Major Enviros Sue Administration On Shell Oil Arctic Drilling Plan

Sep 29: A coalition of Alaska Native and conservation groups headed to court to challenge the Obama administration's decision to allow offshore oil drilling by Shell Oil in the Beaufort Sea in America's Arctic Ocean. In a release, the groups said that after the devastating Deepwater Horizon spill, the Obama administration wisely delayed plans by Shell Oil to drill in the Arctic Ocean. But this August, the administration reversed course and approved the first part of what they called "the most aggressive Arctic drilling proposal in the history of the country" by approving Shell's plans to start drilling in the Beaufort Sea as early as the summer of 2012.

    Earthjustice, on behalf of the Native Village of Point Hope, Alaska Wilderness League, Center for Biological Diversity, Defenders of Wildlife, Greenpeace, National Audubon Society, Natural Resources Defense Council (NRDC), Northern Alaska Environmental Center, Oceana, Pacific Environment, REDOIL, Sierra Club and The Wilderness Society initiated litigation in the 9th Circuit Court of Appeals challenging the decision by the Bureau of Ocean Energy Management, Regulation, and Enforcement (BOEMRE) to allow oil drilling in the Beaufort Sea.

    Earthjustice attorney Holly Harris said, "Allowing Shell to drill when it has no credible plan to cleanup an oil spill in the Arctic's icy waters, and instead simply assumes it can clean up 95 percent of oil spilled, isn't just unrealistic, it's insulting and irresponsible." The groups said, "A spill in the Arctic Ocean would devastate polar bears, bowhead whales and other marine mammals and would severely affect Native subsistence communities, which have thrived in this region for generations."

    Caroline Cannon, president of the Native Village of Point Hope said, "Approving Shell drilling in the Beaufort Sea is irresponsible and risks disaster. We have a right to life, to physical integrity, to security, and the right to enjoy the benefits of our culture. For this, we will fight, and this is why we have gone to court today. Our culture can never be bought or repaired with money. It is priceless."

    The groups indicated that the most recent oil-spill drill in the Beaufort Sea (which took place more than 10 years ago) described mechanical cleanup in icy conditions as a "failure." They provided a link to a video and report on the failure and said, "Nothing has changed since that drill. A recent report to the Canadian government concluded cleanup would be impossible 44 to 84 percent of the time during the short summer drilling season, and completely impossible the other seven to eight months of the year." They indicated that U.S. Coast Guard officials have repeatedly explained that the resources to clean up an oil spill in the waters of the Arctic Ocean simply don't exist. This summer, Commandant Admiral Robert Papp told Congress that the federal government has "zero" spill response capability in the Arctic.

    Additionally they cite a recent report by the U.S. Geological Survey (USGS) which they say makes clear, basic scientific information about nearly every aspect of the Arctic Ocean ecosystem is missing. They said, "This lack of data makes it impossible to adequately assess the risks and impacts of drilling to wildlife and people in the Arctic and, as a result, makes it impossible to make informed, science-based decisions."

    Cindy Shogan, executive director of the Alaska Wilderness League said, "Any oil company that wants to drill in the Arctic Ocean must demonstrate an ability to clean up oil spilled in these icy waters with proven technology. Shell's current oil spill plan is full of inadequacies and falsehoods. Shame on the Obama administration for allowing politics to trump science by approving such an unrealistic plan to drill in the Beaufort Sea." Rebecca Noblin, Alaska director for Center for Biological Diversity said, "Given the risk of a catastrophic oil spill, the Obama administration should not allow Shell to play Russian roulette with the future of polar bears, Pacific walruses and the entire Arctic ecosystem. If polar bears, walruses and other imperiled species are going to survive in a rapidly melting Arctic, we need to protect their critical habitat, not sacrifice it to oil companies."

    Sierra Weaver, attorney for Defenders of Wildlife said, "Both Shell and the federal government are proceeding as if the Deepwater Horizon oil disaster -- the worst environmental catastrophe this country has ever seen -- simply didn't happen. Pretending there's no risk associated with drilling, especially in the fragile waters of the Arctic, is not only irresponsible, it's unacceptable." Chuck Clusen, NRDC's director of national parks and Alaska projects said, "Water and oil may not mix, but ice and oil is even worse. Any drilling in Camden Bay -- right off the shore of the Arctic National Wildlife Refuge -- is unacceptable. A proper process or technology does not exist that could appropriately protect or clean up this sea. A spill could spoil the barrier islands of the Refuge threatening many species of wildlife, poison the migratory route of the endangered bowhead whale and kill other marine mammals such as polar bears, walrus and ice seals and substantially damage the very sensitive ecology of the Beaufort Sea for what could be many years."

    On September 19, U.S. EPA Region 10 issued final air quality permits to Shell for oil and gas exploration drilling in the Alaska Arctic. The permits will allow Shell to operate the Discoverer drillship and a support fleet of icebreakers, oil spill response vessels, and supply ships for up to 120 days each year in the Chukchi Sea and Beaufort Sea Outer Continental Shelf starting in 2012. EPA also noted that it has proposed another draft air permit for Shell to operate its drilling rig Kulluk, in the Beaufort Sea starting in 2012. Many of the same organization opposed those permits and said, "The EPA decision to issue these inadequate permits is one more step down the path toward drilling operations in the Beaufort and Chukchi Seas that pose a grave danger to the Arctic environment. . ." [See WIMS 9/21/11].

    Access a release from the organizations with more quotes from the organizations and links to the lawsuit and attachments (click here). Access the video of the failed cleanup and link to the report (click here). Access more information on BOEMRE's approval of Shell's Beaufort Sea Exploration Plan (click here) [#Energy/OCS]

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Battle Lines Drawn Over OIG Report On Endangerment Finding

Sep 28: U.S. EPA released a statement on the Agency's Office of Inspector General (OIG) report on the process and procedure it used in developing its Endangerment and Cause or Contribute Findings for Greenhouse Gases Under Section 202(a) of the Clean Air Act [See WIMS 9/28/11]. EPA emphasized that, "Some news accounts have mischaracterized the report's findings." The Agency included a number of highlighted excerpts from the report in addition to its statement. 

 

    Senator James Inhofe (R-OK) Inhofe, and avid critic of climate change science and EPA actions to control GHG emissions, who requested the report from OIG reacted immediately and said the report indicated EPA endangerment finding "was rushed, biased, and flawed. It calls the scientific integrity of EPA's decision-making process into question and undermines the credibility of the endangerment finding." He said, "I am calling for the Senate Committee on Environment and Public Works, the committee of jurisdiction over the EPA, to hold immediate hearings to address EPA's failure to provide the required documentation and have the science impartially reviewed. . ."

 

    EPA said in its official response, "We appreciate the important role played by the Inspector General's Office and will give the recommendations in this report the utmost consideration. Most importantly, the report does not question or even address the science used or the conclusions reached -- by EPA under this and the previous administration -- that greenhouse gas pollution poses a threat to the health and welfare of the American people. Instead, the report is focused on questions of process and procedure. While EPA will consider the specific recommendations, we disagree strongly with the Inspector General's findings and followed all the appropriate guidance in preparing this finding.

    "EPA undertook a thorough and deliberate process in the development of this finding, including a careful review of the wide range of peer-reviewed science. Since EPA finalized the endangerment finding in December of 2009, the vast body of peer reviewed science that EPA relied on to make its determination has undergone further examination by a wide range of independent scientific bodies. All of those reviews have upheld the validity of the science."

