In New Jersey, corruption in the heating assistance program took money from families in need. (image: blogtalkradio.com)

The local manager of a heating assistance program pleaded guilty on Friday to stealing more than $24,000 in state funds, reports NewJerseyNewsroom.com. As HeatingOil first reported in August of last year, Constance Campbell took advantage of her position as Home Energy Assistance (HEA) manager for Tri-County Community Action Partnership to file false applications for herself and five family members, all of whom have also pleaded guilty. Campbell and the involved relatives worked with a local heating oil dealer to cash HEA checks intended for purchases of heating oil.

Tri-County Community Action Partnership was contracted by the state of New Jersey to administer the state’s heating assistance program in Cumberland, Gloucester, and Salem counties. The program is part of the federally funded Low-Income Home Energy Assistance Program (LIHEAP), which is administered at the state level and is often referred to as HEAP or, as in New Jersey, HEA.

Campbell processed fraudulent applications for her own benefit that amounted to $4,089, and $19,921 worth of fraudulent applications for her family members, none of whom were eligible for HEA benefits. Campbell is responsible for full restitution for all funds, and her family members will share responsibility for restitution of the money they received.

In addition to restitution, Constance Campbell and three other family members face possible time behind bars. The state will recommend that Constance Campbell be sentenced to five years in state prison for the charge of official misconduct. A sister, Patsy Campbell, a brother, Dennis Campbell, and his wife, Hollyann Allen were charged with theft by deception and the state has recommended they be sentenced to 364 days in county jail. Two other sisters, Denise Campbell and Priscilla Campbell, pleaded guilty to misapplication of entrusted government property and do not face jail time. Sentencing is scheduled for May 27.

Of the $24,010 that the Campbell family diverted from New Jersey families in need of heating assistance, the bulk of it—$15,000—was converted into cash with the help of Thomas Harris, the owner of Harris Fuel Oil in Paulsboro, NJ. Last August Harris pleaded guilty to money laundering and misapplication of government property. By issuing cash for HEA checks instead of heating oil, he defrauded the HEA program of over $400,000 and could receive four years in prison.

The $24,000 stolen by the Campbells is a relatively paltry sum compared to the profits of international oil companies or the bonuses paid to Wall Street executives, but it was taken from a program already straining to help those in need. Rep. Ed Markey (D-MA) has called for more money to be made available, and LIHEAP applications have reached record numbers in each of the last three years. The typical LIHEAP award is only $500 per household, which is not enough to cover a family’s heating costs for the winter, and is only a stopgap measure. The $24,000 diverted to the Campbells could have helped roughly 48 New Jersey families in danger of being without heat in the winter.

Representative Markey receives his award from NEADA Executive Director Mark Wolfe. (image: markey.house.gov)

On Tuesday, Congressman Ed Markey (D-MA) received an award for his continued support of government heating assistance through the Low-Income Home Energy Assistance Program (LIHEAP), the Belmont Citizen-Herald reported. Markey’s award came from the National Energy Assistance Directors’ Association (NEADA), a private organization that bills itself as “the primary educational and policy organization for the state and tribal directors of the Low-Income Home Energy Assistance Program (LIHEAP).”

As the representative for a heating oil-dependent and populous cold-weather state, Markey has long been a champion of LIHEAP. Most recently, he sponsored the Energy Assistance for American Families Act, which would increase LIHEAP funding from 2011 to 2014 and expand the program to make more Americans eligible to receive help with their heating costs. The bill has not yet been brought to a vote in either house of Congress. Speaking at an award ceremony in Washington, D.C., Markey stressed the widespread need for heating assistance in the Northeast this season:

New England was the site of the perfect storm off our coast, the winds rising as the barometer dropped and temperatures plunged. This winter, rising heating oil prices, an economic downturn, and plunging temperatures have created an economic perfect storm onshore for millions of New England families.

This year is the third in a row in which requests for LIHEAP assistance set a new all-time high. In addition to introducing the assistance bill, Markey announced a four-part plan to continue expanding LIHEAP: requesting the release of $100 million in remaining emergency funds by President Obama this heating season, pressing Congress to pass a supplemental appropriation to ensure all those who need it get assistance this year, advocating an immediate increase in LIHEAP funding for next winter, and passing the Energy Assistance for American Families Act.

