NAS Warns "Risk Of Dangerous Climate Change Impacts Is Growing"

May 12: As Congress continues to engaged in divisive debates on EPA's authority to address climate change and whether the basic science of global warming is a hoax, the National Academy of Sciences (NAS), National Research Council (NRC) reiterated "the pressing need for substantial action to limit the magnitude of climate change and to prepare to adapt to its impacts." The nation's premiere science institution warned that "the risk of dangerous climate change impacts is growing with every ton of greenhouse gases emitted into the atmosphere."

 

    The nation's options for responding to the risks posed by climate change are analyzed in a new report and the final volume in America's Climate Choices, a series of studies requested by Congress. The committee that authored the report included not only renowned scientists and engineers but also economists, business leaders, an ex-governor, a former congressman, and other policy experts. Committee chair Albert Carnesale, chancellor emeritus and professor, University of California, Los Angeles said, "The goal of the America's Climate Choices studies is to ensure that climate decisions are informed by the best possible scientific knowledge, analysis, and advice, both now and in the future."

 

    The final report reaffirms that "the preponderance of scientific evidence points to human activities -- especially the release of carbon dioxide and other greenhouse gases into the atmosphere -- as the most likely cause for most of the global warming that has occurred over the last several decades. This trend cannot be explained by natural factors such as internal climate variability or changes in incoming energy from the sun. The report adds that the impacts of climate change on human and natural systems can generally be expected to intensify with warming."

 

    According to the report, while it recognized that climate change is inherently a global issue requiring an international response, the committee focused on the charge from Congress to identify steps and strategies that U.S. decision makers could adopt now.  According to a release, the report says, "A coordinated national response to climate change, which the country currently lacks, is needed and should be guided by an iterative risk management framework in which actions taken can be revised as new knowledge is gained." Committee vice chair William Chameides, dean of the Nicholas School of the Environment, Duke University, Durham, NC said, "America's response to climate change is ultimately about making choices in the face of risk. Risk management strategies must be durable enough to promote sustained progress yet sufficiently flexible to take advantage of new knowledge and technologies."

 

    According to the Committee, "Substantial reductions of greenhouse gas emissions should be among the highest priorities in the national response." Although the exact magnitude and speed of reductions will depend on how much risk society deems acceptable, "it would be imprudent to delay taking action." The Committee cited many reasons for not waiting, including that the faster emissions are reduced, the lower the risks. And because the effects of greenhouse gases can take decades to manifest and then persist for hundreds or even thousands of years, "waiting for impacts to occur before taking action will likely be too late for meaningful mitigation. Beginning emissions reductions soon will also lower the pressure to make steeper and costlier cuts later."  Carnesale said, "It is our judgment that the most effective strategy is to begin ramping down emissions as soon as possible."

 

    The Committee said, state and local efforts currently under way or being initiated to reduce greenhouse gas emissions are "potentially quite significant but unlikely to yield outcomes comparable to what could be achieved with a strong federal effort." It said the most efficient way to accelerate emissions reductions is through "a nationally uniform price on greenhouse gas emissions with a price trajectory sufficient to spur investments in energy efficiency and low-carbon technologies. Having such policies in place is crucial to guide investments in energy infrastructure that will largely determine the direction of greenhouse gas emissions for decades to come."

 

    The Committee deemed the risks of sticking to "business as usual" to be a much greater concern than the risks associated with a strong response. They said, "Most policy responses could be reversed if they prove to be more stringent than is needed, but adverse changes to the climate system are difficult or impossible to undo." It also said that "uncertainty in projecting the severity, location, or time of climate change impacts is not a reason for inaction. On the contrary, uncertainty about future risks could be a compelling reason for taking action given that abrupt, unanticipated, or more severe impacts could occur."

                                   

    The committee emphasized that, aggressive cuts in greenhouse gas emissions would reduce the need for adaptation but not eliminate it and urged the nation to mobilize now to reduce vulnerability to climate change impacts. While adaptation planning largely occurs at the state and local level, the Federal government should help coordinate these efforts and develop a national adaptation strategy.

 

    In addition, they said the Federal government should maintain an integrated portfolio of research programs aimed at increasing understanding of the causes and consequences of climate change and developing tools to limit climate change and adapt to its impacts. The government also needs to take the lead in collecting and sharing climate change information to ensure that pertinent knowledge is used to inform decisions. Public and private sector engagement through broad-based deliberative processes is essential as well. These processes should include transparent analyses of climate change information, an explicit discussion of uncertainties, and consideration of how decisions will be affected by differing personal values.

 

    The Committee said, "Because emissions reductions in the U.S. alone will not be adequate to avert dangerous climate change risks, U.S. leadership needs to remain actively engaged in international climate change response efforts. If the U.S. pursues strong emission reduction efforts, it will be better positioned to influence other countries to do the same. Given that climate change impacts elsewhere in the world may affect U.S. interests, it would also be prudent to help enhance the adaptive capacity of other nations, particularly developing countries."