    EPA highlighted the following excerpts from the OIG report:

• EPA met statutory requirements for rulemakings.
• We did not test the validity of the scientific or technical information used by EPA to support its endangerment finding.
• We did not make conclusions regarding the impact that EPA's information quality control systems may have had on the scientific information used to support the endangerment finding.
• EPA fulfilled the statutory requirements for notice and comment rulemakings mandated in the Administrative Procedure Act and in Section 307 of the CAA, and employed several of its processes designed to ensure data quality.
• OMB in response to our draft report stated that OMB believes that EPA reasonably interpreted the OMB bulletin in concluding that the TSD did not meet the bulletin's definition of a highly influential scientific assessment.

    Senator Barbara Boxer (D-CA), Chair of the Environment and Public Works Committee, issued a brief statement saying, "The EPA Inspector General in no way questions the science underlying the endangerment finding. It is time to move on to protect the American people from the impacts of climate change, which we are already beginning to see."

 

    House Energy and Commerce Committee Chairman Fred Upton (R-MI) expressed concerns over the report and said the OIG found "that EPA failed to follow the government's own scientific review requirements" on the endangerment finding for greenhouse gases which he said is "at the core of Obama's climate change regulatory agenda." He said, "The Inspector General's findings call into question the credibility of the endangerment finding and the justification for multiple regulatory efforts that stemmed from that finding. EPA failed to conduct its proper due diligence and now the American people will be forced to pay the price. 

    "Sound process is critical to sound outcomes, and the credibility of federal policy and regulations is compromised when agencies cut corners. EPA's controversial greenhouse gas regulations are projected to cost tens of billions of dollars and could eliminate up to 1.4 million jobs by 2014. Clearly the stakes are high, and the notion that the Obama administration took regulatory shortcuts in pursuit of their preferred policy outcome is deeply troubling."   

    Steve Seidel, Vice President for Policy Analysis at the Pew Center on Global Climate Change analyzed the OIG report and said in a blog post, "So exactly what process fouls did EPA commit and how did they affect the outcome of the report? The IG criticizes EPA for not deeming the technical support document a "highly influential scientific assessment" and for not undertaking the procedural requirements set out in OMB guidance for such a document. Instead of undertaking its own assessment of the climate change literature, EPA determined that it would rely on the existing (and extensively peer reviewed) assessments performed by the U.S. Global Change Research Program, the U.S. National Research Council, and the Intergovernmental Panel on Climate Change. Because its document was essentially a summary of existing assessments, EPA argued that it was not conducting a scientific assessment and therefore was not subject to the process requirements for a "highly influential scientific assessment" in OMB guidance. And OMB agrees.

    "Putting aside the fact that OMB agrees with EPA's call, it is still reasonable to ask what peer review process was used for the document. In preparing the technical support document, EPA organized a panel of 12 federal agency climate experts (including one from EPA) to review the document. The document also underwent extensive interagency and OMB review before being published in the Federal Register for public review in July 2008 as part of the agency's Advance Notice of Proposed Rulemaking. It was revised in response to public comments and reissued for a second round of public comments as part of the proposed endangerment finding in April 2009. The agency held public hearings on its proposed action and prepared 11 volumes of responses to public comments before issuing the final document and endangerment finding in December 2009.

    "The endangerment finding has been challenged in the courts, and they ultimately will decide its fate. Given the extensive body of peer reviewed scientific assessments that formed the basis for the finding and EPA's thorough review process for the finding itself, it is highly unlikely that any such challenges will prevail."

    Access the statement from EPA (click here). Access the statement from Sen. Boxer (click here). Access the statement from Rep. Upton (click here). Access the complete posting from the Pew Center (click here). Access the complete OIG report (click here).  [#Climate, #Air]

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OIG Critical Of Procedures Used In EPA's GHG Endangerment Finding

Sep 28: U.S. EPA's Office of Inspector General (OIG) has issued a 99-page report entitled, Procedural Review of EPA's Greenhouse Gases Endangerment Finding Data Quality Processes (No. 11-P-0702, September 26, 2011). Senator James Inhofe (R-OK), Ranking Member, Senate Committee on Environment and Public Works (EPW), requested that OIG determine whether EPA followed key Federal and Agency regulations and policies in developing and reviewing the technical data used to make and support its greenhouse gases (GHG) endangerment finding.

 

    On December 15, 2009, EPA published its Endangerment and Cause or Contribute Findings for Greenhouse Gases Under Section 202(a) of the Clean Air Act. As the primary scientific basis for EPA's finding, the Agency relied upon assessments conducted by other organizations. EPA summarized the results of these and other scientific assessments in a technical support document (TSD).

 

    In its investigation, OIG found that EPA met statutory requirements for rulemaking and generally followed requirements and guidance related to ensuring the quality of the supporting technical information. Whether EPA's review of its endangerment finding TSD met Office of Management and Budget (OMB) requirements for peer review depends on whether the TSD is considered a "highly influential scientific assessment." OIG indicates, "In our opinion, the TSD was a highly influential scientific assessment because EPA weighed the strength of the available science by its choices of information, data, studies, and conclusions included in and excluded from the TSD." OIG reports that EPA officials did not consider the TSD a highly influential scientific assessment. EPA noted that the TSD consisted only of science that was previously peer reviewed, and that these reviews were deemed adequate under the Agency's policy. EPA had the TSD reviewed by a panel of 12 Federal climate change scientists. OIG indicates, "This review did not meet all OMB requirements for peer review of a highly influential scientific assessment primarily because the review results and EPA's response were not publicly reported, and because 1 of the 12 reviewers was an EPA employee."

    OIG reports that EPA's guidance for assessing data generated by other organizations does not include procedures for conducting such assessments or require EPA to document its assessment. EPA provided statements in its final findings notice and supporting TSD that generally addressed the Agency's assessment factors for evaluating scientific and technical information, and explained its rationale for accepting other organizations' data. However, no supporting documentation was available to show what analyses the Agency conducted prior to disseminating the information. OIG indicates, "Our evaluation examined the data quality procedures EPA used in developing the endangerment finding. We did not assess whether the scientific information and data supported the endangerment finding."

    OIG concludes, "We recommend that EPA (1) revise its Peer Review Handbook to accurately reflect OMB requirements for peer review of highly influential scientific assessments, (2) instruct program offices to state in proposed and final rules whether the action is supported by influential scientific information or a highly influential scientific assessment, and (3) revise its assessment factors guidance to establish minimum review and documentation requirements for assessing and accepting data from other organizations." OIG indicates that EPA stated that its response to the final report will address the recommendations.

    In addition to the report, EPA's Inspector General Arthur A. Elkins, Jr. issued a press statement dated September 28, on the report. In the statement, Elkins said, ""The OIG evaluated EPA's compliance with established policy and procedures in the development of the endangerment finding, including processes for ensuring information quality. We concluded that the technical support document that accompanied EPA's endangerment finding is a highly influential scientific assessment and thus required a more rigorous EPA peer review than occurred. EPA did not certify whether it complied with OMB's or its own peer review policies in either the proposed or final endangerment findings as required. While it may be debatable what impact, if any, this had on EPA's finding, it is clear that EPA did not follow all required steps for a highly influential scientific assessment. We also noted that documentation of events and analyses could be improved.

    "We made no determination regarding the impact that EPA's information quality control systems may have had on the scientific information used to support the finding. We did not test the validity of the scientific or technical information used to support the endangerment finding, nor did we evaluate the merit of EPA's conclusions or analyses. We make recommendations that we think will strengthen EPA's control over data quality processes. EPA disagreed with our conclusions and did not agree to take any corrective actions in response to this report. All the report's recommendations are unresolved."

