14 May 2009 16:47 [Source: ICIS news]
By Joe Kamalick
House Majority Leader Steny Hoyer (Democrat-Maryland) said this week that concerns among many in Congress about the costs that cap-and-trade will impose on business and consumers has prompted a re-think.
“For those concerned about the costs, the [House] Energy and Commerce Committee has already made significant changes,” Hoyer told a US Chamber of Commerce energy meeting this week.
That significant change, said Hoyer, is “a lower mid-term target for CO2 emissions reduction of 17% from 2005 levels by 2020”.
The original Waxman-Markey climate bill - named for sponsoring Democrat Congressmen Edward Markey of
It is that 20% by 2020 goal that has been cut back to 17%. The other targets remain unchanged.
The revised bill also lowers to 15% the amount of renewable electric power that utilities would be required to produce, as a percentage of their total output, by 2020, down from the original target of a 20% renewable portfolio standard (RPS).
Although these changes seem to some to be a distinction without a difference, President Obama on Wednesday hailed the compromise, saying he wanted to “congratulate Chairman Waxman and the Energy and Commerce Committee Democrats, who’ve made such extraordinary progress in reaching a deal on comprehensive energy reform and climate legislation”.
“This is a major step forward in building the kind of clean-energy economy that will reduce
“I once again call on Congress to send me legislation that places a market-based cap on carbon pollution,” the president added, “which will then drive incentives for the kind of innovation and dynamic, new clean-energy economy that can create jobs and new businesses all across America.”
But the climate bill faces tough sledding - even among Democrats. Popular opinion polls show public concern about and interest in global warming at an all-time low, according to the Rasmussen polling firm. Even among those who think climate change is threatening, most think it is a planetary development unrelated to human activity.
That makes a new tax-imposing, price-raising and job-threatening climate bill a tough sell, even for Democrats.
And for Republicans, the Democrat climate bill seeks to throw a bridge to a shining new energy future using building blocks that just don’t exist yet.
A leading Senate Republican on environmental issues warned on Wednesday that the Democrat-sponsored climate bill will drive up the cost of carbon fuels - and crater the
Senator Lamar Alexander (Republican-Tennessee) told the same US Chamber energy meeting that there is “a dangerous energy gap” underlying cap-and-trade emissions legislation that will commit the nation to impractical and costly alternative power sources while penalising traditional energy resources.
“There is a dangerous energy gap between the renewable energy we would like to have and the traditional energy that we need to have,” Alexander said.
He criticized alternative energy advocates, such as former
“Solar and wind power accounted for 1.5% of our energy generation last year, and of course it plays no role in providing fuel for transportation,” he said.
Alexander, a senior Republican member of the Senate Environment and Public Works Committee, said that there is wide misunderstanding among the public and media about the realities of energy.
“You’ll hear uniformed reporters hailing the potential for, say, a 1,000 megawatt solar farm, but they don’t know that while the solar farm may have a rated capacity of 1,000 megawatts its actual production is only 250 megawatts simply because the sun doesn’t shine at night.”
So too, he said, do wind farms typically produce at one-third of their rated capacity because winds are intermittent and usually strongest at night when electric energy demand is low.
“Renewable energy has a long way to go before it can make much difference in the base load of our electric power generation,” he said. “Our base load electric power resources will remain coal, natural gas and nuclear while renewables can only play a supplemental role.”
“This misunderstanding is helping to drive legislation in the House now that will impose a cap-and-trade emissions mandate on our huge economy, which even in this time of recession still accounts for 25% of the global economy,” he said.
He said an economy-wide cap-and-trade mandate will drive manufacturing jobs offshore by raising energy costs for business and consumers.
“I believe that climate change is real and that we have to do something about it - but let’s not jump off a cliff over it,” he said.
He warned that whatever incentives or carbon penalties Congress might impose, the
“We’re going to drive up the cost of carbon before we can drive down the price of renewable replacements,” he said.
Alexander suggested that Congress instead limit emissions controls and caps to coal-fired power plants on the industrial side and, on the consumer level, create incentives for increasing production and purchase of plug-in electric hybrid automobiles.
“Coal-fired power plants account for 40% of our country’s emissions of carbon dioxide and other greenhouse gases, and tailpipe emissions account for 30%, so if we could tackle just those two areas we could achieve a 70% reduction without causing major damage to the economy,” he said.
He also urged greater use of nuclear power generation, noting that while US nuclear plants make up only 20% of the nation’s electric power, they account for 70% of the sector’s emissions reductions.
House Republican Conference Chairman Mike Pence of
“The reality is that the purpose of cap-and-trade legislation, no matter how it is deployed, is to discourage consumption of CO2-intensive products, energy and means of transportation by raising costs to consumers,” Pence said on Wednesday.
“This is a national energy tax, and the American people know this,” he said.
Pence, who like many members of Congress comes from a state that is heavily dependent on coal-fired power, suggests that heavy, hand-to-gavel fighting lies ahead in both the House and Senate over the climate bill.
“Cap-and-trade legislation represents an economic declaration of war on the Midwest by liberals in
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