                       

    The final report in the series builds upon the four previous America's Climate Choices panel reports: Advancing the Science of Climate Change; Limiting the Magnitude of Future Climate Change; Adapting to the Impacts of Climate Change; and Informing an Effective Response to Climate Change. The America's Climate Choices studies were sponsored by NOAA.

 

    Jennifer Morgan, director of the Climate and Energy Program, World Resources Institute (WRI) said, "This report, from one of America's leading scientific institutions, provides another stark reminder of the increasing risks associated with human-caused climate change. The report delivers a clear message that the federal government should take an active role in managing these very serious risks. We need policies to reduce greenhouse gas emissions, as we advance adaptation measures and develop technologies to respond to the changing world. We don't wait for the flood to arrive or the fire to spark before we buy insurance. The same should be true for climate change."

 

    Access a release from NAS (click here). Access the complete 144-page report and links to the previous reports, summaries and videos (click here). Access a release from WRI (click here) [*Climate]

House Passes Two More Bills On Offshore Drilling

Note: This posting was originally published on May 12, 2011, but was somehow deleted by Blogspot.com.

 

May 12: House Speaker John Boehner (R-OH) issued a statement praising the House for passing what he called two pieces of the Republican "American Energy Initiative" -- the Putting the Gulf Back to Work Act (H.R.1229) and the Reversing President Obama's Offshore Moratorium Act (H.R.1231). He said each bill is designed to address rising gas prices and create new American jobs.

    Speaker Boehner said, "This week, the House took another two steps in our effort to expand American energy production to help lower gas prices and create new jobs. These bills -- part of our ongoing American Energy Initiative -- will end the Obama Administration's de facto moratorium on offshore energy production, help put thousands of Americans back to work, and reduce our dependence on foreign energy. On the other side of the Capitol, Senate Democrats debated a tax hike backed by the White House that some in their own party admit 'won't lower gasoline prices by one penny.' Republicans are focused on solutions that create a better environment for private-sector job growth and provide much-needed relief to families and small businesses struggling with high prices at the gas pump. Raising taxes and imposing new barriers to job growth will do neither; increasing the supply of American energy and stopping policies that drive up prices will."

    Other pieces of the House Republican plan which have been approved by the full House include: the Restarting American Offshore Leasing Now Act (H.R.1230), passed last week, which the Speaker said will "help address soaring gas prices and create new jobs by moving forward on energy projects the Obama Administration has either delayed or canceled." Additionally, in April, the House approved the Energy Tax Prevention Act (H.R.910), aimed at "stopping the EPA from unilaterally imposing a job-crushing 'cap and trade' national energy tax." H.R.910, was essentially the same as a McConnell Amdt. No. 183 to S.493 which failed to pass the Senate by a vote of 50-50.  

    H.R.1229, sponsored by House Committee on Natural Resources Chairman, Representative Doc Hastings (R-WA) had 70 cosponsors and passed by a vote of 263-163, with 163 Democrats voting no and 28 voting for the bill. Rep. Hastings said, ""This bill will provide relief to the people of the Gulf of Mexico by allowing them to finally return to work following the Obama Administration's intentional slow-walking of drilling permits. With passage of this bill, House Republicans are sending a strong signal that we will not sit idly by while the Obama Administration sidelines American workers, sends American jobs overseas and continues to lock-up our American energy resources at a time of rising gasoline prices. I applaud the House for passing the Putting the Gulf back to Work Act and hope the Senate follows our lead to ease the economic pain in the Gulf of Mexico and help reduce gasoline prices across the country."

    H.R.1231, also sponsored by Rep. Hastings had 69 cosponsors and passed by a vote of 243-179, with 170 Democrats and 9 Republicans voting no and 21 Democrats voting for the bill. Rep. Hastings said, "A bipartisan majority of the House recognized the job creating potential of developing new American offshore energy. With unemployment at or near 9 percent for almost three years, Americans need good, high paying jobs to support their families, which is why H.R. 1231 will create 1.2 million new jobs around the country. Make no mistake, this is just as much of a job creating bill as it is an energy creating bill. The positive economic impacts of 1.2 million jobs and an additional 3 million barrels per day of American oil production will make a very real difference."

    Frances Beinecke, Natural Resources Defense Council (NRDC) president and a former member of the National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling, issued a statement on the Republican bills saying, "The House continues its reckless march toward increasing offshore drilling while totally disregarding the lessons learned from the Gulf of Mexico disaster or the fact that more drilling won't make a noticeable difference at the pump. Instead of doing Big Oil companies' bidding and granting their every wish, lawmakers ought to be following the Senate's lead in seeking to end Big Oil tax breaks and also push for solutions that can make a real difference at the pump - like encouraging the development of more efficient vehicles."

    While the House Republicans were passing their American Energy Initiative bills, House Democratic Leader Nancy Pelosi (D-CA) and other House Democrats held a press conference to unveil their "Make It In America – Clean Energy Jobs Now" initiative which they said would "lower gas prices, end taxpayer dollars to Big Oil, and invest in a stronger economy." Rep. Pelosi said, "It's a plan to invest in American energy, put consumers first, and create jobs. . . we announced [last week] the Taxpayer and Gas Price Relief Act [H.R.1748], sponsored by Congressman Bishop of New York, to eliminate those tax breaks for the five largest oil companies, saving the taxpayers $31 billion over 10 years. . . That bill, which the Republicans said no to, would save the taxpayers $31 billion over 10 years. . .