    Senator Inhofe, who requested the report responded immediately with a release indicating, "I appreciate the Inspector General conducting a thorough investigation into the Obama-EPA's handling of the endangerment finding for greenhouse gases. This report confirms that the endangerment finding, the very foundation of President Obama's job-destroying regulatory agenda, was rushed, biased, and flawed. It calls the scientific integrity of EPA's decision-making process into question and undermines the credibility of the endangerment finding.

    "The Inspector General's investigation uncovered that EPA failed to engage in the required record-keeping process leading up to the endangerment finding decision, and it also did not follow its own peer review procedures to ensure that the science behind the decision was sound. EPA Administrator Lisa Jackson readily admitted in 2009 that EPA had outsourced its scientific review to the United Nations' Intergovernmental Panel on Climate Change. This is an institution whose credibility has already been called into question. Even so, EPA still refused to conduct its own independent review of the science.  As the EPA Inspector General found, whatever one thinks of the UN science, the EPA is still required -- by its own procedures -- to conduct an independent review.

    "The endangerment finding is no small matter: global warming regulations imposed by the Obama-EPA under the Clean Air Act will cost American consumers $300 to $400 billion a year, significantly raise energy prices, and destroy hundreds of thousands of jobs. This is not to mention the 'absurd result' that EPA will need to hire 230,000 additional employees and spend an additional $21 billion to implement its greenhouse gas regime. And all of this economic pain is for nothing: as EPA Administrator Jackson also admitted before the EPW committee, these regulations will have no affect on the climate.  

    "One asks, what happened to Administrator Jackson's vow in 2009 that the Agency would commit to high standards of transparency because ' The success of our environmental efforts depends on earning and maintaining the trust of the public we serve ' or Obama Advisor John Holdren's promise that the Administration would make decisions based on the best possible science because, as the President said, ' The public must be able to trust the science and scientific process informing public policy decisions '?  Given what has come to light in this report, it appears that the Obama EPA cannot be trusted on the most consequential decision the agency has ever made.  

    "I am calling for the Senate Committee on Environment and Public Works, the committee of jurisdiction over the EPA, to hold immediate hearings to address EPA's failure to provide the required documentation and have the science impartially reviewed.  EPA needs to explain to the American people why it blatantly circumvented its own procedures to make what appears to be a predetermined endangerment finding."

    Access the complete report (click here). Access IG's statement (click here). Access a release from Sen. Inhofe (click here). [#Climate, #Air]

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Industry & Enviros At Odds Over Advancement Of Oil & Gas Regs

Sep 27: U.S. EPA is conducting three public hearings on its proposed national air emission standards for oil and natural gas operations to strengthen protections for public health and the environment. The hearings are being held in Pittsburgh, PA beginning today, tomorrow in Denver, CO, and on Thursday in Arlington, TX. The EPA is accepting public comments on the regulations through October 24 and is required to issue final rules by February 28, 2012. The proposal includes four air regulations for the oil and natural gas industry: a new source performance standard for VOCs; a new source performance standard for sulfur dioxide; an air toxics standard for oil and natural gas production; and an air toxics standard for natural gas transmission and storage.

 

    The American Petroleum Institute (API) asked the Agency for additional time to make comments on the proposed rules. API also asked EPA to delay its proposed rule for refinery emissions to allow adequate time for EPA to review emissions data submitted by industrial facilities this month. Howard Feldman, API director of regulatory and scientific affairs said, "We do not oppose rules to help manage upstream emissions, but we are concerned that, unless properly crafted, they could hamper our ability to meet the nation's energy needs. As EPA's proposal stands today, we have questions about whether we're going to get workable, practical rules that do not obstruct development."

    Feldman said that preparing thorough and meaningful comments on all five of EPAs proposals within 60 days is not reasonable or practicable and asked the agency to allow an additional 60 days for public comment. Khary Cauthen, API director of Federal relations said, "The administration was also right to delay the utility emissions rule . . . it would also be a good idea for EPA to delay the proposed refinery emissions rule. The refinery rule is currently scheduled to be proposed just over one month after EPA finishes collecting emissions data from oil and natural gas companies, but more time is needed to review this information." Feldman and Cauthen held a conference call with reporters ahead of EPA's public hearing.

    The Environmental Defense Fund (EDF) said EPA's proposed rule for new national clean air standards for oil and natural gas will reduce harmful air pollution, protect public health and the environment, and prevent the waste of a valuable domestic energy source. EDF said the updated standards are "a critical first step but key areas can be improved" and provided a review and areas for improvement in a preliminary analysis of the regulations. EDF senior scientist Ramon Alvarez, "Updated standards will reduce harmful air pollution through highly cost-effective controls and avoid the needless waste of a valuable domestic energy source: natural gas. They will also standardize many common sense practices and technologies that natural gas companies already use successfully benefit from financially."

    In a release, EDF said, "Oil and natural gas exploration and production are rapidly increasing in urban and rural areas of the country due to technological developments such as 'fracking' that have made extraction of previously untapped unconventional resources feasible. Yet, the clean air standards covering these activities have not been updated since 1985 in one case and 1999 in another. Having inadequate, outdated national standards threatens families and communities who must breathe hazardous air pollutants and airborne contaminants known to seriously impact human health.

    Alvarez said, "The good news is that there are existing, cost-effective solutions at hand. EPA's proposal builds from regulations in place in states such as Colorado and Wyoming. EPA actually worked with oil and gas companies to identify more than 100 technologies and best management practices to recover more product and reduce emissions from upstream activities." Many of these solutions form the basis for EPA's proposed rules.

    EDF indicated that, "Smart standards would ensure that our domestic resources are being used wisely, avoiding the waste of a valuable energy source. Companies that recover more gas get more product they can sell that's worth millions of dollars. The EPA has estimated that the natural gas industry lost more than $1 billion in profits in 2009, due to venting, flaring and so-called 'fugitive emissions' of pollutants released into air from leaks in pressurized equipment, such as well heads, tanks, pipe lines, compressor engine seals, and valves. The return on the initial investment for many of these practices can be a few months to almost always less than two years."

    EDF indicated, "The rules go a long way toward maximizing the multiple benefits that come from using readily available technologies and practices. Yet there is still room for improvement as EDF's analysis points out. The proposal fails to reduce emissions from many existing sources, which means that they will continue to contribute to unhealthy levels of air pollution for years to come. EPA's proposal also declines to reduce methane emissions directly. While reductions in this potent greenhouse gas will occur as a co-benefit of compliance with many of the proposed requirements, additional opportunities to prevent waste of natural gas, primarily comprised of methane, were not included."

    Access complete information on the proposed rules (click here). Access the EPA docket for additional background and to review and submit comments (click here). Access a release from API with links to the testimony and statements from the conference call (click here). Access a release from EDF and link to their preliminary analysis of the regulations (click here). [#Air]

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$624 Million In New Loan Guarantees In Wake Of Solyndra Scandal

Sep 23: Amidst the highly charged political controversy over the Solyndra bankruptcy and its $535 million loan guarantee [See WIMS 9/14/11], U.S. Department of Energy (DOE) Secretary Steven Chu announced three new loan guarantees to support alternative energy projects. The projects in Iowa, Nevada and New Hampshire total nearly $624 million.