In his remarks, Markey gave special attention to the plight of heating oil users, indicating that he is well acquainted with the unpredictability of heating oil prices and the toll it can take on Americans. Although the troubled economy could prevent the significant increases in LIHEAP funding that Markey is pushing for from passing, his efforts will keep the issue of heating assistance in the minds of his fellow legislators.

Heating oil users who struggle to pay their bills can take comfort in knowing that they have a tireless advocate in Congressman Markey.

Congressman Ed Markey has introduced legislation to expand assistance to families who need help paying their energy bills. (image: katynally.wordpress.com)

GateHouse News Service reported on Tuesday that US Representative Edward Markey (D-MA) introduced legislation to increase federal funding for the Low Income Home Energy Assistance Program (LIHEAP), which provides energy assistance to needy families, by more than 30 percent.

Markey explained in a statement that he introduced the Energy Assistance for American Families Act in response to difficult economic times, falling temperatures, and rising prices for heating oil and other heating fuels, which combined to increase demand for heating assistance this winter. “Expanding LIHEAP’s funding and availability is absolutely vital,” Markey stated.

Markey’s bill would increase total annual LIHEAP funding from $5.1 billion to $7.6 billion from fiscal years 2011 to 2014. The FY 2011 start date means that, if the bill is passed, additional funds won’t be available until next heating season (fiscal year 2011 runs from October 2010 to September 2011). The legislation represents the possibility of a substantial medium-term increase in LIHEAP funding, following a short-term request for additional emergency funds put forth by six New England senators in early January of this year. President Obama responded to the request by releasing emergency funds two weeks later.

If the Energy Assistance for American Families Act becomes law, it would provide much-needed extra cushioning for LIHEAP next year, after a projected 20 percent increase in demand for heating assistance this winter. The big funding boost would allow LIHEAP to provide help to more Americans in need and increase assistance levels to many recipients.

Heating oil users in the Northeast would see increased chances of getting all of the assistance that they need next year and beyond.

Illustration of carbon cap-and-trade. (image: granitegeek.org)

On Sunday, the Washington Post published an opinion piece by Ralph Izzo, chief executive of New Jersey’s Public Service Enterprise Group (PSEG), in which he offered his support for a cap and trade system to reduce greenhouse emissions. Although many energy corporations are hesitant to throw their support behind cap-and-trade and climate legislation, Izzo pleads for Congress to pass a strong climate bill. While admitting that current climate change legislation requires changes Izzo asserts that the most important thing to do right now is to put a price on carbon via cap-and-trade. According to Izzo, the benefits of implementing a cap-and-trade system far outweigh the estimated costs of such a program.

Aside from the environmental benefits of limiting global warming, Izzo argues that Congressional approval of climate change legislation will allow the United States to keep up with the countries of Europe and Asia that have already made great strides in developing and implementing alternative energy sources. Furthermore, Izzo asserts that placing prices on carbon is the first step to making the United States less dependent on foreign energy and will promote the creation of green industries and jobs. Perhaps most important, Izzo notes that cap-and-trade should be thought of as “cap-and-innovate” as cap-and trade “will give companies an economic foundation for investments in energy efficiency and clean energy, unleashing the innovation that only a well-functioning market can provide.”

It should be noted that PSEG could stand to gain from cap-and-trade as nearly half of their power derives from nuclear energy. As previously reported by HeatingOil.com, nuclear power does not emit carbon dioxide or contribute to global warming. Therefore, if cap-and-trade does emerge, PSEG could profit from selling the carbon credits it does not use as a result of its nuclear energy generation.

Recently Democrats have used nuclear energy in an attempt to gain Republican support for cap-and-trade as many prominent Republicans such as John McCain, Lamar Alexander, and Lindsey Graham are supportive of increased use of nuclear power. Despite such compromises however, Republicans, like Big Oil, continue to oppose any emissions-reduction legislation.