    "Today, we are putting two more measures on the table. Increasing American Energy Production Now Act -- that's being sponsored by Congressman Connolly of Virginia. And he's here to talk about enacting the recommendations of the bipartisan BP Oil Spill Commission. . . And the Building Our Clean Energy Future Now Act -- sponsored by Congressman Cicilline [D-RI] -- encouraging new alternatives in transportation and how we build our infrastructure and developing and manufacturing advanced vehicle technologies. 

    Access the release from Speaker Boehner (click here). Access a release from Rep. Hastings on H.R.1229 (click here). Access a release from Rep. Hastings on H.R.1231 (click here). Access the statement from NRDC and link to more information (click here).Access the release from Rep. Pelosi on the Democrat's plan (click here). Access legislative details for H.R.1229 (click here). Access legislative details for H.R.1231 (click here). Access legislative details for H.R.1230 (click here). Access legislative details including roll call votes of H.R.910 (click here).  Access legislative details for H.R.1748 (click here). [*Energy]

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GAO Report On Impacts Of Yucca Mountain Termination

May 10: The Government Accountability Office (GAO) released an 80-page report entitled, Commercial Nuclear Waste: Effects of a Termination of the Yucca Mountain Repository Program and Lessons Learned (GAO-11-229, April 08, 2011). The report was prepared at the request of Representative Fred Upton (R-MI), Chairman of the Committee on Energy and Commerce, Representatives Joe Barton (R-TX), Cliff Stearns (R-FL), and Greg Walden (R-OR).

    GAO indicates that spent nuclear fuel -- considered very hazardous -- is accumulating at commercial reactor sites in 33 states. The Nuclear Waste Policy Act of 1982, as amended, directs the Department of Energy (DOE) to dispose of this waste in a repository at Yucca Mountain, Nevada. In June 2008, DOE submitted a license application for the repository, but in March 2010 moved to withdraw it. However, the Nuclear Regulatory Commission (NRC) or the courts -- as a result of lawsuits -- could compel DOE to resume the licensing process. The report examines: (1) the basis for DOE's decision to terminate the Yucca Mountain program; (2) the termination steps DOE has taken and their effects; (3) the major impacts if the repository were terminated; and, (4) the principal lessons learned. GAO reviewed documents and interviewed knowledgeable parties.

    GAO reports that DOE decided to terminate the Yucca Mountain repository program because, according to DOE officials, it is not a workable option and there are better solutions that can achieve a broader national consensus. DOE did not cite technical or safety issues. DOE also did not identify alternatives, but it did create a Blue Ribbon Commission to evaluate and recommend alternatives [See WIMS 1/29/10].

 

    Amid uncertainties about the status of the repository license, DOE took an ambitious set of steps to dismantle the Yucca Mountain program by September 30, 2010. DOE has taken steps to preserve scientific and other data, eliminated the jobs of all Federal employees working on the program, and terminated program activities by contractors. DOE also disposed of property from its Las Vegas offices by declaring the property abandoned. The procedure saved DOE time and costs, according to officials. However, DOE's documentation for this process was limited, given the variety and volume of property disposed of. In addition, DOE did not finalize a plan for the shutdown, nor did it identify or assess risks of the shutdown. Both steps are required under Federal internal control standards and DOE orders. Some of DOE's shutdown steps would likely hinder progress, should NRC or the courts require DOE to resume the license application review process.

 

    GAO said that terminating the Yucca Mountain repository program could bring benefits, such as allowing DOE to search for a more acceptable alternative, which could help avoid the costly delays experienced by Yucca Mountain. However, there is no guarantee that a more acceptable or less costly alternative will be identified; termination could instead restart a costly and time-consuming process to find and develop an alternative permanent solution. It would also likely prolong the need for interim storage of spent nuclear fuel at reactor sites, which would have financial and other impacts. For example, the Federal government bears part of the storage costs as a result of industry lawsuits over DOE's failure to take custody of commercial spent nuclear fuel in 1998, as required. These costs exceed $15.4 billion and could grow by an additional $500 million a year after 2020.

 

    GAO indicated that published reports and our interviews -- with federal, state, and local government officials and representatives of various national organizations -- suggest two broad lessons for developing a future waste management strategy. First, social and political opposition to a permanent repository, not technical issues, is the key obstacle. Important tools for overcoming such opposition include transparency, economic incentives, and education. Second, it is important that a waste management strategy have consistent policy, funding, and leadership, especially since the process will likely take decades. Some Federal and other stakeholders suggested that a more predictable funding mechanism and an independent organization may be better suited than DOE to overseeing nuclear waste management.

