cap and trade provision from the American Clean Energy Leadership Act (ACELA), which was approved by the Senate Energy and Natural Resources Committee last June, raises several concerns. For starters, doing away with a carbon cap may spell doom for an international climate treaty. Other big carbon emitters, most notably China, want to see the U.S. make meaningful reductions in carbon emissions before they commit to their own reductions. In November, China agreed to curb its carbon intensity 40–45 percent from 2005 levels by 2020, although it does not want these emissions targets to be legally binding.

Another potential problem with the bill, according to environmentalists, is that it could increase, rather than decrease, carbon emissions by making too many concessions to big energy interests. The bill would lift a ban on drilling on the eastern Gulf of Mexico, just 45 miles off the Florida coast. In addition, an expansion of federal authority over the placement of power lines called for in the bill could increase emissions, said David Lashof, director of the climate center at the National Resources Defense Council. He explained that more electricity infrastructure without a corresponding cap on carbon would make it easier to bring new coal plants onto the grid and increase output at existing plants.

ACELA also contains few provisions for clean, renewable energy. Although it requires utilities to produce 15 percent of power from renewable resources within the next 11 years, solar and wind advocates say that renewable electricity standard is not ambitious enough Grist.com reported.

Although the bill would establish an agency called the Clean Energy Deployment Administration, or CEDA, it also would empower the Department of Energy to distribute an unlimited number of loan guarantees to underwrite the construction of nuclear power plants without congressional review. According to the Congressional Budget Office, the chance of default on these loans is at least 50 percent, so the bill could wind up costing taxpayers billions of dollars.

Those who support ACELA include Democrats Jim Webb (Va.), Mary Landrieu (La.), Evan Bayh (Ind.), Ben Nelson (Neb.), Kent Conrad (N.D.), Byron Dorgan (N.D.), Mark Pryor (Ark.), and Blanche Lincoln (Ark.). Republicans Lisa Murkowski (Alaska), Sam Brownback (Kan.), Bob Corker (Tenn.), and Jeff Sessions (Ala.), who voted the bill out of committee, could also come on board.
Supporters of the bill argue that getting the measure passed is more politically feasible than getting a cap and trade provision thorough the Senate. In an omission that cold signify the White House’s quiet assent to the elimination of cap and trade from climate legislation, President Obama did not refer to a cap and trade system or any plans to cut greenhouse gas emissions in last week’s State of the Union speech.

Obama did, however, praise the House of Representatives for passing the American Clean Energy and Security Act (ACES), also known as the Waxman-Markey bill, which includes a cap and trade provision. He also urged the Senate to make a bipartisan effort to do the same.

ACES calls for the reduction of greenhouse gas emissions in the US to 17 percent below 2005 levels by 2020 and 83 percent below 2005 levels by 2050. It also requires utilities to generate an increasing amount of power from renewable sources and reduce dependence on foreign oil.

The Clean Energy Jobs and American Power Act (CEJAPA), sponsored by Sens. Kerry and Barbara Boxer (D-Calif.) and a companion bill to ACELA, would begin with the same 3 percent cut in carbon emissions by 2012 as ACES, but would require a sharper cut of 20 percent by 2020. Kerry, Lieberman, and Graham have proposed cutting U.S. greenhouse gas emissions by 2020 by about 17 percent of 2005 levels, the same goal put forth in the Waxman-Markey bill.

Both ACES and CEJAPA would establish a system of carbon credits, in which regulated industries would have to acquire carbon permits. However, the Waxman-Markey bill would establish a relatively free carbon market, allowing emitters to purchase carbon credits as needed, while the Boxer-Kerry measure would try to control costs to polluting industries by capping the price of credits at $28 per unit. Kerry, Lieberman, and Graham initially pledged continued support to the concept of a cap and trade system, although the senators said that they do not support the name “cap and trade.” Take a look at this comparison of the various climate bills in Congress posted in October of last year to get a more detailed description of each piece of legislation.