 

    DOE finalized a $105 million loan guarantee to support the development of one of the nation's first commercial-scale cellulosic ethanol plants. Project LIBERTY, sponsored by POET, will be built in Emmetsburg, Iowa and is expected to produce up to 25 million gallons of ethanol per year. POET estimates the project will fund approximately 200 construction jobs and 40 permanent jobs. It is expected to generate around $14 million in new revenue to area farmers who will provide the corn crop residue. Chu said, "This project represents a pioneering effort to make broad scale deployment of cellulose ethanol a reality. Producing the next generation of biofuels can not only reduce America's oil dependency, it can also create vast new economic opportunities for rural Americans."

 

     DOE also finalized a partial guarantee for up to a $350 million loan to support a geothermal power generation project sponsored by Ormat Nevada, Inc., which is expected to produce up to 113 megawatts (MW) of clean, baseload power from three geothermal power facilities and will increase geothermal power production in Nevada by nearly 25 percent. The facilities are Jersey Valley in Pershing County, McGinness Hills in Lander County and Tuscarora in Elko County. The company estimates the project will fund 332 jobs during construction and 64 during operations. Chu said, "We are investing in geothermal projects that will further develop the nation's clean energy resources, create skilled jobs for American workers and ensure the U.S. remains a global leader in geothermal energy development. The project announced today will produce virtually no greenhouse gas emissions and will create hundreds of new jobs in Nevada."

 

    DOE also finalized a partial guarantee for $168.9 million loan to Granite Reliable Power, LLC. The loan guarantee will support a 99 megawatt (MW) wind generation project that will be New Hampshire's largest wind farm. The project will be located in Coos County in northern New Hampshire, approximately 110 miles north of Concord and will consist of 33 Vestas V90 3.0-MW wind turbines. Project sponsors, BAIF Granite Holdings, LLC and Freshet Wind Energy, LLC, expect the project will fund nearly 200 construction jobs. Chu said, "Today's investment brings new jobs to New Hampshire and supports the commercial-scale deployment of clean energy technologies in the U.S. America's wind energy resources are abundant, clean and mostly untapped. Continued investments in this source of emissions-free energy will strengthen the economy, create good American jobs and help the nation compete with other countries that are quickly scaling up wind power generation." 

 

    The day before as the Department approved the three new loans, Senator Lisa Murkowski (R-AK), Ranking Member of the Senate Energy and Natural Resources Committee sent a letter to Chu urging him to correct any shortcomings in DOE's loan guarantee program under the 2009 stimulus bill before taxpayers are asked to shoulder additional risk. She indicated that DOE may issue up to $9.2 billion in new loan guarantees under the temporary Section 1705 loan guarantee program in the next week (i.e. before the end of the 2011 Fiscal Year, before October 1). Murkowski wrote, "In these critical days, as the cabinet officer responsible for approving obligations entered into with respect to these transactions, I ask you to do your utmost to avoid the mistakes that appear to have been committed with respect to Solyndra LLC, the first-ever recipient of a DOE loan guarantee. Although I believe there is value in DOE's loan program, the circumstances surrounding Solyndra's bankruptcy filing have raised questions about the program as a whole."

 

    On the same day as the Department approved the loans, the two top executives for now-bankrupt Solyndra solar project in California, invoked their Fifth Amendment rights against self-incrimination and refused to answer any questions from the House Energy and Commerce Committee, Subcommittee on Oversight and Investigations. Despite earlier pledges that they would voluntarily testify, Solyndra CEO Brian Harrison and CFO W.G. Stover both pleaded the Fifth Amendment and declined to answer any of the Subcommittee's questions. Full Committee Chairman Fred Upton (R-MI) addressed Harrison and Stover at the hearing and said, "It is a very sad commentary that we met resistance every step of the way of seeking answers to basic questions overseeing the 'approval process' of this project. We had to finally resort to a subpoena and now the outright resistance of getting answers that both of you assured us, only last week, that you'd provide. Let me just warn you and the other folks involved in this taxpayer rip-off. We're not done. No we're not."

 

    Meanwhile, Representative Ed Markey (D-MA), Ranking Member of the Natural Resources Committee and a senior member of the Energy and Commerce Committee, called on Chairmen Fred Upton and Cliff Stearns (R-FL) "to hold hearings on the implementation of the nuclear power plant loan guarantee program, the issuance of the conditional nuclear loan guarantee that has been awarded, and the role the nuclear industry has had in altering the terms associated with subordination." He pointed out that DOE has awarded an $8.3 billion conditional loan guarantee to Georgia Power Company to build 2 new nuclear reactors. Rep. Markey said, "There are many legitimate public policy considerations that Congress should explore regarding the full suite of the Department's loan guarantee programs. We should subject the nuclear loan guarantee program to the same level of rigorous scrutiny as we are now insisting the solar loan guarantee program undergo."  

 

    Access a DOE release on Project LIBERTY (click here). Access the POET website for more information (click here). Access a DOE release on Ormat Nevada projects (click here). Access the Ormat website for more information (click here). Access a DOE release on Granite wind project (click here). Access the Granite Reliable Power, LLC website for more information (click here). Access the release and letter from Senator Murkowski (click here). Access the release from Rep. Upton (click here). Access the release and letter from Rep. Markey (click here). [#Energy/Green, #Energy/Nuclear]

 

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Full House GOP Approves TRAIN Act & Amendments

Sep 23: As expected, despite strong opposition from House Democrats [See WIMS 9/21/11] and an Office of Management and Budget (OMB) "Statement of Administration Policy" opposing and recommending a veto of H.R. 2401 -- the Transparency in Regulatory Analysis of Impacts on the Nation Act of 2011 (i.e. the TRAIN Act), the U.S. House of Representatives approved the bill by a vote of 249 to 169 -- 230 Republicans and 19 Democrats voted for the bill; and 165 Democrats and 4 Republicans voted against it. The Latta amendment was agreed to by recorded vote of  227-192; and the Whitfield amendment was agreed to by recorded vote of 234-188.

 

    Republicans said the bill would "protect jobs and provide certainty to America's job creators"; while Democrats said the bill and amendments would "gut" the Clean Air Act. Representative Waxman said, "The Whitfield amendment will eviscerate the law's ability to require power plants to install modern pollution controls. The Latta amendment will reverse 40 years of clean air policy, allowing our national goals for clean air to be determined by corporate profits -- not public health."

 

    The bill passed with an amendment offered by Energy and Power Subcommittee Chairman Ed Whitfield (R-KY) relating to two costly new rules affecting our nation's power sector -- the Utility MACT rule and the Cross-State Air Pollution Rule (CSAPR). EPA will be required to continue the current Clean Air Interstate program to achieve further emissions reductions, and to re-propose the Utility MACT rule to ensure it is achievable in the real world. Republicans said the amendment "provides much-needed regulatory relief to America's power sector and will ensure American families can keep the lights on. These two rules have been estimated to cost $17.8 billion annually and 1.4 million job-years by 2020."

   

    The TRAIN Act, introduced by Representatives John Sullivan (R-OK) and Jim Matheson (D-UT), requires an interagency committee to analyze the cumulative economic impacts of certain EPA rules to better understand how these regulations affect jobs, energy prices, electric reliability and America's overall global competitiveness.

    Representative Sullivan said, "As House Republicans move forward with a bold agenda to grow our economy and put Americans back to work, one issue that must be addressed is overregulation by the federal government. I strongly believe the Obama Administration is moving too fast and showing little regard for the economic consequences of their energy and environmental policies. I introduced this bipartisan legislation to protect American jobs—jobs that we are in danger of losing due to the Obama Administration's environmental regulatory agenda. The Train Act will force the EPA and other federal agencies to conduct an in-depth economic analysis of the rules and regulations so Congress and the American people can understand how the EPA's regulatory train wreck will impact our economy."