One oil corporation that is not supportive of cap-and-trade regulation is Sunoco. On November 19 HeatingOil.com reported that Sunoco CEO Lynn Elsenhan complained that the American Clean Energy and Security Act sponsored by Representatives Edward Markey and Henry Waxman “did not establish a level playing field and clearly picked US oil refiners as ‘losers.’” Speaking directly to cap-and-trade, Elsenhan asserts that “asking US refiners to be responsible for their customers’ emissions puts them at ‘great peril.’”

While it remains to be seen whether or not a cap-and-trade system will be successful (if it is ever established), the current climate of debate surrounding carbon emissions suggests that Ralph Izzo is correct to note that no one “will be completely satisfied with the final legislation.”

Sunoco CEO Elsenhan (left) objects to the cap and trade measures proposed by Rep. Markey. (image: engineering.rice.edu and upi.com)

Sunoco CEO Lynn Elsenhan and Rep. Edward Markey (D-Mass.) exchanged words during a session at this week’s Wall Street Journal CEO Council in Washington, D.C., the Journal reported on Wednesday. As shown in the video below, Elsenhan said that the American Clean Energy and Security Act, which is sponsored by Rep. Markey and Rep. Henry Waxman (D-Calif.), did not establish a level playing field and clearly picked US oil refiners as “losers.”

She went on to say that the cap and trade measures in the ACES bill, also known as the Waxman-Markey bill, did not resemble the European measure they were modeled after. “Europeans got their cap and trade allowances for nothing,” she said, “and they are not responsible for the emissions of their customers.” They are only responsible for the own stationary emissions.

Elsenhan said:

I am very willing to have all of my stationary emissions be paid for by cap and trade” and be more energy efficient, but asking US refiners to be responsible for their customers’ emissions puts them at “great peril” and makes their ability to cap and trade more important than their ability to refine crude into products and deliver those products to customers.

In response, Markey said that the bill contained $2.5 billion to “deal with” the additional costs to the refining industry, and that this provision is still subject to negotiation as the bill moves through the Senate. He mentioned that the bill also contained a protective border tariff that is triggered in 2020 to protect energy-intensive, trade-vulnerable industries from exploitation by China, India, and other countries that are not engaging in the same reductions in greenhouse gas emissions as the U.S.

Markey continued by saying that these provisions to protect the US oil industry sent a “real signal” to the world—“We are not going to stand by and watch our steel, aluminum, cement, and other energy-intensive industries be exploited by us moving along with the Europeans.”

The Waxman-Markey bill has been a lightning rod for controversy since it narrowly (219-212) passed in the House on June 26, 2009. The cap and trade provisions of the bill, and its impact on both refiners and consumers alike, are particularly controversial.

However, the debate between Elsenhan and Markey may be moot. Nuclear energy has emerged as a new focus of climate change legislation. Steven Zweig wrote on HeatingOil.com on Oct. 9 that several key Democrats in the Senate, including Sens. John Kerry (D-Mass.) and Joseph Lieberman (I-Conn.) may support nuclear power in exchange for Republican support of cap and trade. As Zwieg wrote on HeatingOil.com on Tuesday, to get climate change legislation passed in the full Senate, Democrats must bargain to gain support of a “critical mass” of Republicans. Such Congressional backroom maneuvering should ensure that any bill that does make it to the president’s desk will bear little resemblance to Waxman-Markey.

(image: washingtonindependent.com)

The biggest obstacles to the most important legislative issues of our day? Political maneuvering, says David Roberts at Grist.com.

Roberts writes that in the House, the climate bill’s legislative process was orderly and progressed smoothly through committees en route to final approval. Henry Waxman and Edward Markey introduced their bill in a special committee and made some necessary concessions, but never lost control of the process. Their goal was to negotiate the bulk of the issues behind closed doors so that when the resulting bill was brought up on the floor, it could pass uneventfully. And that’s what happened.

Unfortunately, the Senate has a different playbook. Barbara Boxer (D-CA), chairman of the Energy & Public Works (EPW) Committee, wanted to replicate the House’s orderly process with the Senate version, the Kerry-Boxer climate bill. She tried, says Roberts, repeatedly expressing her desire to work with others and welcoming feedback and an open dialogue. But it’s not working because politics is getting in the way. Boxer is not particularly popular, partly because of her very liberal stances. Various Democratic committee members within the Senate began marking up the Boxer bill, and two Republicans, James Inhofe of Oklahoma and George Voinovich of Ohio, called for stalling committee debate on the bill.

