Moderate Democratic Senators Will Shape Climate Legislation

Aug 7: Senator Evan Bayh (D-IN) and nine of his Senate Democratic colleagues wrote to President Barack Obama on Thursday (August 6) to outline the need to maintain a level playing field for American manufacturing in any climate change legislation to come before the Senate in the fall. The Senators expressed their support for a border adjustment mechanism and other initiatives that would ensure the future competiveness of U.S. manufacturing. The letter was signed by Bayh and Senators Sherrod Brown (D-OH), Debbie Stabenow (D-MI), Russell D. Feingold (D-WI), Carl Levin (D-MI), Robert P. Casey (D-PA), Robert C. Byrd (D-WV), Arlen Specter (D-PA), John D. Rockefeller IV (D-WV), and Al Franken (D-MN).

As WIMS has previously noted on Mar 18, 2009, a group of 15 Senators -- 14 "moderate" Democrats and Joe Lieberman (I-CT) announced they were forming a coalition to help shape public policy that will have a major impact on pending proposals for environmental, energy and climate change legislation [See WIMS 3/19/09]. The original Group of 15, including some strong supporters of President Obama lead by Bayh of Indiana, Tom Carper (D-DE) and Blanche Lincoln (D-AR); and also included Mark Udall (D-CO); Michael Bennet (D-CO), Mark Begich (D-AK); Kay Hagan (D-NC); Herb Kohl (D-WI); Mary Landrieu (D-LA); Joe Lieberman (I-CT), Claire McCaskill (D-MO); Ben Nelson (D-NE); Bill Nelson (D-FL); Jeanne Shaheen (D-NH); and Mark Warner (D-VA). Comparing the original group of 15, with the new coalition of 10 Senators, it now appears that the "moderate" group has become much larger and will have an even greater influence on any energy and climate change legislation.

In the August 6 letter the senators wrote, “As Congress considers energy and climate legislation, it is important that such a bill include provisions to maintain a level playing field for American manufacturing. We must not engage in a self-defeating effort that displaces greenhouse gas emissions rather than reducing them and displaces U.S. jobs rather than bolstering them. Domestic manufacturers and the workers they employ can and must play a vital role in our nation’s clean energy future.”

The Senators also outlined initiatives to ensure manufacturers are not disproportionately affected by climate change legislation. They said, “Any climate change legislation must prevent the export of jobs and related greenhouse gas emissions to countries that fail to take actions to combat the threat of global warming comparable to those taken by the United States. It is essential that climate change legislation include a border mechanism, sufficient allowances to energy intensive industries and other effective measures that encourage international agreements and maintain a level playing field for American manufacturers.”

Access a release from Senator Bayh (click here). Access the Aug. 6 letter from the Senators (click here). Access a revealing March 2009 "Hardball" interview with Senator Evan Bayh (click here).

$2 Billion Clunkers Funding Approved; Only 6 GOP Votes

Aug 6: Although the Car Allowance Rebate Systems (CARS) or “Cash for Clunkers” program has been overwhelmingly popular with consumers, it was able to secure additional funding with the help of just six Senate Republicans [See WIMS 8/3/09]. The funding authorization bill, H.R. 3435, a supplemental appropriations for FY 2009, that passed the House 316-109 last week (incl. 77 Republicans), passed the Senate with 60 votes, including only six Republican votes. Republican Senators Lamar Alexander (R-TN), Christopher Bond (R-MO), Susan Collins (R-ME), Bob Corker (R-TN), Olympia Snowe (R-ME), and George Voinovich (R-OH) voted for additional funding that is expected to carry the program through the Congressional summer recess. Because no amendments were approved, the bill has been sent to the President’s desk to be signed into law.

Senate Majority Leader Harry Reid (D-NV) released a statement saying, “Cash for Clunkers is an extraordinarily popular program that is a good example of a public-private partnership where both consumers and business win, and one that contributes to Americans’ confidence in our continuing economic recovery. This program gives a much needed jolt to our economy and our manufacturers at a critical time. Retiring and recycling older, less efficient cars and trucks and replacing them with higher fuel economy models reduces oil consumption and air pollution. Beyond helping our domestic auto industry, this program will stimulate other sectors of the auto supply chain like mechanics and auto parts manufacturers.”

Senator Snowe issued a statement saying, “I believe it is unfortunate that we hastily approved this program in the first place. This rush explains the difficulties experienced by our dealers in Maine; hour-long waits to approve a single transaction, the consistent crashing of government websites, and a lack of clarity in terms of how much money has been spent. Yet, our auto dealers are fronting the cost of this program, and are participating in good faith with the expectation they will be reimbursed; Congress cannot afford to let them down.”

Senator Lamar Alexander (R-TN) said, "This program obviously stimulates the economy, and the money to pay for it comes from the earlier stimulus bill that isn’t working. It is especially important in Tennessee where one out of every three manufacturing jobs is auto-related. I strongly oppose any effort now or in the future to pay for ‘cash for clunkers’ by adding to the debt.”

Senator Carl Levin (D-MI) delivered a statement on the Senate floor just prior to the vote saying, "Rarely has this body passed legislation that has so clearly and quickly met our goals than when it approved the first installment of money for this program earlier this summer. The program offered rebates of $3,500 or $4,500 for consumers who traded in old, inefficient vehicles for new cars or trucks with higher mileage. Thousands of consumers who hoped to take advantage now wonder if they will have the opportunity. . . The impact has been so striking that one private economist has raised his estimate for economic growth in the third quarter of this year by more than 50 percent, based solely on the success of 'cash for clunkers.'

"This program accomplished what it was intended to accomplish. In just a few days, a quarter of a million Americans traded in their old car for a new model using the credits available from this program. That’s a quarter of a million American families that more fuel-efficient transportation; a quarter of a million transactions that will pump new money into local economies; and an incalculable boost to this nation’s struggling auto industry. . ."

Senator Levin reminded members that while some amendments may be "well intentioned. . . any amendment that is adopted here would be the death knell for this program. It would have to end immediately because of the uncertainty over whether any funds remain."

Senator Claire McCaskill (D-MO), one of four Democrats to vote against the bill, posted her rationale in advance of the vote saying, "Of course the cash for clunkers program is popular, we’re giving away money. My concerns are first, that we are just moving demand around, and that the sales in this program are robbing sales from 2, 3, or 12 months from now when we are going to still need sustained growth in our economy. Remember, around 60,000 to 70,000 people are trading their cars in for new ones every month without this program. Second, I haven’t yet gotten clear answers on how many deals are currently in the pipeline and how they will wind this program down in a way that will give certainty to buyers and dealers. Third, I’m worried that an extension right now will penalize the two companies that we just made huge taxpayer investments in. I’m trying to verify, but I believe, based on my conversations with dealers and other research, that Chrysler and GM both have inventory issues with the cars that qualify for this program. . ."

Access the Senate roll call vote on H.R. 3435 (click here). Access the statement from Senator Reid (click here). Access the statement from Senator Snowe (click here). Access the statement from Senator Alexander (click here). Access the floor statement from Senator Levin (click here). Access a release from Senator McCaskill explaining her no vote on August 4 (click here). Access legislative details for H.R. 3435 (click here). Access the CARS website for additional information (click here).

Bipartisan Center Report On Science In Federal Regulation

Aug 5: A bipartisan panel of top scientific and regulatory experts released recommendations calling on the White House and Federal agencies to make specific changes in the regulatory process to clearly distinguish scientific questions from policy disputes. The report comes from the Science for Policy Project (SPP), a project of the Bipartisan Policy Center (BPC). BPC is a non-profit organization that was established in 2007 by former Senate Majority Leaders Howard Baker, Tom Daschle, Bob Dole and George Mitchell to provide a forum where tough policy challenges can be addressed in a pragmatic and politically viable manner.

The SPP is co-chaired by former Rep. Sherwood Boehlert (R-NY), past chair of the House Science Committee, and Donald Kennedy, former editor of Science; and eleven other ideologically diverse members from business, academia, government and non-profits. Boehlert said, "The fundamental theme of the report is that the Administration needs to put in place procedures to try to distinguish science questions from policy questions. Often, policy disputes are cast as fights over science. This damages the credibility of science and obscures the real issues that ought to be debated. For example, how much risk a substance poses to human health or the environment is a science question; how much risk is acceptable is a policy question."