    The bill had strong support from the business community. In a September 22, letter to Representative Fred Upton (R-MI) Chairman, Energy and Commerce Committee, former Michigan Governor John Engler and now President of BRT said his organization strongly supported H.R. 2401 and urged "swift House passage of this important legislation." Engler said, "The TRAIN Act would require an interagency analysis of the cumulative and incremental impacts of certain rules either pending or that recently have been finalized by the Environmental Protection Agency (EPA). Pending completion of this analysis, the legislation also would stay the effectiveness of certain of the covered rules until at least six months after the day on which the interagency committee analysis has been finalized and transmitted to the Congress."  He concluded, "The TRAIN Act directly addresses this issue with respect to certain EPA regulations in a thoughtful and creative way. We strongly support this legislation." Business Roundtable (BRT) is an association of chief executive officers of leading U.S. companies with over $6 trillion in annual revenues and more than 14 million employees.

   The OMB statement of opposition issued on September 21 indicates, "H.R. 2401 would undermine this progress by blocking EPA's ability to move forward with two long overdue CAA rules -- the Mercury and Air Toxics Standard and the Cross-State Air Pollution Rule. . . EPA estimates that these two rules alone will yield hundreds of billions of dollars in net benefits each year. H.R. 2401 would block these rules and indefinitely delay these public health and economic benefits. . ."   

    Representative Ed Markey (D-MA), Ranking Member of the House Committee on Natural Resources delivered a lengthy Floor statement on the bill saying in part, "This Republican led House has initiated a full throttle 'repeal-a-thon' that denies science, delays regulations, and deters efforts to protect the health and security of millions of Americans. We keep hearing from Republicans about how EPA's clean air standards to reduce mercury, lead, dioxins and other pollutants need to be economically analyzed and re-analyzed. They insist that even if a standard for one toxic chemical was met by an entire industrial sector, the removal of just one more poisonous chemical would cause a domino effect of problems for industry, from loss of domestic manufacturing capacity to job loss to loss of electric reliability.

    "And the solution to these supposed problems? It's a time tested Republican tradition. First, pass legislation that repeals regulations that have already been set. Second, require endless study of the cumulative impacts of all regulations on all industries. And finally, just for good measure, pass an amendment that guts the very underpinnings of the Clean Air Act. Make no mistake, that is what we are doing here today. . ."

    Fred Krupp, Environmental Defense Fund (EDF) President issued a statement saying, "Today the U.S. House of Representatives made a stark choice, and put pollution over children's health. The TRAIN Act, if it becomes law, will result in more than 25,000 premature deaths in the first year alone, due to smog, soot, and toxic air pollution. There will be more than 175,000 more asthma attacks, many of them in children. This was no less than a fight about the integrity of the Clean Air Act, and clean air lost. Opponents of these common sense rules make the patently false argument that we can't have both clean air and a strong economy. Actually, analysis has shown that the economic benefits of enforcing the Clean Air Act outweigh the costs 30 to 1. . ."

    Franz Matzner, climate and legislative director for the Natural Resources Defense Council (NRDC) said, "The House effectively tied the health of our children and all Americans to the tracks and plowed right over us today. By blocking clean air provisions that have been in the works for years, the TRAIN Act derails protections that studies show would prevent tens of thousands of deaths and hospital visits and millions of lost work and school days. . . "Next in the GOP's crosshairs are protections that would limit the toxic pollution from cement plants and other industrial polluters. . ."

    Access a release from House Republicans on the passage of the bill (click here). Access the Floor statement from Rep. Sullivan's (click here) Access details of the roll call vote (click here). Access the support letter from BRT (click here). Access the OMB Statement of Administration Policy (click here). Access the statement from Rep. Waxman (click here). Access the Floor statement from Rep. Markey (click here). Access the statement from EDF (click here). Access the statement from NRDC (click here). Access legislative details for H.R. 2401 (click here). [#Air]

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House Rejects CR To Keep Government Running Past Sept. 30

Sep 21: In a surprise to the House leadership, the House refused to pass the continuing appropriations resolution (CR) to keep the Federal government operating until November 18, 2011. For procedural reasons, the CR was included as an amendment to the Senate amendment to H.R. 2608 to speed passage through the Senate. In substance, it is the same as the Continuing Resolution, H.J. Res. 79, introduced by Representative Hal Rogers (R-KY), Chairman of the House Appropriations Committee, on September 14. Rep. Rogers said the bill would give Congress the time needed to complete Fiscal Year 2012. The Republican Continuing Resolution failed to pass the House by a vote of 195 to 230. If the CR fails to pass by the end of the month, the government would be forced to shut down. The CR would have continued government operations at a rate of $1.043 trillion -- the total amount agreed to by the Congress and the White House in the Budget Control Act.

 

    The controversial portion of the bill relates to how disaster assistance is funded. In a Floor statement, Chairman Rogers explained, ". . . this CR will help meet the needs of the thousands of families, businesses and communities burdened by recent natural disasters. By providing an immediate $1 billion in emergency 2011 funding now, as well as an additional $2.65 billion for the next year, we are helping our citizens get back on their feet. The $776 million in this bill for the FEMA Disaster Relief Fund – which is $276 million more than the President or the Senate proposed -- is time-sensitive and critical. The DRF is now below $250 million, and is running out of money fast. Unless we provide additional funding within a matter of days, the DRF will soon be empty, leaving millions of people in the lurch.

    "The $1 billion in emergency funding for fiscal year 2011 has been offset by a cut to the Department of Energy's Advanced Technology Vehicle Manufacturing Loan Program, which has more than $4 billion in unspent funds in the pipeline. Now is the time to use these idle dollars for true and immediate purposes -- aiding our fellow citizens in their times of greatest needs as they cope with the aftermath of wildfires, tornados, earthquakes and hurricanes.

    "Now, the notion of offsetting emergency spending has gotten a lot of attention as of late. Let me be VERY clear: Offsetting emergency spending is not a unique practice. In fact, over the last ten years, this body has used offsets in at least 15 of 30 emergency supplemental spending bills. In total, Congress has passed over $60 billion in emergency offsets since 2001 -- most of which had large support on both sides of the aisle, including the support of our former Speaker Pelosi.

    "The loan program used as an offset in this bill has had excess funds for years, and taking the money will not negatively affect the program. All entities in final loan stages will still get the funding they've worked for. Furthermore, this offset is identical to the one already passed by the House in June as part of the Homeland Security Appropriations Bill.

    "In addition, the Committee will continue to consider additional disaster funding over the next few weeks as we bring the fiscal year 2012 Appropriations process to a close – including reviewing estimates that are still coming in from recent disasters – so that families and communities can get the assistance they need while making sure that every dollar is well-spent. The Budget Control Act – which both houses in Congress and the White House agreed to – provides for 2012 disaster funding in this capacity.

    "But with respect to this Continuing Resolution, at this time, we do not have all the necessary information on the cost of recent disasters, nor the time to work out a final, comprehensive agreement with the White House and the Senate. Therefore, we must meet the most immediate need and provide additional funding now for FEMA to keep the program going for the next several months. That is what this Continuing Resolution does and why we -- the House and Senate -- must pass this bill immediately. . ."