As cap and trade loses favor in Congress and the chances of passing comprehensive climate and energy legislation appear as bleak as ever, the Natural Resources Defense Council has stepped up efforts to force legislative action. The NRDC’s Action Fund this week launched a web-based video in which Leonardo DiCaprio and a host of Hollywood stars, with Cornell West of Princeton University thrown in the mix, exhort Americans to urge their senators to support comprehensive clean energy and climate legislation.

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The campaign uses online tools such as social networking, blogs, and e-mail to tell the Senate that the country needs legislation that will reduce carbon pollution and create clean energy jobs. It appears that the NRDC believes that grassroots action by green-minded citizens reinforced by major star power could turn around the fate of climate legislation. However, the way the political winds are currently blowing in Washington, it would take no less than a hurricane of constituent pressure to change the minds of senators who have taken up firm positions against the enactment of any greenhouse emissions reduction laws any time soon.

President Obama follows through with Copenhagen promise, but the Senate’s role is still unclear. (image: timesonline.co.uk)

In encouraging but slightly underwhelming news, the United States gave formal notice to the UN last week that it would embrace the Copenhagen Accord and reduce greenhouse gas emissions. According to the Guardian, Todd Stern, the State Department envoy for climate change, told the UN that America “could cut carbon emissions by 17% from 2005 levels by 2020.” Of course, he added, such action would be contingent upon Congressional climate change legislation.

The Guardian found the announcement especially encouraging coming on the heels of Wednesday’s State of the Union address, in which President Obama promised to move forward with his energy and climate change agenda. The 2020 commitment is only a first step, to be followed with a 42 percent cut in 2030, and a cut of more than 80 percent by mid-century.

Under the watered-down accord reached in Copenhagen, countries were expected to offer formal proposals of action by January 31. But with an “elastic” deadline, many fear any momentum generated by the Copenhagen talks has fizzled. Obama’s recent pledge to continue with the climate agenda, as well as his embracing the Copenhagen Accord, is hoped to generate some continued movement.

As both the Los Angeles Times and TreeHugger.com pointed out Friday, Obama’s move was somewhat bold since following through with his pledge will be impossible without approval from the Senate. Although the bill has passed in the House, its prospects in the Senate are uncertain amid the debate over healthcare and after the recent special election that took away a Democratic senate seat.

Global reaction to Obama’s UN pledge has been virtually nonexistent, with most news outlets focusing on the news of the national budget released Monday. Besides the obvious importance of economic news in this global recession, it is likely that many see this pledge as nothing more than good intentions. The real news will be if and when the Senate can make it official.

In regards to commitments made by other nations, the Maldives blows everyone out of the water with a promise of 100 percent carbon neutrality by 2020. China has stuck to its course of lowering carbon intensity by 40 to 45 percent by 2020, which would leave it free to infinitely raise emissions, making it very difficult for other developed nations to make compensating cuts. The EU has pledged to cut its emissions by 20 percent by 2020, while India has pledged a carbon intensity reduction of 20–25 percent. Canada has matched the US target of 17 perfect by 2020, and Japan has ambitiously reiterated its plan to “achieve absolute emissions cuts” of 25 percent, providing other developed nations follow suit.

In addition to the Grist article cited above, you can find a comprehensive list of 33 nations and what they have pledged to cut on the US Climate Network’s website.

House Majority Leader Steny Hoyer. (image: wellsy.wordpress.com)

As Reuters reported January 20th, House Majority Leader Steny Hoyer stated that the pending cap-and-trade legislation may be split in two, so the more politically viable section supporting alternative energy can be passed while wrangling continues on how—and even whether—to limit carbon emissions.