The report recommends requiring new information when regulations are proposed by agencies such as U.S. EPA and the FDA, and enhancing the credibility of Federal advisory committees to ensure the integrity of science in regulatory policymaking. Many of these recommendations are relevant to the White House and Federal agency effort to implement President Obama's March 9, 2009 Presidential Memorandum on Scientific Integrity [See WIMS 3/10/09]. An interim version of the SPP report was released in March, and the White House has reviewed that report as part of its work to issue guidelines on scientific integrity and regulatory reform, which are expected soon. The report's recommendations include:

• Clarity regarding key science questions needed to write specific regulations. Federal Register notices for proposed regulations should make clear what science questions and what policy questions needed to be answered to formulate the regulation and what science was most influential in drafting the regulation. The notices might also make clear what additional science would help resolve remaining questions and might offer policy alternatives that are consistent with the science.
  
• Greater focus on science in advisory committees. Federal agencies should empanel scientific advisory committees – committees that are composed solely of members with relevant scientific expertise – to address science questions relevant to policy, and those panels should not make policy recommendations. Members of such committees should be Special Government Employees, a category that makes them subject to conflict of interest and other ethics rules.
  
• Greater transparency in committee appointment process. The process for appointing committees should be more transparent, with agencies taking steps including seeking names through the Web and asking for comments on proposed individuals on the Web.
  
• More disclosure by committee members. Members of scientific advisory committees should be required to disclose to the government and to the public far more information on their backgrounds than is currently the case so the government and the public can evaluate their qualifications and determine whether their service raises any concern about conflicts of interest or bias.
  
• Clearer conflict of interest rules. The government should set clear rules about what constitutes a conflict of interest for a member of a scientific advisory committee. The government should distinguish clearly between conflict of interest and bias.
  
• Greater transparency in committee selection might allow a limited number of closed committee meetings. If procedures are put in place to make the selection of advisory committee members more transparent, then the government could consider allowing scientific advisory committees to have a limited number of closed meetings under specific circumstances.
  
• Transparency in the use of scientific literature. The process agencies and scientific advisory committees use to review the scientific literature should become more transparent and thorough. In general, papers that have not been peer reviewed should be treated with skepticism, but they should not be automatically excluded.
  
• Legitimate use of Confidential Business Information. The Confidential Business Information designation, which limits public access to information, is legitimate but appears to be overused.
  
• Greater participation in, and improved quality of peer review. Federal agencies, universities and scientific journals need to experiment with ways to encourage more scientists to act as peer reviewers and to experiment with different peer review procedures to see what will improve the quality of reviews.

The Science for Policy Project is funded by the David and Lucile Packard Foundation, the William and Flora Hewlett Foundation, and ExxonMobil Foundation. The project was directed by David Goldston, the former chief of staff of the House Science Committee.

Access a release from BPC (click here). Access the complete 47-page report (click here). Access the BPC website for more information (click here).

EIA Report On ACES Market and Economic Impacts

Aug 4: The Energy Information Administration (EIA) released a report -- Energy Market and Economic Impacts of H.R. 2454, the American Clean Energy and Security Act of 2009 -- prepared at the request of House Energy & Commerce Committee Chairman Henry Waxman (D-CA) and Subcommittee Chairman Edward Markey (D-MA) for an analysis of H.R. 2454, the American Clean Energy and Security Act of 2009 (ACES). EIA indicates ACES, which narrowly passed the House of Representatives on June 26, 2009, is a complex bill that regulates emissions of greenhouse gases through market-based mechanisms, efficiency programs, and economic incentives [See WIMS 6/26/09].

EIA says the cap-and-trade program for greenhouse gas (GHG) emissions, which covers roughly 84 percent of total U.S. GHG emissions by 2016, is in many respects the centerpiece of the bill and the primary driver of the results presented in this report. The program subjects covered emissions to a cap that declines steadily between 2012 and 2050. The cap requires a 17- percent reduction in covered emissions by 2020 and an 83-percent reduction by 2050, both relative to a 2005 baseline. The cumulative GHG emissions covered by the Title III cap-and-trade program over the 2012 to 2030 period are estimated to be 113.4 billion metric tons (BMT) in CO2-equivalent terms.

EIA lists the key provisions of ACES that are represented in the policy cases developed in this analysis include: the GHG cap-and-trade program for gases other than HFCs, including provisions for the allocation of allowances to electricity and natural gas distribution utilities, low-income consumers, State efficiency programs, rebate programs, energy-intensive industries, and other specified purposes; the combined efficiency and renewable electricity standard for electricity sellers; the carbon capture and storage (CCS) demonstration and early deployment program; Federal building code updates for both residential and commercial buildings; Federal efficiency standards for lighting and other appliances; technology improvements driven by the Centers for Energy and Environmental Knowledge and Outreach; and the smart grid peak savings program.

EIA prepared a range of analysis cases for the report. The six main analysis cases discussed in the Executive Summary, while not exhaustive, focus on two key areas of uncertainty that impact the analysis results: The role of offsets is a large area of uncertainty in any analysis of ACES; and the other major area of uncertainty in assessing the energy system and economic impacts of ACES involves the timing, cost, and public acceptance of low- and no-carbon technologies. Several key findings include:

• Given the potential of offsets as a low-cost compliance option, the amount of reduction in covered emissions is exceeded by the amount of compliance generated through offsets in most of the main analysis cases. Cumulative compliance between 2012 and 2030, including reductions both in domestic emissions of covered gases and in domestic and international offsets, ranges from 24.4 BMT to 37.6 BMT carbon dioxide (CO2)-equivalent emissions in the main analysis cases, representing a 21-percent to 33-percent reduction from the level of cumulative covered emissions projected in the Reference Case.
• The vast majority of reductions in energy-related emissions are expected to occur in the electric power sector. Across the ACES main cases, the electricity sector accounts for between 80 percent and 88 percent of the total reduction in energy-related CO2 emissions relative to the Reference Case in 2030.
• If new nuclear, renewable, and fossil plants with CCS are not developed and deployed in a timeframe consistent with emissions reduction requirements under ACES, covered entities are expected to respond by increasing their use of offsets, if available, and by turning to increased natural gas use to offset reductions in coal generation.
• Emissions reductions from changes in fossil fuel use in the residential, commercial, industrial and transportation sectors are small relative to those in the electric power sector. Taken together, changes in fossil fuel use in these sectors account for between 12 percent and 20 percent of the total reduction in energy-related CO2 emissions relative to the Reference Case in 2030.
• GHG allowance prices are sensitive to the cost and availability of emissions offsets and low-and no-carbon generating technologies. Allowance prices in the ACES Basic Case are projected at $32 per metric ton in 2020 and $65 per metric ton in 2030. Across all main analysis cases, allowance prices range from $20 to $93 per metric ton in 2020 and from $41 to $191 (2007 dollars) per metric ton in 2030 (Figure ES-3). The lower prices in the range occur in cases where technological options such as CCS and adoption of new nuclear power plants can be deployed on a large scale before 2030 at relatively low costs.
• ACES increases energy prices, but effects on electricity and natural gas bills of consumers are substantially mitigated through 2025 by the allocation of free allowances to regulated electricity and natural gas distribution companies. Except for the ACES No International/Limited Case, electricity prices in five of the six main ACES cases range from 9.5 to 9.6 cents per kilowatt-hour in 2020, only 3 to 4 percent above the Reference Case level. Average impacts on electricity prices in 2030 are projected to be substantially greater, reflecting both higher allowance prices and the phase-out of the free allocation of allowances to distributors between 2025 and 2030. By 2030, electricity prices in the ACES Basic Case are 12.0 cents per kilowatt-hour, 19 percent above the Reference Case level, with a wider band of 11.1 cents to 17.8 cents (10 to 77 percent above the Reference Case level) across all six main policy cases.

ACES increases the cost of using energy, which reduces real economic output, reduces purchasing power, and lowers aggregate demand for goods and services. The result is that projected real gross domestic product (GDP) generally falls relative to the Reference Case. Total discounted GDP losses over the 2012 to 2030 time period are $566 billion (-0.3 percent) in the ACES Basic Case, with a range from $432 billion (-0.2 percent) to $1,897 billion (-0.9 percent) across the main ACES cases.

Consumption and energy bill impacts can also be expressed on a per household basis in particular years. In 2020, the reduction in household consumption is $114 (2007 dollars) in the ACES Basic Case, with a range of $26 to $308 across all main ACES cases. In 2030, household consumption is reduced by $288 in the ACES Basic Case, with a range of $133 to $722 per household across all main ACES cases.