    House Democratic Leader Nancy Pelosi (D-CA) issued a statement after the vote saying, "the bill sets a dangerous precedent by offsetting the cost of critical disaster assistance for states and communities hard hit by recent natural disasters by ending the Advanced Technology Vehicle Manufacturing loan program -- an initiative that puts people to work producing cleaner cars and investing in innovation." In a release she said, "Instead of creating jobs, the number one priority of the American people, this Republican bill would have cost good-paying jobs; that is why Democrats rejected it tonight. House Democrats will work tirelessly to create jobs, and Democrats will always provide Americans struggling in the aftermath of a disaster what they need to rebuild. The rejection of this bill that destroys jobs was bipartisan. The House Republican leadership should now bring to the floor a clean CR and the bipartisan relief package already passed by the Senate."

 

    The bill met with stiff opposition from most Democrats and 48 Republicans. Rep. Pelosi said in a Floor speech, ""All of the disasters that are happening at once -- we don't know when the next one will come -- but what is frightening also is that we don't know where this Majority wants to go to pay for it. I have serious objection to the payfor in this legislation. I have a bigger objection that we would have to pay for disaster. We never paid for the tax cuts for the rich. They never were paid for. We never paid for the wars in Afghanistan and Iraq. They were never paid for. But all of a sudden we have to pay, to try to make whole these people who have been affected, who've lost everything. . ."

 

    In another Floor statement, Appropriations Committee Ranking Member Norman Dicks (D-WA) explained the importance of the Advanced Technology Vehicle Manufacturing Loan Program saying, "The Advanced Technology Vehicle Manufacturing Program was started in 2008 to reinvigorate American manufacturing. To date, the program has awarded $7.5 billion of credit subsidy to promote energy efficient advanced vehicles and their component parts. The Department of Energy estimates the loan guarantees have created or maintained 39,000 jobs in California, Delaware, Illinois, Indiana, Kentucky, Ohio, Michigan, Missouri, and Tennessee.

 

    "Some have suggested that this program has been slow to spend emergency funding provided in the FY 2009 CR. I say the loan review process is -- and ought to be -- strenuous. One company originally applied under a different loan program in 2006 and received an Advanced Technology Vehicle Manufacturing loan in 2010; it required four years of due diligence and review to qualify for the loan. By taking away ATVM funding because the program spent time to do due diligence, Republicans seem to be issuing an ultimatum to all loan programs: expedite the review process or see your funding transferred away.

 

    "By the way, the company in question employed about 400 workers before receiving the loan. Today, they have 1,400 employees in the fields of engineering research and development, design, manufacturing, assembly, maintenance and service, sales, and support. The ATVM program has an additional 18 loan applications in progress that are projected to create 50 - 60,000 more jobs in California, Florida, Illinois, Indiana, Louisiana, Michigan, Missouri, and Ohio. One pending application would support investments at 11 plants in Illinois, Indiana, Michigan and Ohio. The company employs over 56,000 workers, having added nearly 9,000 new workers since 2009. Some of these jobs will be at risk by using this offset. This is not the time to put American manufacturing jobs at risk."

 

    Access the Floor statement from Chairman Rogers (click here). Access a release from Rep. Pelosi (click here). Access Rep. Pelosi's complete Floor statement (click here). Access Rep. Dicks complete Floor statement (click here). Access legislative details for H.R.2608 (click here). [#All]

 

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White House Statement Of Administration Policy Against TRAIN Act
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Public Environmental Concern Drops As Economic Worries Rise

Dems Strongly Oppose New TRAIN Act Amendments

Sep 20: House Energy and Commerce Committee Ranking Member Henry Waxman (D-CA) and Energy and Power Subcommittee Ranking Member Bobby Rush (D-IL) sent a letter to Energy and Commerce Committee Chairman Fred Upton (R-MI) and Energy and Power Subcommittee Chairman Ed Whitfield (R-KY) strenuously objecting to an amendment to the TRAIN Act [H.R. 2401, the Transparency in Regulatory Analysis of Impacts on the Nation Act (TRAIN Act) See WIMS 7/13/11] which they say "would make radical changes in Clean Air Act provisions. The amendment, sponsored by Representative Whitfield, was never considered in the Committee's hearing or markup process and would result in dramatic increases in toxic and other deadly air pollution." The Committee passed the bill on July 13, with a 33-13 vote; and it was subsequently reported on September 15. The bill is scheduled to be considered on the House Floor on Friday, September 23.

 

    In their letter the two minority members say, "During Committee consideration of TRAIN, Chairman Whitfield offered an amendment that fundamentally changed the bill. The legislation started as a requirement that a newly created government commission evaluate the cumulative impacts of EPA regulations. The Whitfield amendment turned this study bill into a substantive bill by indefinitely delaying two major Clean Air Act regulations, the utility MACT rule, which reduces mercury and other toxic emissions from power plants, and the cross-state air pollution rule, which reduces sulfur dioxide and nitrogen oxide emissions from power plants that cross state boundaries and harm downwind communities' efforts to achieve healthy air quality.

    "We objected to Chairman Whitfield's amendment on both procedural and substantive grounds. On process, the substantive changes made by the amendment had not been subject to Committee consideration and were circulated to members less than a day before the markup, allowing no time for deliberate consideration. Chairman Whitfield's floor amendment is an even more egregious abuse of process. It makes radical changes in the Clean Air Act provisions that address toxic air emissions.  These changes have never been considered in hearings or debated in Committee. Members are being asked to vote on major changes to the Clean Air Act without any idea what they would do. . .

    "The provisions in section 112 of the Clean Air Act that control toxic emissions have been an enormous success since they were enacted in 1990.  EPA's regulations under these provisions have required most major sources of air toxics to reduce their emissions, cutting releases of these dangerous chemicals by 1.7 million tons per year.  To cite one example, EPA's actions have resulted in outdoor air concentrations of benzene, a carcinogen, dropping by over 50% since 1994. 

    "Chairman Whitfield's amendment fundamentally alters these provisions as applied to power plants by replacing them with a new approach that appears to be unworkable.  Current law requires EPA to set a standard for each regulated pollutant that is no less stringent than the actual emissions levels achieved on average for the best-performing 12%  of sources. This approach is data-driven and effective. It has been used to set standards for roughly 100 discrete categories of sources over the past two decades. The new language in Chairman Whitfield's amendment would require EPA to identify the 12% of sources in a source category that are best-performing "in the aggregate" for all toxic pollutants. . .  The Whitfield amendment makes other changes to the legislation that have not been considered by the Committee. It nullifies, rather than delays, two major air regulations, one finalized and one proposed, requiring EPA to start over on both. It significantly extends the bill's minimum time periods during which the rules may not be enforced from 15 months to seven years (for the mercury air toxics rule) and eight years (for the cross-state air pollution rule). It prohibits EPA from implementing any new rule under one section of the Act (section 110(a)(2)(D)) to address transported air pollution for at least eight years and bars any such rule under another section (section 126) for at least five years. It also requires EPA to allow unrestricted trading under any such program that is ultimately adopted regardless of whether downwind states actually experience the pollution reductions that are the purpose of such rule. 

    "The Committee has held no hearings on the cross-state air pollution rule or the issue of transported emissions. The Committee held one hearing on three air toxics rules, including the utility MACT rule, but that hearing did not address the fundamental changes included in the amendment. No legislative hearing was held on any of this language. This approach to legislating conflicts with our Committee's proud history of working together to address serious air pollution problems, and it makes a mockery of the Committee hearing process."