This prompted a boycott of the EPW committee vote by all Republican members that led to a bill passed out of committee without any GOP involvement.

According to the Associated Press, Boxer said that advancing the bill is a necessary step on the road to garnering the needed 60 votes, and she was pleased that despite the Republican boycott, the Democrats have had the will to move this bill forward.

But Boxer’s influence is waning, says Roberts. Between the Senate Democrats’ predilection for not going along with all Democratic initiatives—as opposed to the strong party discipline found in the House—and the fact that an extremely liberal and combative female Senator was shepherding the bill, it is bound to fail.

As a result, some of the Senate’s centrists came in to open a “dual track” of negotiations. John Kerry (D-MA) and Lindsey Graham (R-SC) rebuked their colleagues on the EPW Committee for not participating. But on the other hand, Graham also asked EPA Chief Lisa Jackson for more time – five more weeks of study, which an EPA official testifying to the EPW said would be expensive, time-consuming, and unnecessary.

In their need to purge the bill of anything Boxer-ish, Kerry and Graham felt they had to draft another one. The final bill will, like most important legislature in Washington, be hashed out in the White House, behind closed doors.

Despite winning committee passage for her bill, Boxer’s attempts to build some bipartisan support have failed, whether fairly or not. According to Roberts, in the Senate it’s every man (or woman) for himself.

Passage of a climate bill in the near future? Don’t hold your breath.

Douglas Elmendorf, director of the CBO, testified before Congress about the costs of the climate bill. (image: economistmom.com)

Adding more fuel to the fire that is the House climate bill—officially the American Clean Energy and Security Act of 2009 (ACES), but better known as the cap and trade bill or the Waxman-Markey bill—Congressional Budget Office (CBO) Director Douglas W. Elmendorf testified before Congress Wednesday that the House bill would slow the country’s economic growth and create “significant” job losses in the fossil fuel industries, reports Juliet Eilperin in the Washington Post. The estimates are in direct opposition with what the Obama administration and congressional Democrats have suggested about the economic benefits of the bill.

Yesterday’s testimony is yet another chapter of the ongoing saga of the purported costs and benefits of the Waxman-Markey bill. In June, the CBO released estimates that showed the bill would only cost American families $175 per year, while acknowledging that costs will rise over time as allowable carbon emissions go down. The CBO noted at the time that the actual cost per family will vary depending on income, with low-income consumers saving about $40 a year, while higher-income families seeing an increase for energy costs of $235 to $340 every year.

Since then, there have been nonstop reports on the real costs and who will benefit most from the bill. In contrast with the CBO’s June estimate, the conservative Heritage Foundation put the price tag at $6800 per family. Rep. Edward Markey, co-sponsor of the bill with Rep. Henry Waxman, put his two cents in, saying that it would cost families “roughly the cost of a postage stamp.” The EPA came up with the cost of $84 per household. The American Petroleum Institute warned of an impending drop in US oil companies refining production level, if the bill was passed. So while costs of the bill may be initially low for consumers, it would eventually drive up the price of refining operations, which get passed along to the public in the form of higher heating and electricity prices.

It remains to be seen how yesterday’s report on the effect of the bill on the economy will be received. Elmendorf did concede that there would be some growth in the renewable energy market, but not enough to compensate for all that will be lost. Republicans seized on the report to say that the country would be better off not curbing greenhouse gas emissions. For those interested in the environmental implications of the bill, Elmendorf made clear that the CBO’s estimates “do not include any benefits from averting climate change,” whether economic or otherwise.

Daniel J. Weiss, a senior fellow at the liberal think tank Center for American Progress, disputed the CBO’s employment forecast and pointed to a study done by the University of Massachusetts at Amherst that concluded that the House bill would add jobs to the US economy.

“We estimate this sustained expansion in clean-energy investments triggered by the economic stimulus program, and the forthcoming American Clean Energy and Security Act, can generate a net increase of about 1.7 million jobs,” Weiss said.