    In its recommendations, GAO suggests that Congress consider whether a more predictable funding mechanism would enhance future efforts and whether an independent organization would be more effective. GAO also recommended that DOE assess remaining risks of the shutdown; create a plan to resume licensing if necessary; and report on Federal property and its disposition. NRC concurred with the facts in a draft of this report, but DOE strongly disagreed with the draft and the recommendations, questioning the veracity of GAO's information. GAO said it continues to believe its findings and recommendations are sound.

    Energy and Commerce Committee Chairman Fred Upton commented on the report and said, "The ongoing situation in Japan further underscores that our national security demands a coherent nuclear policy to safely and permanently store spent nuclear fuel. It is alarming for this administration to discard 30 years of research and billions of taxpayer dollars spent, not for technical or safety reasons, but rather to satisfy temporary political calculations. Now, it appears the Obama administration's work to derail the Yucca repository over the last two years may have set back our bipartisan efforts by two decades. Our nuclear future requires visionary leadership as we seek a long-term solution to our spent nuclear fuel and high-level waste." 

    Upton and Environment and the Economy Subcommittee Chairman John Shimkus (R-IL) indicated they are conducting an investigation into the Administration's decision to terminate the Yucca Mountain project. They said, "That investigation has already revealed significant internal legal and policy dissent from within the Nuclear Regulatory Commission about the administration's decision. The GAO estimates that nearly $15 billion has been spent on the Yucca Mountain repository since 1983, $9.5 billion of which has been directly collected from the public's electric bills."

    Access the complete GAO report (click here). Access the release from Rep. Upton and link to additional information (click here). Access the DOE High-Level Nuclear Waste Disposal website for more information (click here) [*Haz/Nuclear, *Energy/Nuclear]

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Senators Announce Legislation To End Tax Subsidies For "Big 5"

May 10: A group of Democratic Senators today announced legislation which they say would "finally put an end to the unfair tax subsidies that only benefit Big Oil's bottom line and CEOs." [See WIMS 5/6/11]. They said the nation's five largest oil companies (BP, Exxon, Shell, Chevron, and ConocoPhillips) have taken home nearly $1 trillion in profits over the past decade. In a release they said, "As families are paying more than $4 per gallon in gas prices and doing their part to address the country's growing deficit, Big Oil needs to step up to the plate and share in the sacrifice to help balance the budget.

    U.S. Sens. Robert Menendez (D-NJ), Sherrod Brown (D-OH), Claire McCaskill (D-MO), and Jon Tester (D-MT) announced the introduction of the Close Big Oil Tax Loopholes Act, which they said will put an end to "taxpayer handouts" to the 5 largest oil companies making record profits, and use the billions in savings to help reduce the deficit. The Senators also called on Republicans to support the effort to close the loopholes and join other Republicans, including Speaker Boehner and Representative Ryan, who have voiced support for cutting subsidies [See WIMS 4/27/11]. Reportedly, additional Senators Reid, Durbin, Schumer, Murray, Leahy, Reed, Bill Nelson, Lautenberg, and Whitehouse have also signed on to the draft legislation.

    Senator Menendez said, "At a time when families are feeling the pain at the pump and our deficit keeps growing at an alarming rate, we simply can't afford to keep giving away billions in taxpayer handouts to oil companies that are doing nothing to help lower prices. The 'Close Big Oil Tax Loopholes Act' is based on a simple premise: we need everyone to do their share to lower the deficit, not just working families and the elderly." Last week Senators Menendez and Frank Lautenberg (D-NJ) condemned legislation that passed the House of Representatives on May 5 which they said would weaken drilling standards and expedite drilling off the Virginia Coast -- less than 100 miles from Cape May, NJ. 

    Senator Brown said, "It's bad enough that Ohioans have to pay more than $4.00 a gallon at the gas pump. They shouldn't need to subsidize the oil industry through the tax code as well. Big Oil is reaping big profits while working- and middle-class Ohioans struggle to make ends meet. It's about time this corporate welfare meet its end." 

    Senator McCaskill said, "If we are going to get serious about addressing our national debt, we can no longer afford to keep giving away taxpayer's money to the most profitable companies in the world. There are going to be some tough decisions when it comes to cutting back, but I hope we can agree that our government writing checks to oil and gas companies with tax dollars should be on the chopping block." Senator Tester said, "For years, the world's biggest oil companies have slipped their way through every loophole in the book to pad their profits at the expense of American taxpayers. This bill restores fairness and holds these corporations accountable to taxpayers, who deserve no less."