The report notes that the modeling horizon for this analysis ends in 2030. Unless substantial progress is made in identifying low- and no-carbon technologies outside of electricity generation, the ACES emissions targets for the 2030-to-2050 period are likely to be very challenging as opportunities for further reductions in power sector emissions are exhausted and reductions in other sectors are thought to be more expensive.

Environmental Defense Fund (EDF) issued a release say the EIA report indicates that "for $83 per year per household – or a dime a day per person we can solve climate change, invest in a clean energy future, and save billions in imported oil." EDF indicated that the EIA analysis "has similar findings to two other impartial and substantive studies done recently, from the Environmental Protection Agency and the Congressional Budget Office." EDF said, "This analysis confirms what every other credible study has found, and it -- once again -- refutes the widely reported scare tactics about the cost of the cap and trade bill. Opponents of action will always try to cherry-pick the numbers and use models with biased assumptions. The EPA, EIA and CBO are the non-biased standard for economic analysis."

Access the complete report or individual sections as well as spreadsheets and appendices (click here). Access the EDF release (click here).

Senate Hearing On Climate Law Allowance & Revenue Distribution

Aug 4: The Senate Finance Committee, Chaired by Senator Max Baucus (D‐MT) held a hearing on Allowance and Revenue Distribution Under Climate Change Legislation. Witnesses testifying at the hearing included representatives from the: Government Accountability Office (GAO); Resources for the Future (RFF); American Enterprise Institute (AEI) for Public Policy Research; and Environmental Defense Fund. Chairman Baucus and Ranking Member Chuck Grassley (R-IA) delivered opening statements.

Chairman Baucus explained that most major climate change bills place a limit -- or “cap” -- on carbon dioxide. Companies subject to the cap must buy permits -- often called “allowances” -- to emit greenhouse gases. One key issue in such a system is: How much of these allowances should the government sell at auction? And how much should the government give away for free?

He said, "Economists expect that these allowances will have a value, like cash. Thus, many argue that the government should not just give these allowances away. Many argue that the government should auction them, and return the proceeds to consumers. Others argue that the government should allocate a portion of the allowances to regulated companies. Doing so would soften the effects of putting a price on carbon." Under the House-passed, H.R. 2454 (ACES), at the outset, the government would freely allocate about 85 percent of the emission allowances.

Baucus indicates that, "Allowances will have significant value. In 2012, the first year of the program in the House‐passed bill, the Congressional Budget Office [CBO] puts their value at about $60 billion. For the period of 2010 to 2019, they amount to more than $870 billion." Baucus cites the CBO which says, “[T]he creation of allowances by the government should be recorded as revenues. That logic does not hinge on whether the government sells or, instead, gives away the allowances. Allowances would have significant value even if given away because the recipients could sell them or, in the case of a covered entity, use them to avoid incurring the cost of compliance.”

Baucus said that there are a number of ways to use allowance revenues to mitigate the cost of climate legislation on consumers and businesses. He cited for example, that "Congress could use the money from auctioning allowances to cut taxes: by cutting marginal rates, by cutting capital gains rates, by cutting payroll taxes. Or we could do all of the above. . . Congress could compensate consumers through rebates or fixed payments per‐capita. . . We could also devote allowance proceeds to helping low‐income Americans. We could expand the Earned Income Tax Credit. . . The House bill provided solid relief to low‐income Americans through these means. The Senate should match it, or build on it. Still another approach would be to dedicate a share of revenues to investment in energy efficiency."

Ranking Member Grassley said, "The President supports 100 percent auction of allowances." He cited, Treasury Secretary Geithner's testimony before the House Budget Committee earlier this year when he said, “This program should include a
100 percent auction of emissions allowances -- ensuring that the biggest polluters don't profit on the basis of past pollution…” He also cited Dr. Peter Orszag, OMB Director who said, “…if you didn’t auction the permit, it would represent the largest corporate welfare program that has ever been enacted in the history of the United States.”

Grassley said, "the allowance value. . . is in effect a national energy tax on all Americans -- one that will exacerbate the negative impact of other taxes on economic growth and jobs. This means that above all, we have a responsibility to mitigate, as much as possible, those painful effects on the American people."

GAO testified that, "The method for allocating allowances in a cap-and-trade program can have significant economic implications for the government, regulated entities, and households. Most importantly, a cap-and-trade system would create a market for a valuable new commodity: emissions allowances."

GAO indicated "A cap-and-trade program would increase the cost of burning fossil fuels and other activities that generate emissions and potentially raise costs for consumers. A key decision is the extent to which the government offsets these costs. For example, the government could sell the allowances and then return the revenues to covered entities or households. The government could also give away some or all of the allowances. According to the Congressional Budget Office, the value of the allowances could total $300 billion annually by 2020. Today’s testimony provides preliminary results of ongoing work assessing the potential effects of (1) allowance allocation methods, and (2) options for distributing program revenues or the economic value of allowances."

RFF testified that, "A simple per-household rebate of allowance revenue raised by the government through auction, coupled with a more moderate allocation to local distribution companies, can achieve distributional and regional goals at less cost and with greater administrative simplicity and predictability." AEI said, "Auctioning the allowances can address both the efficiency and distributional concerns, if the auction proceeds are properly used. Marginal tax rates can be reduced and compensation can be provided to vulnerable consumers."

EDF testified that, "The principles are straightforward: Protect consumers. Preserve and strengthen American competitiveness. And invest in the transition to a new, growing clean-energy economy. . . My conclusion is that the House bill strikes a sound balance, with the appropriate emphasis on the individual American family. Indeed, what is commonly overlooked is the extent to which HR 2454 channels allowance value to households . fully 43% of the total value over the life of the program."

Access a webcast of the hearing (click here). Access the hearing website for links to opening statement and all testimony (click here).

Senate "Cash For Clunkers" Debate Should Be Interesting

Aug 3: The overwhelming consumer response to the Car Allowance Rebate Systems (CARS) or “Cash for Clunkers” program, and the House approval of an additional $2 billion to extend the program has set the stage for an interesting Senate debate on the continuation of the program [See WIMS 7/31/09]. The future of the program hinges on a positive Senate vote, which appears likely, but, not without controversy and debate extending across party and philosophical lines.

Some Senators are arguing that the program is simply another auto company "bailout" while, others are arguing that requirements of the program should be insisting on upgrading to cars with better gas mileage. The Senate is expected to vote on the measure this week before it adjourns for the August recess. The CARs website reports that the program is still operating, but it is expected to be out of funds very soon.

The House voted 316 to 109 on July 31 to extend the program with an additional $2 billion in funding. The funding authorization is included in H.R. 3435, a supplemental appropriations bill for fiscal year 2009 for the Consumer Assistance to Recycle and Save Program. The 316 votes from approval consisted of 239 Democrats and 77 Republicans. 95 Republicans and 14 Democrats voted against the passage. The House Republican Leader John Boehner (R-OH) voted against the measure.

Senator John McCain (R-AZ) called the House approval of the $2 billion extension "another outrageous act of generational theft!" and said he "will oppose any move to take up the House bill." Senator Jim DeMint (R-SC) indicated he will support McCain's effort to defeat the bill. Senator Claire McCaskill (D-MO) has indicated she will support no "new" spending for cash for clunkers. She may support if it is funding already appropriated for stimulus, but she wants to see how the program will be ended.

Senator George Voinovich (R-OH) Ranking Member of the Senate Transportation and Infrastructure Subcommittee, the Subcommittee on Clean Air, Climate Change and Nuclear Safety and co-chair of the Senate Auto Caucus, praised the House approval of funds to continue the program. Senator Voinovich was a co-sponsor of the original legislation creating the program, with Sens. Debbie Stabenow (D-MI) and Sam Brownback (R-KS).

Senators Dianne Feinstein (D-CA) and Susan Collins (R-ME), Charles Schumer (D-NY), Thomas Carper (D-DE), and Bill Nelson (D-FL) are all among a group of Senators calling for the program to require the purchase of new cars which get better gas mileage.