This idea came in response to Republican Scott Brown’s upset victory in the Massachusetts Senate race. Brown and his defeated opponent, Democrat Martha Coakley, have diametrically opposed views on carbon legislation and cap-and-trade. Whereas Coakley supports the bill and limiting carbon emissions—in fact, it was a lawsuit she brought as Massachusetts’ Attorney General that led to the EPA declaring that greenhouse gases pose a public health hazard—Brown has stated that he stands squarely against limits on greenhouse gases. Coakley’s loss to Brown deprives Senate Democrats of a filibuster-proof majority, darkening prospects for passing highly contentious, divisive legislation.

The degree to which limiting greenhouse gas emissions is deeply unpopular, owing to its potential to reduce jobs while raising energy costs for most Americans, can be seen in the fact that some Senate Democrats have joined Republicans in opposing EPA regulation of greenhouse gases.

While not everyone is giddily optimistic about alternative energy, the prospect of supporting it engenders nothing like the opposition that limiting or taxing carbon does. After all, supporting alternative energy development can be positioned as a jobs creation measure. Since alternative energy draws much less fire than cap and trade, as Hoyer put it, “[w]e ought not to let one be the victim of the other . . .I think we can move ahead on energy independence” through encouraging the development of new energy sources.

Democratic retrenchment on cap and trade is just part of a general reevaluation, in the face of the loss of a critical Senate seat (and more broadly, the signal that loss sends about the political mood of the electorate), of legislative priorities. For example, the Obama administration and its Congressional allies’ top priority, health care legislation, is likewise being examined for what may be viably passed post-Brown.

While it’s early to make a prediction about someone who has yet to formally take office, it appears that Brown is going to cast a long shadow in 2010 that will almost certainly extend to greenhouse gas reduction and energy reform legislation.

It only looks like milk measured out for baking—that beaker is filled with biofuel. (image: washcoll.edu)

Washington College in Chestertown, MD recently announced that they had tested 100-percent biofuel in one of the school’s boilers in preparation for a possible switch to biofuel heat, in keeping with a trend seen in school districts and municipalities around the country. Just one boiler at the college currently consumes 100,000 gallons of no. 2 heating oil a year. Using straight biofuel—not a biofuel blend (such as Bioheat), which would be much more common—would reduce the school’s carbon footprint massively. The test indicated a 51-percent drop in nitrous oxide emissions, and the fuel contains no carbon material or sulfur.

This preliminary test was intended to see if the benefits of burning the 100-percent biofuel are what they were purported to be; after seeing the results, a switch in fuels will likely figure into Washington College’s plans to reduce its greenhouse gas emissions to pre-2000 levels through the American College and University Presidents Climate Commitment. “If it were up to me, we’d make the switch tomorrow,” said Briggs Cunningham, Climate Action Coordinator at the Center for Environment & Society at the college. “We’ll keep our fingers crossed—I see only advantages and no disadvantages.”

Switching to 100-percent biofuel wouldn’t require any mechanical adjustments to the heating system, only a thorough scrubbing of the tanks. The cost per BTU is expected to be the same as for no. 2 heating oil, although a greater volume of the biofuel would be needed to achieve that output.

ExxonMobil CEO Rex W. Tillerson. (image: planetark.org)

In its latest report, ExxonMobil said that rising energy demand over the next two decades will require investment in the development of all potential energy sources, United Press International reported on Wednesday. The report, “New Outlook for Energy: A View to 2030,” predicted that energy demand in 2030 would be about 35 percent higher compared to demand in 2005, and meeting that demand would require “trillions of dollars of investment and a commitment to innovation.”

ExxonMobil’s outlook included the potential effects of carbon emissions reduction policies (the same policies being discussed at the Copenhagen conference this week) on energy demand and the global share of different energy sources. The company said that imposing higher costs for carbon emissions would drive energy prices higher and provide an incentive to switch to less carbon-intensive fuels such as natural gas.

The oil giant said that fossil fuels such as oil, coal, and natural gas will continue to meet most global energy needs in the near future, “because no other energy source can match their availability, versatility, affordability, and scale.” It added that the use of natural gas will grow the fastest, because of “its abundance, versatility, and economic advantages as an efficient, clean-burning fuel for power generation.”