    Access a release and the letter from the Democratic members (click here). Access legislative details for H.R. 2401 (click here). [#Air]

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EIA Releases International Energy Outlook 2011 (IEO2011)

Sep 19: The U.S. Energy Information Administration (EIA) released its 301-page International Energy Outlook 2011 (IEO2011) which  presents updated projections for world energy markets through 2035. The IEO2011 Reference case projection does not incorporate prospective legislation or policies that might affect energy markets. According to the analysis world marketed energy consumption grows by 53 percent from 2008 to 2035. Total world energy use rises from 505 quadrillion British thermal units (Btu) in 2008 to 619 quadrillion Btu in 2020 and 770 quadrillion Btu in 2035. Much of the growth in energy consumption occurs in countries outside the Organization for Economic Cooperation and Development (non-OECD nations) where demand is driven by strong long-term economic growth. Energy use in non-OECD nations increases by 85 percent in the Reference case, as compared with an increase of 18 percent for the OECD economies.

    Strong economic growth leads China and India to more than double their combined energy demand by 2035, accounting for one-half of the world's energy growth according to EIA's recently released International Energy Outlook 2011 (IEO2011). The IEO2011 projects that China and India together will consume 31% of the world's energy in 2035, up from 21% in 2008. China, which surpassed the United States as the world's largest energy consumer in 2009, is the predominant driver of growing energy demand. By 2035, China's projected energy consumption is 68% higher than U.S. energy consumption. Global energy consumption grows 53% between 2008 and 2035, representing an average annual growth rate of 1.6%.

    Energy growth varies greatly between developed and developing countries. Energy demand in Organization for Economic Cooperation and Development (OECD) and non-OECD nations, which was nearly the same in 2007, diverges sharply in the projection as non-OECD growth further accelerates, averaging 2.3% per year compared to only 0.6% per year for OECD nations. At this rate, non-OECD nations account for 83% of global growth and consume 67% more energy than OECD nations by 2035, although their energy consumption is still far lower on a per capita basis. Additional IEO2011 highlights include:

• Renewable energy is projected to be the fastest growing source of primary energy over the next 25 years, but fossil fuels remain the dominant source of energy. Renewable energy consumption increases by 2.8 percent per year and the renewable share of total energy use increases from 10 percent in 2008 to 15 percent in 2035 in the Reference case. Fossil fuels, however, continue to supply much of the energy used worldwide throughout the projection, and still account for 78 percent of world energy use in 2035 While the Reference case projections reflect current laws and policies as of the start of 2011, past experience suggests that renewable energy deployment is often significantly affected by policy changes.
• World oil prices remain high in the IEO2011 Reference case, but oil consumption continues to grow; both conventional and unconventional liquid supplies are used to meet rising demand. In the IEO2011 Reference case the price of light sweet crude oil (in real 2009 dollars) remains high, reaching $125 per barrel in 2035. Total world petroleum and other liquids fuel use increases by 26.9 million barrels per day between 2008 and 2035, but the growth in conventional crude oil production is less than half this amount at 11.5 million barrels per day, while production of natural gas plant liquids increase by 5.1 million barrels per day, World production of unconventional resources (including biofuels, oil sands, extra-heavy oil, coal-to-liquids, and gas-to-liquids), which totaled 3.9 million barrels per day in 2008, increases to 13.1 million barrels per day in 2035.
• Natural gas has the fastest growth rate among the fossil fuels over the 2008 to 2035 projection period. World natural gas consumption increases 1.6 percent per year, from 111 trillion cubic feet in 2008 to 169 trillion cubic feet in 2035. Unconventional natural gas (tight gas, shale gas, and coalbed methane) supplies increase substantially in the IEO2011 Reference case -- especially from the United States, but also from Canada and China.

    Other report highlights include:

• From 2008 to 2035, total world energy consumption rises by an average annual 1.6 percent in the IEO2011 Reference case. Strong economic growth among the non-OECD (Organization for Economic Cooperation and Development) nations drives the increase. Non-OECD energy use increases by 2.3 percent per year; in the OECD countries energy use grows by only 0.6 percent per year.
• Petroleum and other liquid fuels remain the largest energy source worldwide through 2035, though projected higher oil prices erode their share of total energy use from 34 percent in 2008 to 29 percent in 2035.
• Projected petroleum consumption and prices are very sensitive to both supply and demand conditions. Higher economic growth in developing countries coupled with reduced supply from key exporting countries result in a High Oil Price case in which real oil prices exceed $169 per barrel by 2020 and approach $200 per barrel by 2035. Conversely, lower economic growth in developing countries coupled with increased supplies from key exporting countries result in a Low Oil Price case in which real oil prices fall to about $55 per barrel in 2015 and then gradually decline to $50 per barrel after 2030 where they remain through 2035.
• World coal consumption increases from 139 quadrillion Btu in 2008 to 209 quadrillion Btu in 2035, at an average annual rate of 1.5 percent in the IEO2011 Reference case. In the absence of policies or legislation that would limit the growth of coal use, China and, to a lesser extent, India and the other nations of non-OECD Asia consume coal in place of more expensive fuels. China alone accounts for 76 percent of the projected net increase in world coal use, and India and the rest of non-OECD Asia account for another 19 percent of the increase.
• Electricity is the world's fastest-growing form of end-use energy consumption in the Reference case, as it has been for the past several decades. Net electricity generation worldwide rises by 2.3 percent per year on average from 2008 to 2035. Renewables are the fastest growing source of new electricity generation, increasing by 3.0 percent and outpacing the average annual increases for natural gas (2.6 percent), nuclear power (2.4 percent), and coal (1.9 percent).
• The transportation sector accounted for 27 percent of total world delivered energy consumption in 2008, and transportation energy use increases by 1.4 percent per year from 2008 to 2035. The transportation share of world total liquids consumption increases from 54 percent in 2008 to 60 percent in 2035 in the IEO2011 Reference case, accounting for 82 percent of the total increase in world liquids consumption
• In the IEO2011 Reference case, energy-related carbon dioxide emissions rise from 30.2 billion metric tons in 2008 to 43.2 billion metric tons in 2035 -- an increase of 43 percent. Much of the increase in carbon dioxide emissions is projected to occur among the developing nations of the world, especially in Asia.

    Access a release from EIA (click here). Access the complete 301-page report (click here). Access an overview with links to 10 separate presentations and more information (click here). Access a summary of the China-India projections (click here). [#Energy]

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The President's Plan For Economic Growth & Deficit Reduction

Sep 19: In follow-up to President Obama's $447 billion American Jobs Act (AJA) announced on September 8 [See WIMS 9/9/11], today he released his 80-page Plan for Economic Growth and Deficit Reduction. According to a summary released by the White House, "The health of our economy depends on what we do right now to create the conditions where businesses can hire and middle-class families can feel a basic measure of economic security. In the long run, our prosperity also depends on our ability to pay down the massive debt the federal government has accumulated over the past decade." As promised when he announced the AJA, the President said his initiatives would be "fully paid for" via additional deficit reductions which he will detail in a submission to the Joint Select Committee on Deficit Reduction (Supercommittee) within the next 10 days. The President sent his Plan to the Joint Committee "to jumpstart economic growth and job creation now – and to lay the foundation for it continue for years to come."

    In announcing his Plan the President said, "You know, last week, Speaker of the House John Boehner gave a speech about the economy [See WIMS 9/15/11].  And to his credit, he made the point that we can't afford the kind of politics that says it's "my way or the highway." I was encouraged by that. Here's the problem: In that same speech, he also came out against any plan to cut the deficit that includes any additional revenues whatsoever. He said -- I'm quoting him -- there is 'only one option.'  And that option and only option relies entirely on cuts. That means slashing education, surrendering the research necessary to keep America's technological edge in the 21st century, and allowing our critical public assets like highways and bridges and airports to get worse.  It would cripple our competiveness and our ability to win the jobs of the future. And it would also mean asking sacrifice of seniors and the middle class and the poor, while asking nothing of the wealthiest Americans and biggest corporations. So the Speaker says we can't have it 'my way or the highway,' and then basically says, my way -- or the highway. That's not smart. It's not right.  If we're going to meet our responsibilities, we have to do it together."