    The Senators cited a recent report from Citizens for Tax Justice indicating that Big Oil companies spent most of their profits in the purchase of their own stocks and boosting their dividends between 2005-2010. In 2010, four of the largest "Big Five" oil companies (excluding BP due to the oil spill) allocated only 18 percent of their post tax profits on exploration and 60 percent on dividends and stock repurchases. The Senators released a summary of the bill as follows:

• Modifications of foreign tax credit rules applicable to major integrated oil companies which are dual capacity taxpayers. U.S. taxpayers are taxed on their income worldwide, but are entitled to a dollar-for-dollar tax credit for any income taxes paid to a foreign government. U.S. oil and gas companies have been accused of disguising royalty payments to foreign governments as foreign taxes. This allows them to lower their taxes in the U.S. The bill would close this loophole that amounts to a U.S. subsidy for foreign oil production for the Big 5.
• Limitation on deduction for income attributable to the production of oil, natural gas, or primary products thereof. In 2004 Congress enacted Section 199, the domestic manufacturing tax deduction. In 2008 Congress froze the Section 199 deduction at 6% for all oil and gas activity. The bill eliminates the Section 199 deduction for the Big 5.
• Limitation on deduction for intangible drilling and development costs. Would deny the Big 5 oil companies the option of expensing Intangible Drilling Costs (IDCs) and require such costs be capitalized. IDCs are expenditures such as wages, fuel, repairs, hauling, and supplies necessary for the drilling of oil wells. Currently, integrated oil companies can expense 70% of the cost of IDCs. The bill requires the Big 5 to capitalize all of its IDC costs.
• Limitation on percentage depletion allowance for oil and gas wells. Firms that extract oil and gas are permitted a deduction to recover their capital investment under one of two methods. Cost depletion allows for the recovery of the actual capital investment—the costs of discovering, purchasing, and developing the well -- over the period the well produces income.  Under this method, the taxpayer's total deductions cannot exceed its original investment. Percentage depletion allows the cost recovery to be computed using a percentage of the revenue from the sale of the oil or gas. Under this method, total deductions could (and often do) exceed the taxpayer's capital investment. The bill repeals percentage depletion for the Big 5.
• Limitation on deduction for tertiary injectants. Tertiary injectants are used in enhanced oil recovery to drive more oil from an existing well. Currently, oil companies are allowed to deduct the cost of tertiary injectants rather than capitalizing their costs and recovering them over time. The bill requires the Big 5 to capitalize the cost of tertiary injectants it uses during the year and recover those costs over time. 
• Repeal of Outer Continental Shelf deep water and deep gas royalty relief. Repeals Sections 344 and 345 of the Energy Policy Act of 2005. Section 344 extended existing deep gas incentives and Section 345 provided additional mandatory royalty relief for certain deepwater oil and gas production. These changes will help ensure that Americans receive fair value for Federally-owned fossil fuel resources.
• Deficit Reduction. All savings realized as the result of the bill's elimination of the tax breaks and other subsidies currently going to the major integrated oil companies are devoted to deficit reduction. They said $21 billion would be recouped over 10 years.

    Senate Majority Leader Harry Reid (D-NV) also issued a statement saying, "There's clear waste in the federal budget and the tax code.  And then there's Big Oil. We're giving billions and billions of dollars every year -- $4 billion to be exact -- every cent of it taxpayer money -- to oil companies that already are more than successful. These oil companies made $36 billion in profits during the first quarter of this year alone.  Exxon made 70 percent more this year than last year. The industry's $36 billion in quarterly profits means it's making $12 billion a month. That's $4 billion a week. And yet the U.S. government is giving these companies $4 billion a year in corporate welfare?

    "Why are taxpayers on the hook for oil companies that are doing just fine on their own? If we're serious about reducing the deficit, this is an easy place to start.  It's a no-brainer.  Let's use the savings from these taxpayer giveaways to drive down the deficit, not drive up oil company profits."

    Senate Minority Leader Mitch McConnell (R-KY) discussed the issue on the Senate Floor yesterday morning and said in part, "Every time gas prices go up, Democrats claim there's nothing they can do about it. Then they propose something completely counterproductive just to quiet their critics. This time it's a tax increase. That is the Democrat response to high gas prices: a tax hike. Well, the first thing to say about this proposal is that it won't do a thing to lower gas prices. In fact, raising taxes on American energy production will increase the price of gas. "Oh, and it would also make us even more dependent on foreign sources of oil.

    "That's not my view. That's the view of the independent Congressional Research Service, which concluded in March that the Democrat's proposed tax increase on energy production would, `make oil and natural gas more expensive for U.S. consumers and likely increase foreign dependence.' Sounds like a brilliant strategy. . ." Senator McConnell said the solution is "to develop our resources here at home"; "cut through the bureaucratic red tape that prevents companies that are authorized to explore here from getting to work"; "stop penalizing American producers with new fees and threats of tax hikes"; and "call an end to the anti-energy crusade of the EPA."

    He said, "They [Democrats] need to end an approach that hasn't changed since the days of Jimmy Carter. Just like Carter before them, today's Democrats are using the crisis of the moment as an excuse to push their own vision of the future with a `windfall profits tax' on energy companies; and just like Carter before them, they have rightly been accused of bringing BB guns to a war. This is a serious crisis. It's time for serious solutions. . ."