Senator Voinovich said, “I am glad the House passed an additional $2 billion to fund the cash for clunkers program, which I co-sponsored with Sen. Stabenow and Brownback. As is evident from the extraordinary response to the program, it is a win-win -- it will stimulate our American economy, provide much needed jobs and it will promote fuel efficient cars to benefit our environment. I am thankful the House understood that this money should be taken from the already-enacted stimulus bill, which I voted against earlier this year. Unfortunately, programs such as ‘cash for clunkers,’ as well as robust highway and infrastructure spending were not part of the original stimulus proposal. This type of investment provides not only jobs, but tangible assets for taxpayer dollars. I look forward to this program making its way to our American citizens to reinvigorate jobs for our auto workers, especially in Ohio during these hard economic times.”

President Obama issued a statement on July 31, following the House approval of funding expansion and said, ""I want to thank leaders in the House of Representatives for working quickly and in a bipartisan way to pass legislation that will use Recovery Act funds to keep 'Cash for Clunkers' going. This program has been an overwhelming success, allowing consumers to trade in their less fuel efficient cars for a credit to buy more fuel efficient new models. It has given consumers a much needed break, provided the American auto industry an important boost, and is achieving environmental benefits well beyond what was originally anticipated. The program has proven to be a successful part of our economic recovery and will help lessen our dangerous dependence on foreign oil, while reducing greenhouse gas emissions and improving the quality of the air we breathe. I urge the Senate to act with the American consumers in mind to pass this important legislation."

Access the House roll call vote (click here). Access a release from Senator Voinovich (click here). Access a Twitter statement from Senator McCain (click here). Access a Twitter statement from Senator McCaskill (click here). Access a release and the DOT letter from Senators Feinstein and Collins(click here); and another release (click here). Access the Fox News report with comments from Senator McCain (click here). Access the CARS website for additional information (click here). Access a release from the President (click here). Access legislative details for H.R. 3435 (click here).

"Cash for Clunkers" - Economic Stimulus That Works

Jul 30: Less than five days old, the Car Allowance Rebate System (CARS, aka Cash for Clunkers) was supposed to stimulate the buying of about 250,000 new, more fuel-efficient cars and last until November 2009. However, the $1 billion program has become perhaps the most successful economic stimulus effort yet, as the "cash" is nearly gone and auto dealers are warning of limited choices due to shortages in inventory. Under the program consumers receive a $3,500 or $4,500 discount from the car dealer when they trade in their old, low mileage vehicle and purchase or lease a new, more fuel-efficient one.

U.S. Senator Debbie Stabenow (D-MI) issued a statement saying, “It is amazing that ‘Cash for Clunkers’ would be this successful this quickly. Many people talk of the need for a short-term stimulus for the economy. Well, we have found it in the CARS program. With over 200,000 cars sold, thousands of employees on the job serving customers, millions of dollars in advertisement spending, and sales tax income flowing into struggling states, CARS has injected money into communities across America. From Maine to California, from Michigan to Texas the impact is dynamic. It took a lot of hard work to get the votes to pass this program into law, so I am grateful that consumers love it.

"I am delighted to hear dealers say that all of their salespeople are busy and they are selling more cars in a day than they had been selling in a month. That is terrific news and I hope the sales continue even though the initial funding for the CARS program has been suspended. This program has helped bring people back to showrooms to see what incredible cars and trucks we make in this country. I urge Congress and the Administration to provide additional funding so that ‘Cash for Clunkers’ may continue under its original authorization until November."

On July 27, the Alliance of Automobile Manufacturers (Alliance) joined Department of Transportation (DOT) Secretary Ray LaHood and other auto industry representatives to officially launch the “Cash for Clunkers” program. The Alliance worked with DOT to ensure what they hoped would be a "successful implementation of the program." Alliance President and CEO Dave McCurdy said, "The 250,000 vehicles this program is designed to sell will be a needed to boost to the entire industry. Automakers will continue working with DOT and Congress to meet the goals of stimulating vehicle sales, reducing greenhouse gas emissions from autos and enhancing energy security.”

A "funding available meter" on the CARS website which still indicated substantial funding available earlier today (July 30), was taken down by 9:30 AM ET. Friday morning, the White House reportedly indicated that it would assure that the CARS program operates through this weekend and would attempt to find funds to continue the program.

On July 31, U.S. Senators Dianne Feinstein (D-CA) and Susan Collins (R-ME) urged the Department of Transportation (DOT) to promptly provide Congress with a detailed evaluation of the effectiveness of the CARS program. In a letter to Transportation Secretary Ray LaHood the Senators renewed their request for a detailed analysis of how the program has worked to date, including the make and model of the vehicles purchased, the fuel efficiency of purchased vehicles, and the condition of vehicles traded-in. The two Senators along with Senator Charles Schumer (D-NY) and Thomas Carper (D-DE), previously authored an alternative “Cash for Clunkers” proposal that they say would have achieved 32 to 38 percent greater oil savings and emissions reductions than the enacted “CARS” program. The Senators have said that any extension of the program must adhere to higher fuel efficiency and greater emissions reductions.

Senator Carl Levin (D-MI) issued a brief statement mid-day on July 31, saying, “The cash for clunkers program has proven hugely successful in its first week. We have been told by the White House that people can keep buying cars under the program until further notice. We don’t know how long it will last, so people should go to their car dealers now if they want to take advantage of the program. We’re also going to seek additional funding to hopefully make the program last longer.”

In unprecedented fashion, the House voted 316 to 109 this afternoon (1:24 PM, July 31) to extend the program with an additional $2 billion in funding. The funding authorization is included in H.R. 3435, a bill to provide supplemental appropriations for fiscal year 2009 for the Consumer Assistance to Recycle and Save Program. The Senate will not take up the bill until next week, but it is not without controversy. Fox News is reporting that Senator John McCain (R-AZ) "will oppose any move to take up the House bill." McCain told Fox earlier today, "I not only wouldn't vote for the extra two billion, I was opposed to the initial billion." McCain, reportedly said, "I can't imagine that any taxpayer of America would have thought that the TARP, the financial recovery money, would be used now to subsidize the sale of automobiles in America."

Access a release from Senator Stabenow (click here). Access a 7/27 release from the Alliance (click here). Access the CARS website for additional information (click here). Access a release and the DOT letter from the two Senators (click here); and another release (click here). Access a release from Senator Levin (click here). Access a lengthy release from House Speaker Nancy Pelosi with videos of floor speeches and links to additional information including the roll call vote (click here). Access the Fox News report (click here).

Senate Hearing On Climate Change & National Security

Jul 30: The Senate Environment and Pubic Works Committee, Chaired by Senator Barbara Boxer (D-CA) held a hearing entitled, Climate Change and National Security. Witnesses testifying at the hearing included former Senator John Warner (R-VA); Vice Admiral Dennis McGinn USN (Ret.) Member, Military Advisory Board, Center for Naval Analyses; and representatives from the Truman National Security Project; and Baker Hostetler.

Ranking Member James Inhofe (R-OK) said, "I’m going to stipulate that the central finding in your reports -- that climate change poses serious national security threats -- is true. I’m even going to stipulate that all of the science informing your reports is true. What I am going to focus on is the link between developing American resources and America’s national security. And I’m going to explain why passing cap-and-trade won’t solve any of the legitimate issues . . ." Inhofe said that EPA Administrator Lisa Jackson agreed that unilateral action to address global warming is futile without meaningful participation from China, India, and other developing countries and that Waxman-Markey "would reduce global temperatures by less than one-tenth of a degree Fahrenheit by 2050."

Senator Inhofe concluded that "passing cap-and-trade will do great harm to our economic security, to our energy security, and therefore to America’s national security. We cannot on the one hand de-industrialize America and on the other hope that America will remain a great power. The sensible solution here is to free ourselves from Middle East oil by producing more of our resources -- all of our resources -- right here at home, and to pursue policies to encourage manufacturing here in the United States."

Senator Warner testified that, "During my fifth and last Senate term, I was privileged to Chair the Armed Services Committee and serve on this Committee [EPW]. Many retired military officers, and concerned citizens visited with me to discuss the concepts of how America’s military policy, energy policy, and climate policy were interrelated. Unquestionably, they are!" Senator Warner quoted a number of high-ranking public officials and experts and said, "As the testimony of this panel today will confirm, it is the men and women in uniform who will likely be called upon by the President to address adverse situations brought on by erratic climate changes."