    The President continued, "This is not class warfare.  It's math. The money is going to have to come from someplace.  And if we're not willing to ask those who've done extraordinarily well to help America close the deficit and we are trying to reach that same target of $4 trillion, then the logic, the math says everybody else has to do a whole lot more:  We've got to put the entire burden on the middle class and the poor. We've got to scale back on the investments that have always helped our economy grow.  We've got to settle for second-rate roads and second-rate bridges and second-rate airports, and schools that are crumbling. That's unacceptable to me. That's unacceptable to the American people. And it will not happen on my watch.  I will not support -- I will not support -- any plan that puts all the burden for closing our deficit on ordinary Americans.  And I will veto any bill that changes benefits for those who rely on Medicare but does not raise serious revenues by asking the wealthiest Americans or biggest corporations to pay their fair share. We are not going to have a one-sided deal that hurts the folks who are most vulnerable. . ."

    According to the summary, "The President's Plan for Economic Growth and Deficit Reduction lives up to a simple idea: as a Nation, we can live within our means while still making the investments we need to prosper -- from a jobs bill that is needed right now to long-term investments in education, innovation, and infrastructure. It follows a balanced approach: asking everyone to do their part, so no one has to bear all the burden. And it says that everyone -- including millionaires and billionaires -- has to pay their fair share. Overall, it pays for the President's jobs bill and produces net savings of more than $3 trillion over the next decade, on top of the roughly $1 trillion in spending cuts that the President already signed into law in the Budget Control Act -- for a total savings of more than $4 trillion over the next decade. This would bring the country to a place, by 2017, where current spending is no longer adding to our debt, debt is falling as a share of the economy, and deficits are at a sustainable level."

    In summary form the President's Plan proposes to produce approximately $4.4 trillion in deficit reduction net the cost of the American Jobs Act.

• $1.2 trillion from the discretionary cuts enacted in the Budget Control Act.
• $580 billion in cuts and reforms to a wide range of mandatory programs;
• $1.1 trillion from the drawdown of troops in Afghanistan and transition from a military to a civilian-led mission in Iraq
• $1.5 trillion from tax reform
• $430 billion in additional interest savings

    To spur economic growth and job creation, the plan includes one-time investment and relief in the American Jobs Act.  That adds to the deficit in 2012 but is fully paid for over 10 years, and deficit reduction phases in starting in 2013, as the economy grows stronger. Deficit reduction is achieved in a balanced approach, with a spending cut to revenue ratio for the entire plan (including discretionary cuts) of 2 to 1.  

 

    On the revenue side of the President's proposal he calls for the Joint Committee to undertake comprehensive tax reform, and lays out five principles for it to follow: 1) lower tax rates; 2) cut wasteful loopholes and tax breaks; 3) reduce the deficit by $1.5 trillion; 4) boost job creation and growth; and 5) comport with the "Buffett Rule" that people making more than $1 million a year should not pay a smaller share of their income in taxes than middle-class families pay.

 

    The tax reform should draw on the specific proposals the President has put forward, together with elimination of additional inefficient tax breaks. If the Joint Committee is unable to undertake comprehensive tax reform, the President indicated he believes the discrete measures he has proposed should be enacted on a standalone basis. "Their enactment as a standalone package still would significantly improve the country's fiscal standing, represent an important step toward more fundamentally transforming our tax code, and serve as a strong foundation for economic growth and job creation." 

 

    To advance the debate, the President is offering a detailed set of specific tax loophole closers and measures to broaden the tax base that, together with the expiration of the high-income tax cuts, would be more than sufficient to hit the $1.5 trillion target. These include: Allowing the 2001 and 2003 tax cuts for upper income earners to expire ($866 billion); Limiting deductions and exclusions for those making more than $250,000 a year ($410 billion); and Closing loopholes and eliminating special interest tax breaks (approximately $300 billion).

 

    House Speaker John Boehner (R-OH) reacted immediately with a statement in response to the President's debt plan saying, "Pitting one group of Americans against another is not leadership. The Joint Select Committee is engaged in serious work to tackle a serious problem: the debt crisis that is making it harder to get our economy growing and create more American jobs.  Unfortunately, the President has not made a serious contribution to its work today. This administration's insistence on raising taxes on job creators and its reluctance to take the steps necessary to strengthen our entitlement programs are the reasons the president and I were not able to reach an agreement previously, and it is evident today that these barriers remain."

    Speaker Boehner included a note saying, "The President's proposal would raise taxes on both small businesses and on private capital, which is the essential ingredient for job creation in our economy. By declining to support structural improvements to strengthen our entitlement programs, the President has chosen to ignore the warnings about our debt crisis sent by the markets in August – leaving Americans exposed to the possibility of further downgrades that will further damage confidence and make it harder for our economy to grow and create jobs."

    Senate Minority Leader Mitch McConnell (R-KY) also issued an immediate response saying, "Veto threats, a massive tax hike, phantom savings, and punting on entitlement reform is not a recipe for economic or job growth -- or even meaningful deficit reduction. The good news is that the Joint Committee is taking this issue far more seriously than the White House."

    Senator McConnell appeared on Meet the Press Sunday and commented on the President's $447 billion AJA proposal and said, in part, "Right now, we've got -- we've thrown a big, wet blanket over the private sector economy. We've borrowed too much. We've spent too much. We're dramatically overregulating every aspect of the private sector in our country and now we're threatening to raise taxes on top of it. That's not going to get the economy moving. . . I mean, if you look at the stimulus bill, David, what did we get out of that? Turtle tunnels and Solyndra. Solyndra. Look, more money was lost on Solyndra than came to my state to fix roads and bridges out of the entire stimulus package last year. And now he's asking us to do it again. One of my favorite sayings here in Kentucky, out in the rural areas, is there's no education in the second kick of a mule. I mean, we've been there. We've done that. Now he's asking us to do it again. I'm trying to get him to go in a different direction."

     American Petroleum Institute (API) President and CEO Jack Gerard issued a statement saying, "President Obama's call for higher taxes on the U.S. oil and natural gas industry would undercut efforts to create jobs." He said, "The president's plan to raise taxes would destroy jobs and drive investment out of the United States. It's ironic that in his search for revenues, the president overlooks the revenues available from increased access to domestic oil and natural gas. Rather than raising taxes on a single industry, he could raise revenues, create jobs and strengthen our energy security. With one stroke of his pen, the president could allow the oil and natural gas industry to create a million new American jobs in just the next seven years.  This could also generate $127 billion in new revenue to the government. . ."

    John Engler, president of Business Roundtable (BRT) issued a statement saying, "With the current, anemic economic conditions, the unemployment rate will remain consistently high and tax receipts will remain low unless the focus shifts to long-term policies and economic growth. The uncertainty created by the threat of even higher taxes helps neither job creation nor growth. . . We remain convinced that a lower corporate rate and a competitive territorial system are essential elements of successful economic growth strategy."

    Access a fact sheet overview of the President's Plan (click here). Access a summary with links from Jack Lew is Director of the Office of Management and Budget (click here). Access the complete 80-page Plan (click here). Access the statement from Speaker Boehner (click here). Access Senator McConnell's statement (click here); and Meet the Press excerpts (click here). Access the statement from API (click here). Access the statement from BRT (click here). [#All]