    Access the joint release from the Senators (click here). Access the full Citizens for Tax Justice Report (click here). Access the May 6 release from Sens. Menendez and Lautenberg (click here). Access the statement from Sen. Reid (click here). Access the statement from Sen. McConnell (click here). [*Energy/OilTax]

IPCC Report On Global Potential Of Renewable Energy

May 9: A report from the Intergovernmental Panel on Climate Change (IPCC), prepared by over 120 researchers, indicates that close to 80 percent of the world's energy supply could be met by renewables by mid-century if backed by the right enabling public policies. The findings also indicate that the rising penetration of renewable energies could lead to cumulative greenhouse gas (GHG) savings equivalent to 220 to 560 Gigatonnes of carbon dioxide (GtC02eq) between 2010 and 2050. The upper end of the scenarios assessed, representing a cut of around a third in greenhouse gas emissions from business-as-usual projections, could assist in keeping concentrations of greenhouse gases at 450 parts per million.

    IPCC said in a release that this could contribute towards a goal of holding the increase in global temperature below 2 degrees Celsius – an aim recognized in the United Nations Climate Convention's Cancun Agreements. The findings, released today after being approved by member countries of the IPCC in Abu Dhabi, United Arab Emirates, are contained in a summary for policymakers of the Special Report on Renewable Energy Sources and Climate Change Mitigation (SRREN). The summary is a short version of a roughly a thousand page comprehensive assessment compiled by over 120 leading experts from all over the world for IPCC's Working Group III.

    Professor Ottmar Edenhofer, Co-Chair of Working Group III said, "With consistent climate and energy policy support, renewable energy sources can contribute substantially to human well-being by sustainably supplying energy and stabilizing the climate. However, the substantial increase of renewables is technically and politically very challenging." The SRREN report, approved by government representatives from 194 nations, will provide input into the broader work of the IPCC as it prepares its Fifth Assessment Report (AR5) which is scheduled for finalization in September 2014.

    The report reviewed the current penetration of six renewable energy technologies and their potential deployment over the coming decades. Over 160 existing scientific scenarios on the possible penetration of renewables by 2050, alongside environmental and social implications, have been reviewed with four analyzed in-depth. These four were chosen in order to represent the full range. Scenarios are used to explore possible future worlds, analyzing alternative pathways of socio-economic development and technological change.

    The six renewable energy technologies reviewed are: Bioenergy, including energy crops; forest, agricultural and livestock residues and so called second generation biofuels; Direct solar energy including photovoltaics and concentrating solar power;

Geothermal energy, based on heat extraction from the Earth's interior; Hydropower, including run-of-river, in-stream or dam projects with reservoirs; Ocean energy, ranging from barrages to ocean currents and ones which harness temperature differences in the marine realm; and, Wind energy, including on- and offshore systems.

 

    The researchers have also studied the challenges linked to how renewable energy can be integrated into existing and future energy systems including electricity grids and likely cost benefits from these developments. While the scenarios arrive at a range of estimates, the overall conclusions are that renewables will take an increasing slice of the energy market.

 

    The most optimistic of the four, in-depth scenarios projects renewable energy accounting for as much as 77 percent of the world's energy demand by 2050, amounting to about 314 of 407 Exajoules per year. As a comparison, 314 Exajoules is over three times the annual energy supply in the United States in 2005 which is also a similar level of supply on the Continent of Europe according to various government and independent sources.

 

    According to the report, the 77 percent scenario is up from just under 13 percent of the total primary energy supply of around 490 Exajoules in 2008. Each of the scenarios is underpinned by a range of variables such as changes in energy efficiency, population growth and per capita consumption. These lead to varying levels of total primary energy supply in 2050, with the lowest of the four scenarios seeing renewable energy accounting for a share of 15 percent in 2050, based on a total primary energy supply of 749 Exajoules. While the report concludes that the proportion of renewable energy will likely increase even without enabling policies, past experience has shown that the largest increases come with concerted policy efforts.

 

    Key Findings from the Summary for Policymakers include: 

• Of the around 300 Gigawatts (GW) of new electricity generating capacity added globally between 2008 and 2009, 140 GW came from renewable energy.
• Despite global financial challenges, renewable energy capacity grew in 2009—wind by over 30 percent; hydropower by three percent; grid-connected photovoltaics by over 50 percent; geothermal by 4 percent; solar water/heating by over 20 percent and ethanol and biodiesel production rose by 10 percent and 9 percent respectively.
• Developing countries host more than 50 percent of current global renewable energy capacity.
• Most of the reviewed scenarios estimate that renewables will contribute more to a low carbon energy supply by 2050 than nuclear power or fossil fuels using carbon capture and storage (CCS).
• The technical potential of renewable energy technologies exceeds the current global energy demand by a considerable amount—globally and in respect of most regions of the world.
• Under the scenarios analyzed in-depth, less than 2.5 percent of the globally available technical potential for renewables is used—in other words over 97 percent is untapped underlining that availability of renewable source will not be a limiting factor.
• Accelerating the deployment of renewable energies will present new technological and institutional challenges, in particular integrating them into existing energy supply systems and end use sectors.
• According to the four scenarios analyzed in detail, the decadal global investments in the renewable power sector range from 1,360 to 5,100 billion US dollars to 2020 and 1,490 to 7,180 billion US dollars for the decade 2021 to 2030. For the lower values, the average yearly investments are smaller than the renewable power sector investments reported for 2009.
• A combination of targeted public policies allied to research and development investments could reduce fuel and financing costs leading to lower additional costs for renewable energy technologies.
• Public policymakers could draw on a range of existing experience in order to design and implement the most effective enabling policies--there is no one-size-fits-all policy for encouraging renewables.