Senator Warner recommended that the Armed Services Committee, compile a more detailed record on the security issue and said the "Armed Services Committee has a reputation for achieving consensus on vital issues with a high degree of bipartisanship. History records this record over a half century, for that level of bipartisanship is a duty owed on matters relating to our nation’s security, and, especially to the uniformed personnel and their families." He said, "Bipartisanship is key to today’s public acceptance and endurance and implementation in the future of proposed legislation. The challenges and problems must be addressed by all nations – it’s a global problem with consequences and burdens to be shared by all people. . ." He concluded saying, "The United States must lead, and now. Our nation is among the major emitters of pollution. Only if we lead, stepping forward with a long."

Vice Admiral Dennis McGinn testified that the CNA Military Advisory Board has produced two reports, the first in April, 2007 and the latest in May of this year, focused on the topic of this hearing. The first examined the national security threats of climate change, and the most recent analyzed the national security threats of America’s current and future energy posture. He said, "I have to acknowledge the elephant in the room. We are in the midst of the most serious global financial crisis of our lifetimes. After a year of examining our nation’s energy use, it is clear to all members of our military board that our economic, energy, climate change and national security challenges are intertwined and co-dependent. Our past pattern of energy use is responsible, in no small measure, for our economic situation today. If we do not adequately address our nation’s growing energy demand and climate change now, in wise and visionary ways, future financial crises will most certainly dwarf this one. . .

"Without bold action now to significantly reduce our dependence on fossil fuels, our national security will be at greater risk. Fierce global competition and conflict over dwindling supplies of fossil fuel will be a major part of the future strategic landscape. Moving toward clean, independent, domestic energy choices lessens that danger and significantly helps us confront the serious challenge of global climate change." He concluded, ". . .if we act with boldness and vision now, future generations of Americans will look back on this as a time when we came together as a Nation and transformed daunting challenge and worry into opportunity, a better quality of life and a more secure future for our world."

Jonathan Powers, Retired U.S. Army Captain and Chief Operating Officer Truman National Security Project testified that , "When it comes to climate change, we as a nation have been trying to lead by rank for too long. It is time we begin to lead by example. America is at a critical point, and our security relies heavily on how we address this growing threat. A recent report from the Center for New American Security rightly points out that 'Climate change… may not be a threat that soldiers can attack and defeat, but it is likely to affect the safety and prosperity of every American, both through its effects on global stability and on our local environments.' . . This committee will play a critical roll in once again establishing America as a nation that leads by example. It is vitally important that you develop domestic legislation that will protect our environment and ensure our national security. We can only accomplish this by reducing greenhouse gases, providing clean energy incentives, freeing us from foreign dependence, and growing our economy."

David B. Rivkin, Jr. a Partner with Baker & Hostetler LLP and Co-Chairman of the Center for Law and Counterterrorism at the Foundation for Defense of Democracies testified that, "advocates of the unilateral cap-and-trade approach must rely on either the moral example of the United States’ imposing emission limits on itself, or on the threat or use of trade penalties, to induce other countries to reduce their emissions. These strategies are unlikely to work. . . If climate change is really an issue of national security, it must be treated like one. The United States should approach issues of climate change with the same prudence and realism as any other national security issue. A unilateral cap-and-trade regime which would do nothing for the climate is a huge leap in the wrong direction. . ."

Access the hearing website for links to all testimony and a webcast (click here). Access Senator Inhofe statement (click here).

NAS Project Says Deployment Of Energy Options Is "Urgent"

Jul 28: The National Academy of Sciences (NAS), National Research Council released the capstone report of the America's Energy Future project entitled, Technology and Transformation, which indicates that with a sustained national commitment, the United States could obtain substantial energy-efficiency improvements, new sources of energy, and reductions in greenhouse gas emissions through the accelerated deployment of existing and emerging energy technologies. According to the report, initiating deployment of these technologies is urgent; actions taken -- or not taken -- between now and 2020 to develop and demonstrate several key technologies will largely determine the nation's energy options for many decades to come.

A release on the report says that deploying existing energy-efficiency technologies is a near-term and low-cost way to reduce U.S. energy demand. Fully deploying the technologies in buildings alone could save enough power to eliminate the need for new electricity generating plants to meet growing U.S. demand. However, some new plants would likely still be needed to address regional supply imbalances, replace obsolete technology, or present more environmentally friendly sources of electricity. Deployment of efficiency technologies in the building, industrial, and transportation sectors could reduce projected U.S. energy use by 15 percent in 2020 and by 30 percent in 2030. Even greater energy savings would be possible with more aggressive policies and incentives.

The report indicates that the United States has many promising options for obtaining new sources of electricity over the next two to three decades, especially if carbon capture and storage and evolutionary nuclear technologies can be deployed at an adequate scale. However, the deployment of these new technologies is very likely to result in higher consumer prices for electricity. In addition, the nation's electrical grid will require expansion and modernization to enhance its reliability and security, accommodate changes in load growth and electricity demand, and to enable the deployment of new energy efficiency and supply technologies, especially intermittent wind and solar energy.

In the transportation sector, petroleum will continue to be an indispensable fuel in the coming decades, but maintaining current rates of domestic petroleum production (about 5.1 million barrels per day in 2008) will be challenging. There are limited options for replacing petroleum or reducing petroleum use before 2020, but there are more substantial long-term options that could begin to make significant contributions by 2030 or 2035. Reductions in petroleum use could be obtained through increased vehicle efficiency, production of alternative liquid fuels such as cellulosic ethanol or coal-and-biomass fuels, and expanding deployment of battery electric and hydrogen fuel-cell vehicles.

The report says that substantial reductions in greenhouse gas emissions from the electricity and transportation sectors are achievable over the next two to three decades. In both cases, adopting a portfolio approach -- deploying a variety of alternative technologies aimed at reducing emissions -- would be necessary. For the electricity sector, enabling this portfolio approach will require demonstrating, within the next decade, that carbon capture and storage technologies are technically and commercially viable in both new and existing power plants and in liquid fuels production. It will also be necessary to demonstrate the commercial viability of evolutionary nuclear plants.

The report indicates that to begin accelerated deployments of new energy technologies by 2020, and to ensure that innovative ideas continue to be explored, the public and private sectors will need extensive research development and demonstration over the next decade. A broad portfolio approach, supporting basic research through the demonstration stage, will likely be more effective than targeted efforts aimed at identifying technology winners and losers. At the demonstration stage, high-priority technologies include carbon capture and storage, evolutionary nuclear technologies, cellulosic ethanol, and advanced light-duty vehicles. The more long-term research and development needs include new technologies for producing liquid fuels from renewable resources, advanced batteries and fuel cells, large-scale electricity storage, enhanced geothermal power, and advanced solar photovoltaic technologies. Finally, the report recommends that because many barriers exist that could delay or prevent technology deployment, sustained policy and regulatory actions, as well as other forms of incentives, should be employed to drive adoption.

The report is the third and final in a series of reports from the National Academies' America's Energy Future project, which was undertaken to stimulate and inform a constructive national dialogue about the nation’s energy future. The first report dealt with the extensive R&D necessary for liquid fuels from biomass and coal [See WIMS 5/29/09]. The second report dealt with electricity from renewables [See WIMS 6/17/09].

The America's Energy Future project is sponsored by the U.S. Department of Energy, BP America, Dow Chemical Company Foundation, Fred Kavli and the Kavli Foundation, GE Energy, General Motors Corp., Intel Corp., and the W.M. Keck Foundation and a number of endowed funds which perpetually support the work of the National Research Council.

Access a release from NAS (click here). Access the America's Energy Future project website for links to all report and related information (click here).

Energy & Climate Focus Of U.S.-China Dialogue Meeting

Jul 28: President Barack Obama addressed the opening session of the first U.S.-China Strategic and Economic Dialogue at the Ronald Reagan Building and International Trade Center in Washington on Monday, July 27. The President laid out a framework of his vision for yet another critical aspect of American foreign policy -- the U.S. relationship with China, which he called "as important as any bilateral relationship in the world." The President identified President Nixon’s visit as a pivotal moment, he described how the Cold War era had limited the relationship between the two countries to a narrow set of issues, but that it was now time to seek cooperation on mutual interests on a much broader scale.

Following a discussion of the importance of U.S.-Climate relations on critical economic issues, the President listed the number two priority issue as energy and climate change. He said, "Second, we can cooperate to advance our mutual interest in a clean, secure, and prosperous energy future. The United States and China are the two largest consumers of energy in the world. We are also the two largest emitters of greenhouse gases in the world. Let's be frank: Neither of us profits from a growing dependence on foreign oil, nor can we spare our people from the ravages of climate change unless we cooperate. Common sense calls upon us to act in concert.