Representatives Henry A. Waxman of California, left, and Edward J. Markey of Massachusetts, both Democrats, are the co-writers of the bill. (image: nyt.com)

Download
PDF version

Few people now deny our greenhouse gas trajectory and its effects on the environment and economy. In the United States, one potential solution to our emissions problem is a mandatory cap and trade program that will impose an overall limit on the amount of greenhouse gases we emit into the atmosphere each year.

On June 26, 2009, the U.S. House of Representatives passed the controversial Waxman-Markey climate change bill – also known as the American Clean Energy and Security Act (ACES) – which aims to “create millions of new clean energy jobs, save consumers hundreds of billions of dollars in energy costs, enhance America’s energy independence, and cut global warming pollution,” according to the summary. (Read the full text on the House of Representatives’ website.) While these goals sound promising and much needed, the immediate effects of the bill could look dramatically different.

Notably, the bill includes a cap and trade program that aims to cut greenhouse-gas emissions in the U.S. by 17 percent below 2005 levels by 2020 and 83 percent by 2050. It also includes a host of other energy provisions, such as requiring utilities to generate an increasing amount of power from renewable sources and a dwindling dependence on foreign oil. These conditions could affect both industry and consumers in staggering ways.

As such, the ACES is being called a “compromise bill” with dissent from both major parties. Most Republicans hate it, and one referred to it as a “declaration of war on the Midwest” while many environmentalists say it’s too watered down. Though President Obama has shown strong support for the bill, it must first get past the Senate, home of even stronger dissent than the House, before it reaches the president’s desk. (In the House, it passed by a slim margin of 219-212.) The bill’s proposed cap and trade program is especially controversial.

Given our carbon emissions problem and the fact that America lags behind other industrialized nations that follow cap and trade programs such as the Kyoto Protocol, one might assume this bill would be well received. But what may seem obvious isn’t necessarily so simple. There are many considerations to keep in mind as the U.S. moves forward in attacking the greenhouse gas problem by utilizing cap and trade.

What is cap and trade, and where does it work?

Also known as emissions trading, cap and trade sets a limit on overall emissions from one source, group of sources, or region. For example, companies that emit less than the cap may save,,sell or give away their remaining credits to companies that emit more than the allocated amount. Hypothetically, let’s set an emissions cap for the US automobile industry at 100 million tons of carbon dioxide per year. If GM uses up their share of credits before the year is up, they’ll have to buy Ford’s unused credits. (They won’t necessarily receive the same number to begin with, since emissions history can dictate how much each receives.) The idea is that the group as a whole – however the group is defined – will not exceed the total emissions budget.
According to the Environmental Protection Agency, it is an “environmental policy tool that delivers results with a mandatory cap on emissions while providing sources flexibility in how they comply. Successful cap and trade programs reward innovation, efficiency, and early action and provide strict environmental accountability without inhibiting economic growth.”

The Kyoto Protocol is perhaps the most well known example of a cap and trade program whereby participating industrialized countries are legally bound to reduce their collective green house gas emissions by 5.2% from 1990 levels. More specifically, the European Union’s Emission Trading Scheme is the largest multi-national emissions trading program in the world. Though it has its flaws and criticisms, the EUETS is now a major element of the region’s environmental policy.

In the US, the Acid Rain Program is an example of a successful cap and trade initiative. Part of the 1990 Clean Air Act, it aimed to reduce reducing annual sulfur dioxide emissions by 10 million tons below 1980 levels as well as a two million ton reduction in NOx emissions by the year 2000. The program has been largely successful and achieved 100 percent compliance in reducing sulfur dioxide emissions by the 1990s. It uses an Allowance Tracking System to keep tabs on transactions and the status of allowance accounts. In 1980, the US EPA recorded 17,261,667 tons of SO2 acid rain. By 2007, that number was down to 8,933,337 tons. In July 2002, The Economist called it “probably the greatest green success story of the past decade.”

There are several potential problems with capand trade programs. Price volatility is common, especially in the beginning. Over-allocation of carbon credits is possible, and meticulous regulation can be difficult. Among other cap and trade programs, the Kyoto Protocol has been criticized for these reasons.