    Sven Teske, Renewable Energy Director from Greenpeace International, and one of the lead authors of the report said, "This is an invitation to governments to initiate a radical overhaul of their policies and place renewable energy center stage. On the run up to the next major climate conference, COP17 in South Africa in December, the onus is clearly on governments to step up to the mark. The IPCC report shows overwhelming scientific evidence that renewable energy can also meet the growing demand of developing countries, where over two billion people lack access to basic energy services. And it can do so at a more cost competitive and faster rate than conventional energy sources. Governments have to kick start the energy revolution by implementing renewable energy laws across the globe."

    The "Energy [R]evolution" scenario -- a joint project of Greenpeace International, the European Renewable Energy Council (EREC) and the German Space Agency (DLR) -- was chosen as one of the lead scenarios of the report. Since the first edition was launched in 2005, Greenpeace has published the Energy [R]evolution in over 40 countries and developed national scenarios, as well as three editions of its global version.

    Access a lengthy release from IPCC with more details (click here). Access the 26-page Summary for Policymakers report (click here). Access a webcast of the press conference (click here). Access a website on the report for extensive background (click here). Access more information on the IPCC and the report (click here). Access a release from Greenpeace International and link to more information (click here). [*Energy/Renewable, *Climate]

President Obama Takes Energy & Oil Subsidy Issues To Indiana

May 6: Speaking to the to workers at Allison Transmission Headquarters in Indianapolis, Indiana, President Obama said, "Today there are more than 3,800 buses using hybrid technology all over the world -– buses that have already saved 15 million gallons of fuel. And pretty soon, you'll be expanding this technology to trucks as well.  And that means we'll have even more vehicles who are using even less oil.  That means more jobs here at Allison.  Last month, you added 50 jobs at this company and I hear that you plan to add another 200 over the next two years.  So we are very proud of that.  We are very happy about that. This is where the American economy is rebuilding, where we are regaining our footing. . ."

 

    He stressed that just today the latest jobs report indicated that another 268,000 private sector jobs were added in April. He said, "So that means over the past 14 months, just in a little bit over a year, we've added more than 2 million jobs in the private sector." Despite the good news he said, ". . .people are thinking, where are those new jobs going to come from, that pay well, have good benefits, can support a family? And how do we finally reduce our dependence on oil so that we're not hostage to high gas prices all the time?

    "The reason I'm here today is because the answers to these questions are right here at Allison, right here in these vehicles, right here in these transmissions.  This is where the jobs of the future are at.  We're going to have a lot of jobs in the service sector because we're a mature economy, but America's economy is always going to rely on outstanding manufacturing, where we make stuff -- where we're not just buying stuff overseas, but we're making stuff here, and we're selling it to somebody else.  And that's what Allison is all about. 

    "This is also where a clean energy economy is being built.  This is the kind of company that will make sure that America remains the most prosperous nation in the world.  See, other countries understand this.  We're in a competition all around the world, and other countries -- Germany, China, South Korea -- they know that clean energy technology is what is going to help spur job creation and economic growth for years to come. And that's why we've got to make sure that we win that competition.  I don't want the new breakthrough technologies and the new manufacturing taking place in China and India.  I want all those new jobs right here in Indiana, right here in the United States of America, with American workers, American know-how, American ingenuity. . .

 

   ". . .in the short term, we still need to do everything we can to encourage safe and responsible oil production here at home.  In fact, last year, American oil production reached its highest level since 2003.  So I want everybody to remember that if people ask -- because sometimes I get letters from constituencies saying, why aren't we just drilling more here?  We're actually producing more oil here than ever.  But the challenge is we've only got about 2 to 3 percent of the world's oil reserves and we use 25 percent of the world's oil. So we can't just drill our way out of the problem. If we're serious about meeting our energy challenge we're going to have to do more than drill. . .

 

    The President outlined the many alternative and green energy initiatives that are currently underway and said, "Of course, these investments in clean energy do cost some money, and we're going to need to find a way to pay for them. Part of the cost can be made up by putting an end to the unwarranted subsidies that we are giving oil companies right now through the tax code. I want everybody to listen here. Oil companies over the last five years, through a recession, through ups and downs, the top five oil companies, their profits have ranged between $75 billion and $125 billion. That's with a B -- not million; billion. And yet, they still have a tax loophole that is costing taxpayers $4 billion every year. Now, if you're already paying them at the pump, we don't need to pay them through the tax code. We do not need to do it. Especially at a time when we're scouring every part of the budget to try to figure out how we bring down our deficit and our debt. . .