"Both of our countries are taking steps to transform our energy economies. Together we can chart a low carbon recovery; we can expand joint efforts at research and development to promote the clean and efficient use of energy; and we can work together to forge a global response at the Climate Change Conference in Copenhagen and beyond. And the best way to foster the innovation that can increase our security and prosperity is to keep our markets open to new ideas, new exchanges, and new sources of energy."

President Obama said, "Let us be honest: We know that some are wary of the future. Some in China think that America will try to contain China's ambitions; some in America think that there is something to fear in a rising China. I take a different view. And I believe President Hu takes a different view, as well. I believe in a future where China is a strong, prosperous and successful member of the community of nations; a future when our nations are partners out of necessity, but also out of opportunity. This future is not fixed, but it is a destination that can be reached if we pursue a sustained dialogue like the one that you will commence today, and act on what we hear and what we learn. . ."

Secretary of State Hillary Clinton also commented on energy and climate change and her opening comments. She said, "As the world’s two biggest emitters, we must demonstrate to the developed and developing world that clean energy and economic growth can go hand-in-hand. We are already involved in promising partnerships. In Beijing, I toured a geo-thermal plant that is a true U.S.-Chinese collaboration. General Electric has provided high-tech equipment to produce heat and power with half the emissions, and far less water usage than the coal plants that are typically relied on. And Chinese businesses build the steam turbines that help to power the plant. This plant saves costs and provides clean energy -- including heat for the U.S. Embassy."

In a State Department briefing on the U.S.-China Strategic and Economic Dialogue, Todd Stern, Special Envoy for Climate Change Issues described further details of subsequent meetings where there was substantial focus on climate change and clean energy. He said in a plenary session, Secretary Chu gave compelling PowerPoint presentation that focused both on the science and technology aspects of climate change. On the Chinese side, two vice premiers from the NDRC -- Vice Premier Zhang Guobao spoke on energy issues and Vice Premier Xie Zhenhua talked about the substantial steps that China is taking to limit CO2 emissions.

Following the plenary session, there was a special session on climate change, and the conversation between the two sides continued. On the U.S. side, John Holdren spoke on what the science is telling us -- noted the scientific view that temperature increase ought to be limited to 2 degrees Celsius as compared to pre-industrial times, and talked about the impacts of climate change. Carol Browner described the Obama Administration’s domestic efforts on clean energy and climate change, and Stern talked about the state of U.S.-China cooperation and efforts on the international front. Mr. Xie spoke again for China, as did Mr. Zhang, and also Madame Ye. She spoke on forest efforts in China.

Overall, Stern said, "I think it was a quite constructive day, which, of course, had the unusual feature of bringing together many cabinet and sub-cabinet level officials on each side in a way that allowed them to hear the perspectives from the other. I think the level and the breadth of Chinese and U.S. participation highlighted the importance of the issue to both countries and the degree to which climate and clean energy are becoming increasingly seen as interrelated to both economic and national security issues facing both countries."

Today (July 28) the U.S. and China signed the U.S.-China Memorandum of Understanding to Enhance Cooperation in Climate Change, Energy, and the Environment. Secretary Clinton said, "This memorandum builds on past efforts, including the Ten Year Framework for Energy Environment Cooperation, and highlights the importance of climate change in our bilateral relationship by creating a platform for climate policy dialogue and cooperation. It also provides our countries with direction as we work together to support international climate negotiations and accelerate the transition to a low-carbon economy. During the last two days, we’ve had extensive discussions at the Strategic and Economic Dialogue about what the United States and China are doing to reduce emissions, how we can move forward in advance of the UN Climate Conference in Copenhagen this December, and the steps we intend to take to promote sustainable low-carbon economic growth."

July 29, 2009: Update: Access the full text of the U.S.-China Memorandum of Understanding (click here). Access a summary and links to documents from the U.S.-China Strategic and Economic Dialogue (click here).

Access an overview of the President's remarks and link to a video and the full text (click here). Access Secretary Clinton's comments (click here). Access the full text of the State Department briefing (click here). Access the full text of the memo signing ceremony (click here). Access the State Department China website for links to more information (click here). Access the China Daily coverage of the Dialogue meetings (click here).

Role Of Agriculture & Forestry In Global Warming Legislation

Jul 22: U.S. Department of Agriculture (USDA) Secretary Tom Vilsack and other Administration officials and agriculture interests testified before the Senate Agriculture Committee, Chaired by Senator Tom Harkin (D-IA) on, The Role of Agriculture and Forestry in Global Warming Legislation. Witnesses testifying included representatives from the: National Farmers Union; American Farm Bureau Federation; Forest Climate Working Group; the Bipartisan Policy Center; and key Administration officials including: Tom Vilsack, Secretary of ; Lisa Jackson, U.S EPA Administrator; and Dr. John Holdren, Director of the White House Office of Science & Technology.

In an opening statement, Chairman Harkin said, "The challenge ahead of us is daunting, and yet if we are to honor our responsibility to future generations we cannot sidestep it. . . While this overall transformation strategy is clear, the task is far from simple. Our production, delivery, and use of energy are incredibly large and pervasive in our lives. We need to drastically increase efficiency throughout our energy economy, and we need to accelerate the transition from fossil fuels to energy derived from domestic renewable energy resources. . .

"Agriculture and forestry can play a central role in this energy transition and earn economic rewards for doing so. . . With good reason, we hear a lot of concern expressed about projected costs to consumers, farmers, ranchers, and other businesses from proposed energy and global warming legislation. I share those concerns, and that is why I believe we must do our best to analyze costs and find the most economical, commonsense ways to achieve critically important results. . . I am convinced that this energy transformation holds the key, not only to economic recovery today, but to major job growth and economic development for decades to come. . . The energy and global warming challenge ahead is unlike anything we have faced before, and yet experience shows America is up to the task of leading the world in solving it."

Ranking Member Senator Saxby Chambliss (R-GA), raised many concerns in his opening statement. Senator Chambliss outlined several concerns with the House-passed American Clean Energy and Security Act (H.R. 2454) and the "tremendous costs associated with its provisions." He said the cap and trade program will "undoubtedly raise production costs for farmers and ranchers." He called for more hearings on the legislation. He said he has asked USDA and Texas A&M University to conduct economic analyses of the bill, with special attention to the effects at the farm gate level and to consumers.

Chambliss said according to the Farm Bureau, full implementation of the bill will cause farm income to drop $5 billion compared to the baseline. Also, the National Cotton Council says cotton producers will see $300 to 400 million in increased production costs, rice producers will see their costs increase $80 to $150 per acre and Farm Bureau estimates corn and soybean farmers will see their costs increase over $20 per acre by 2020.

Senator Chambliss said, “Like most of my Senate colleagues, I want to support a bill that provides greater energy security for Americans and addresses climate change. Unfortunately, the House bill is not the answer. I want to support a bill that creates all kinds of jobs, not just green jobs. That bill should also reflect the realities of producing food, fiber, feed, and fuel in the United States and recognize the unique aspects of rural America. I support greater energy conservation and efficiency. I support the development of nuclear energy, renewable and alternative energy sources, and new drilling. We can do all of these things while addressing the environmental aspects of energy production and use. I’m ready to work with any of my colleagues who share similar goals.”

In his testimony, USDA's Vilsack released the results of USDA economic analysis showing that the economic benefits to agriculture from the cap and trade legislation will likely outweigh the costs in the short term, and that the economic benefits from offsets markets will easily outpace increased input costs over the long term. Vilsack said, "Although we realize there are a variety of specific approaches that can be used to achieve clean energy and climate goals, over the last several weeks, USDA has analyzed costs and benefits of the House-passed climate legislation for agriculture. Our analysis demonstrates that the economic opportunities for farmers and ranchers can potentially outpace -- perhaps significantly -- the costs from climate legislation.

Contrary to other testimony and statements, Vilsack said, "The agriculture sector will benefit directly from allowance revenues allocated to finance incentives for renewable energy and agricultural emissions reductions during the first five years of the H.R. 2454 cap and trade program. Funds for agricultural emissions reductions are estimated to range from about $75 million to $100 million annually from 2012-2016. H.R. 2454's creation of an offset market will create opportunities for the agricultural sector. In particular, our analysis indicates that annual net returns to farmers range from about $1 billion per year in 2015-20 to almost $15-20 billion in 2040-50, not accounting for the costs of implementing offset practices."