The report also stated that the natural gas supply is set to increase, particularly in the U.S. Unconventional gas supplies (supplies accessed with relatively new technologies like hydrofracking) in the U.S. are expected to meet more than 50 percent of domestic gas demand by 2030.

Although turning energy sources with a smaller carbon footprint into practical solutions will be a major challenge, ExxonMobil remains optimistic about the future. “We see many hopeful things — economic recovery and growth, improved living standards and a reduction in poverty, and promising new energy technologies,” said Chairman and Chief Executive Officer Rex W. Tillerson.

However, the company also sees a tremendous challenge, and “that is how to meet the world’s growing energy needs while also reducing the impact of energy use on the environment,” Tillerson said. He went on to say that supplies of all economic fuel sources must increase to meet projected increases in global energy demand.

The global population is projected to rise to almost 8 billion, so the demand for energy indirectly applied to serve growing societies will also increase.

ExxonMobil said that gains in energy efficiency are expected to accelerate rapidly between now and 2030, compared to historical trends. It said that efficiency gains will suppress growth in energy demand through 2030 by about 65 percent.

If and when petroleum refiners are forced to pay for carbon emissions through cap and trade and/or carbon taxes, ExxonMobil’s predictions would mean higher prices for energy users, and for heating oil consumers specifically. Over time, prices should decrease however, as renewable fuels become a bigger part of the heating oil mix, and the overall demand for petroleum-based fuel decreases.

Exxon, the largest oil company in the US, has been a vocal critic of the EPA’s plans to regulate carbon emissions. (image: romleys via flickr.com)

The Environmental Protection Agency’s announcement that it will begin regulating greenhouse gases—should the Senate fail to pass climate change legislation—has predictably attracted the ire of American industry. On Monday, HeatingOil.com reported that the EPA declared greenhouse gases to be a threat to public and environmental health.

In less than twenty-four hours spokespeople representing numerous industries and corporations issued their responses. On Tuesday Bloomberg reported that Exxon Mobil considers the Obama administration’s attempt to characterize carbon emissions as a health hazard as the “least efficient and least transparent” way to tackle climate change. Although the company does not endorse the cap and trade proposal currently floating around the Senate, Exxon believes that EPA regulation would be even more pernicious to the economy and oil industry and asserts that the EPA is not able to handle “a regulatory challenge of this type.”

Big oil is not the only industry decrying the EPA’s recent announcement. On Monday the Wall Street Journal reported that various industries have spoken out against EPA carbon regulation. Charles T. Drevna, president of the National Petrochemical & Refiners Association, asserted that “American consumers and businesses alike will be dramatically affected” by the costly changes required by EPA regulation. And the Air Transport Association has argued that one country’s attempt to regulate greenhouse emissions is pointless because emissions are not bound by national borders.

Apparently opting for what they feel is the lesser of two evils, some industry executives have asserted that if there is to be regulation, it would be better handled by Congress. David Ratcliffe, chief executive of utility company Southern Co. noted that “a [Congressional] carbon bill would give more clarity to what you need to do and when.” Michael Parr of DuPont agrees, stating that “only Congress can enact the kind of comprehensive program needed to ensure we achieve emissions reductions in the most cost-effective manner.”

Democrats have recently failed in attempts to garner industrial support of cap and trade by including nuclear energy and expanding offshore drilling as bargaining chips. Exxon’s vice president for public and government affairs, Kenneth Cohen, has suggested that the government scrap cap and trade and instead implement a carbon tax, which Cohen says would better spread out the costs of such as system and limit price volatility. Critics say there is more gamesmanship than sincerity in Exxon’s advocacy of a carbon tax, and that Exxon hopes to avoid all regulation by supporting a measure—the carbon tax—that is doomed to fail.

While it seems that numerous industries have concluded that carbon regulation is needed, or is at least inevitable, it is clear that they are concerned over the costs that regulation will entail and favor proposals that clearly identify the new obligations and regulations to be imposed on businesses.