Vilsack continued, "So, let me be clear about the implications of this analysis. In the short term, the economic benefits to agriculture from cap and trade legislation will likely outweigh the costs. In the long term, the economic benefits from offsets markets easily trump increased input costs from cap and trade legislation. Let me also note that we believe these figures are conservative because we aren't able to model the types of technological change that are very likely to help farmers produce more crops and livestock with fewer inputs. Second, the analysis doesn't take into account the higher commodity prices that farmers will very likely receive as a result of enhanced renewable energy markets and retirement of environmentally sensitive lands domestically and abroad. Of course, any economic analysis such as ours has limitations. But, again, we believe our analysis is conservative -- it's quite possible farmers will actually do better."

The American Farm Bureau, completely countered the testimony of Secretary Vilsack and concluded, ". . .we remain very concerned about the broad potential adverse impacts of cap-and-trade on agriculture. Even though some say agriculture will benefit, that will depend to a great degree on where the producer is located, what he or she grows, and how his or her business model can take advantage of any provisions in the legislation. Not every dairy farmer can afford to capture methane – it is a capital-intensive endeavor. Not every farmer lives in a region where wind turbines are an option. Not every farmer can take advantage of no-till. Not every farmer has the land to set aside to plant trees. . . Yet, every farmer has production costs to meet. Nearly all of us rely on fertilizer. We all drive tractors. We all use energy in our production. We know our costs will rise. And frankly, we are very concerned about the impact of this legislation on our livelihood."

The Farm Bureau also emphasized the importance of an international agreement and stated, "Unless other countries, such as China and India, adopt similar emissions restrictions, the United States, if it adopts this legislation, will be imposing tremendous costs on our economy and our children and grandchildren and all for very little if any benefit. . . A ton of GHG emitted in China is the same as a ton of GHG emitted in Virginia. Regulating emissions in Virginia without regulating emissions in China will have little or no effect on the environment. Most experts agree that if the House legislation worked exactly as planned, it would not lower temperatures by more than a few tenths of a degree by 2050. Most experts agree that the United States cannot solve this problem alone. . . "

Access the hearing website for links to all testimony and a webcast (click here). Access a statement from Senator Harkin (click here). Access a statement from Senator Chambliss (click here). Access the 13-page USDA Preliminary Analysis of the Effects of H.R. 2454 On U.S. Agriculture (click here).

Local Views On Climate Change & Clean Energy Jobs

Jul 21: As part of the continuing series of climate legislation hearings, the Senate Environment and Pubic Works (EPW) Committee, Chaired by Senator Barbara Boxer (D-CA) held a hearing entitled, Clean Energy Jobs, Climate-Related Policies and Economic Growth -- State and Local Views. Witnesses testifying at the hearing included: Governors from Colorado; Washington; North Dakota; and New Jersey and Mayors from Burlington, Vermont; Alexandria, Virginia; and Trenton, New Jersey; an Arkansas State House Representative.

In an opening statement Chairman Boxer said, "We are facing two historic challenges today -- the current recession, and the dangers of unchecked global warming. And we have the opportunity to address both with a single solution that will create millions of clean energy jobs in America, reduce our dependence on foreign oil, and protect our children and grandchildren from pollution.

"I agree with President Obama, who said: 'We can remain one of the world's leading importers of foreign oil, or we can make the investments that would allow us to become the world's leading exporter of renewable energy. We can let climate change continue to go unchecked, or we can help stop it. We can let the jobs of tomorrow be created abroad, or we can create those jobs right here in America and lay the foundation for lasting prosperity.' Legislation that provides incentives for clean energy will create jobs, increase our energy efficiency, save families and businesses money in energy costs and drive technological innovation."

EPW Ranking Member James Inhofe (R-OK), with a completely opposite view said, "As I’ve stated before, cap-and-trade benefits the coasts at the expense of the heartland. Cap-and-trade divides rather than unites America behind a sensible, workable energy policy." Senator Inhofe cited the testimony of Arkansas State Representative John Lowery, a Democrat, who said, "When it comes to Waxman-Markey, unfortunately this bill will devastate my region. It will kill jobs, harm our school system, throw back our economic progress gained the last few years, and imposes a disproportionate burden on Arkansans."

Inhofe continued saying, "Rep. Lowery also speaks eloquently about a 'way of life' that would perish under cap-and-trade. He is referring to life in Arkansas and rural America. Cap-trade supporters see rural America as wasteful and environmentally backward. They see those in rural America as mere contingencies in the battle to save the planet. But these are real people with real jobs and real families. And for them, cap-and-trade will spell economic disaster. The debate over cap-and-trade does is not partisan; it’s regional. And I can tell you, when it comes to energy policy, Democrats in the Midwest and the South think differently than Speaker Pelosi and Henry Waxman."

Access the hearing website for links to testimony, Senator Boxer's statement and a webcast (click here). Access the complete statement from Senator Inhofe (click here).

EPA Administrator Jackson Speaks Out On Environmental Justice

Jul 21: U.S. EPA Administrator Lisa Jackson delivered a major speech on environmental justice to the National Environmental Justice Advisory Council (NEJAC). NEJAC is conducting a Public Meeting in Arlington, Virginia from July 21 – 23. The Council is participating in discussions about EPA priorities related to environmental justice, school air toxics monitoring, recommendations for goods movement impacts on air quality, and other topics.

The following is an excerpt from the Administrator's speech and a reaction from the Sierra Club. Jackson said, "Earlier this year we also provided $800,000 in grants to fund environmental justice projects. Those will address environmental and public health issues in 28 states. And we’ve also been working hard to expand our message to new communities. I just returned from the 80th annual meeting of the League of United Latin American Citizens, where we discussed the unique challenges their community faces. Tomorrow, I’ll be speaking to a tribal group. And I’ve had several meetings with many of your local Environmental Justice partners across the country.

"But let me say loud and clear: this is just the beginning. The inauguration of the first African American president, and my subsequent confirmation as the first African American Administrator of this Agency, has forever changed the face of environmentalism in this country. I hope it sends a clear signal that environmentalism does not come in any one shape, size, or look. And if anyone lives out this truth on a daily basis -- it’s you. Environmentalism is not only about protecting wilderness or saving polar ice caps. As important as those things are, environmentalism is also about protecting people in the places where they live, and work, and raise families. It’s about making our urban and suburban neighborhoods safe and clean, about protecting children in their schools, and workers at their jobs. . .

"We have to go to every community – especially those that have been left out and left behind – and impress upon them that the issues of environmental protection are their issues, their work is our work, and their struggles are our struggles. I want you to know that I get that. I also want to be sure we’re not only talking about downsides. We have in President Obama a leader who rejects the false choice between a green environment and a green economy. That opens up opportunities to create green jobs in the places where both the 'green' and 'jobs' are absolutely vital. . .

"In the years ahead, I want to see a full-scale revitalization of what we do and how we think about environmental justice. This is not an issue we can afford to relegate to the margins. It has to be part of our thinking in every decision we make. And not just at EPA. We need the nonprofit sector. We need the academic sector. And we need the private sector. It’s absolutely essential that we have a wide range of voices raising these issues. . . My friends, the EPA is once again guided by a broad vision of public health protection and environmental preservation. Environmental justice is central to that vision. I look forward to making real progress in the months and years ahead, and continuing this important partnership."

Sierra Club applauded Administrator Lisa Jackson's call for greater diversity in the environmental movement and indicated it "takes pride in our leadership on these issues." Sierra Club President Allison Chin said, "Now, with the leadership of a diversity council and my election as our first Asian-American president, Sierra Club is committed to becoming an even more welcoming and inclusive organization."

Leslie Fields, Director of the Sierra Club's Environmental Justice and Community Partnerships program said, "The environmental movement should belong to anyone who wants clean air, clean water and a healthy planet for their families. All too often people face disproportionate risks of harm because of their demographic characteristics or economic condition, and we applaud Administrator Jackson for her sincere leadership in supporting more diversity in the environmental movement so all people can have a voice."

Access the complete text of Jackson's speech (click here). Access a release from Sierra Club with links to additional information (click here). Access the agenda for the NEJAC meeting (click here). Access the NEJAC website for additional information (click here). Access EPA's Environmental Justice website for more information (click here).

U.S. & International Auto Makers Oppose E15 Fuel Waiver

Jul 20: Despite the recent support announced by 10 Midwestern governors supporting the proposal [See WIMS 7/17/09] that ethanol blending levels be increased from 10 to 15 percent (i.e. E15 Waiver), the Association of International Automobile Manufacturers (AIAM) filed comments to U.S. EPA opposing the waiver request. EPA extended the comment period by 60 days to July 20, 2009, on a waiver application submitted by Growth Energy and 54 ethanol manufacturers on March 6, 2009 [See WIMS 5/15/09].

Michael Stanton, President and CEO of AIAM, issued a statement saying, "AIAM and its member companies have long recognized the importance of addressing climate change and have supported efforts to reduce greenhouse gas emissions while significantly increasing fuel economy. With so much progress made by government and industry in recent months to meet these goals, we believe it would be premature for EPA to approve the near-term distribution and sale of fuels containing more than 10% ethanol without further testing to prevent unintended negative consequences.

"The Clean Air Act requires producers of any new fuel or fuel additive to show that those fuels will not contribute to the failure of vehicles or engines to meet emissions standards. Most vehicles currently being driven by American consumers were not designed to operate on ethanol blends greater than E10. If EPA were to approve the sale of such fuels, we believe a range of problems would result that could jeopardize the control or reduction of automotive emissions. These problems include the potential for immediate harm to, or failure of, highly calibrated emissions systems that were not designed to operate on such 'mid-level' fuels as E15. Further, many vehicles today are equipped with onboard diagnostic (OBD) systems as part of an integrated emissions control system. Testing to determine how E15 may negatively affect the proper operation of OBD systems is insufficient at this time.

"The consequence of potential equipment malfunctions caused by the use of E15 extends beyond failure to sufficiently control emissions. It will also create a high risk of consumer dissatisfaction due to drivability problems which would needlessly damage product reputation and imperil customer satisfaction with dealer service. Such drivability problems may also tempt consumers to tamper with emission controls in an effort to improve performance. Owner satisfaction may be further jeopardized by the reduction of fuel economy they will experience as a consequence of switching from E10 to E15.

"Another issue yet to be sufficiently studied is the potential negative impact E15 would have on the fuel production, distribution and marketing infrastructure. In particular, EPA should fully evaluate how the addition of a new blend of fuel will affect service station storage and pump systems and the ability of customers to select the right fuel for his or her vehicle. AIAM and other industry groups whose products and customers would be affected by the introduction of E15 are working cooperatively with the Department of Energy and the Environmental Protection Agency to conduct the needed studies to assess the impacts of introducing mid-level ethanol blends to the market. These studies have been identified and stakeholders are moving ahead to fill gaps in current knowledge about the practical consequences of increasing the ethanol content in gasoline. To approve a waiver before these studies are completed would be premature. We encourage EPA to delay approval of the waiver until sufficient testing has been conducted."

AIAM represents 13 international motor vehicle manufacturers who account for 40 percent of all passenger cars and light trucks sold annually in the U.S. Member companies include Aston Martin, Ferrari, Maserati, Honda, Hyundai, Isuzu, Kia, Mitsubishi, Nissan, Peugeot, Subaru, Suzuki and Toyota.

Similarly, the Alliance of Automobile Manufacturers (Alliance), representing 11 vehicle manufacturers including BMW Group, Chrysler Group LLC, Ford Motor Company, General Motors, Jaguar Land Rover, Mazda, Mercedes-Benz USA, Mitsubishi Motors, Porsche, Toyota and Volkswagen; also opposes the waiver. The Alliance said specifically, "The Alliance asks EPA to deny this waiver application, in whole and in part, because insufficient data are available to determine whether the proposed fuel blend(s) can satisfy the legal requirements under the Clean Air Act section 211(f)(4). The Alliance intends these comments to be read in conjunction with comments being submitted separately by the Alliance for a Safe Alternative Fuels Environment (AllSAFE), of which the Alliance is a member. The AllSAFE comments discuss more fully our concerns regarding the concept of a partial waiver. We incorporate the AllSAFE comments here by reference."

The Alliance said further in its details comments, "Historically, EPA has never allowed conventional vehicles to use gasoline blends with more than 10% ethanol. Until very recently, neither auto manufacturers nor others had a reason to design, test or warrant conventional vehicles (intended for the U.S. market) for use with higher ethanol blends. As a result, the public and private data bases are very limited. The application presents a serious concern for automakers and consumers. It is asking for approval of ethanol blends for which the vast majority of the current fleet and the near term future fleet have not been designed or validated. Flexible Fueled Vehicles (FFVs) can handle any ethanol blend from E0 to E85, and while their numbers are growing rapidly, they still represent a minority of the fleet."

In announcing their support for the waiver, the Midwest Governors indicated that allowing greater blending levels would increase demand for conventional ethanol, an entirely domestic energy source. Michigan Governor Jennifer Granholm, chair of the Midwestern Governors Association (MGA) said, “The Midwest has vast natural resources, the scientific know-how, and the skilled workforce necessary to lead the world in the production of climate-friendly biofuels. We must capitalize on these strengths in order to promote the use of low carbon fuels across the country.”

Access a release from AIAM (click here). Access AIAM's 35-page comment submission (click here). Access the detailed 76-page comments from the alliance (click here). Access the EPA Docket for the E15 Waiver for all documents to review all comments (click here). Access the release from the Governors (click here). Access additional information from EPA's website (click here).

Grants & New 2008 Wind Technologies Market Report

Jul 16: U.S. Department of Energy (DOE) Secretary Steven Chu announced the selection of 28 new wind energy projects for up to $13.8 million in funding -- including $12.8 million in Recovery Act (ARRA) funds. The projects will help address market and deployment challenges including wind turbine research and testing and transmission analysis, planning, assessments. Along with the new awards, Secretary Chu announced the release of DOE’s 2008 Wind Technologies Market Report, detailing $16 billion in investment in wind projects made in the U.S. in 2008 -- making the U.S. the leader in annual wind energy capacity growth, as well as cumulative wind energy capacity.

DOE’s new report, a comprehensive overview of developments in the U.S. wind power market found that wind power capacity increased by 8,558 megawatts (MW) in 2008. This $16 billion investment in wind projects made the U.S. the fastest-growing wind power market in the world for the fourth consecutive year. Wind power contributed 42% of all new U.S. electric generating capacity in 2008; for the fourth consecutive year, wind power was the second-largest new resource added to the U.S. electrical grid in nameplate capacity.

The report, which has been issued annually since 2007, analyzes a range of developments in the wind market, including trends in wind project installations, turbine size, turbine prices, wind project costs, project performance, and wind power prices. The report also details trends in project financing, a key concern for the wind industry in the current economic climate, as well as trends in project ownership, public policy, and the integration of wind power into the electrical grid. DOE’s report provides the wind industry, state and local policy makers, and the general public with valuable information on the state of wind power in the United States.

Some of the key findings of the report include:

• The U.S. continues to lead the world in annual capacity growth and overtook Germany to take the lead in cumulative wind capacity. For the fourth straight year, the United States led the world in wind capacity additions, capturing roughly 30% of the worldwide market.
• The cumulative wind capacity installed in the U.S. at the end of 2008 would, in an average year, be able to supply roughly 1.9% of the nation’s electricity consumption.
• Soaring demand for wind has spurred expansion of wind turbine manufacturing in the U.S. As a result of this continued expansion, the American Wind Energy Association estimates that the share of domestically manufactured wind turbine components has grown from less than 30% in 2005 to roughly 50% in 2008, and that roughly 8,400 new domestic manufacturing jobs were added in the wind sector in 2008 alone.
• Texas led all states with 7,118 MW of total wind capacity installed, followed by Iowa (2791 MW) and California (2517 MW). Seven states now have more than 1,000 MW installed, and 13 have more than 500 MW.
• Iowa and Minnesota have the highest levels of wind penetration (in-state wind generation as a percentage of all in-state generation). Seven states have wind penetration levels greater than 5%; six utilities have in excess of 10% wind on their systems.
• Wind power remained competitive in wholesale power markets in 2008, with average wind power prices at or below the low end of the wholesale power market price range, although upward pressure on wind power prices looks set to continue.

Access a release listing the grants and link to the complete 2008 Wind report (click here).