 

    He concluded by saying, "I know that in this difficult fiscal climate, it may be tempting for some people to say let's stop investing in hybrid technology; let's stop investing in basic research; let's stop investing in the infrastructure that's needed to make sure that we can transition to new forms of transportation. That's the temptation. But I profoundly disagree with that approach. If we're going to win the future, we've got to cut out the things we don't need, but still make investments in the things that we do. . ." He said that's what people do at home. Even in hard times, they have to invest in the most important things -- He said, "Those are the things -- that's like your seed corn. You don't eat that."

 

    Despite the President's strong position to end the oil company tax credits, Republicans say removing the credits/subsidies is in effect a tax hike. On May 5, House Speaker John Boehner (R-OH) reiterated the Republican position on the FY 2012 budget and the upcoming vote to raise the national debt ceiling. He said, ". . .we will not increase the debt limit without real spending cuts and budget reforms," and added that when it comes to tackling our spending-driven debt crisis, "nothing is off the table except raising taxes." Boehner said "raising taxes will hurt our economy and hurt job creation in our country."

 

    In the meantime, Speaker Boehner and Representative Fred Upton (R-MI), Chairman of the House Energy and Commerce Committee both issued releases praising the House passage yesterday of H.R.1230, the Restarting American Offshore Leasing Now Act, with a "bipartisan vote" of 266 to 149 (33 Democrats supported) [See WIMS 5/5/11]. Introduced by Natural Resources Committee Chairman Doc Hastings (R-WA), H.R. 1230 requires the Secretary of the Interior to conduct oil and natural gas lease sales in the Gulf of Mexico and offshore Virginia that have been delayed or cancelled by the Obama Administration.

 

    Speaker Boehner said, ". . .the House has voted to restart job-creating energy projects the Obama Administration has either delayed or canceled.  The very need for legislation to move forward on projects that have already been approved shows just how far behind Washington is when it comes to expanding American energy production.  Unfortunately, the Administration remains fixated on raising taxes, which would only drive up prices further and push our economy backwards. . ."

 

    Representative Upton said, ". . . What happens when the production goes down and the demand goes up? The price goes up -- way up. Add to that the uncertainty and unrest in the Middle East, and there is no surprise that we have gas prices at $4 and $5 now in this country, and who knows where they are headed. This legislation. . . helps turn the key to unlocking the door on domestic energy production. This legislation is not about new lease sales, it simply catches up with the leases already approved." Upton supports an "all of the above" energy strategy, "a commonsense approach to meeting our nation's growing energy needs through the development of domestic energy resources, a renewed commitment to safe nuclear power, and the utilization of renewable and alternative energy technologies."

    Representative Ed Markey (D-MA), Minority Leader Nancy Pelosi (D-CA) and Representative Tim Bishop (D-NY) held a press conference on the House vote on "tax payer subsidies to big oil companies and rising gas prices." Rep. Markey said in a separate release, "Republicans passed the first part of their 'Oil Above All' energy plan today that will make oil drilling less safe, while protecting billions in tax breaks for the largest oil companies. The bill passed today would use shoddy, pre-BP-spill environmental review to accelerate drilling lease sales already scheduled by the Obama administration, and would open up new areas off Virginia's beaches to new drilling."

 

    Markey indicated that the Democratic energy package would "fight back against price gouging and close oil company loopholes that would cost taxpayers up to $53 billion. The bill would also end tax breaks for oil companies, of which the five largest earned more than $35 billion in profits in the first three months of 2011." He said, "Republicans want to keep grandfathering in tax breaks for the most profitable companies in the world, while cutting the funds to help grandma with her prescriptions," said Rep. Markey, the Ranking Member of the Natural Resources Committee, from which these bills originated. "Republicans are playing favorites with an industry that does the American people no favors by continuing to protect tax breaks. Republicans are paying for these tax breaks for oil companies by erecting a drilling rig on the Medicare program, poking holes in our nation's safety net for seniors." 

    Access the full text of the President's comments in Indiana (click here). Access Speaker Boehner's comments and video (click here). Access the Speaker's statement on H.R.1230 (click here). Access Rep. Upton's statement on H.R.1230 (click here). Access the Democrats press conference transcript (click here). Access a release from Rep. Markey with additional details on amendments that were rejected on H.R.1230 (click here). Access a release from Rep. Hastings with a brief summary of the legislation (click here). Access legislative details for H.R.1230 including the roll call vote (click here). [*Energy/OilGas, *Energy/Tax]

 

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GOP & Dems Argue Over Yucca Mountain At NRC Hearing

May 4: The House Energy & Commerce Committee, Subcommittees on Environment and the Economy and Energy and Power held a joint hearing on, "The Role of the Nuclear Regulatory Commission in America's Energy Future." The hearing included the joint testimony from Gregory B. Jaczko, Chairman, Nuclear Regulatory Commission (NRC) and three Commissioners: William Magwood, William Ostendorff, and Kristine Svinicki. Additionally, opening statements were delivered by: Energy and Power Subcommittee Chairman Ed Whitfield (R-KY); Environment and Economy Subcommittee Chairman John Shimkus (R-IL); Full Committee Chairman Fred Upton (R-MI); and Full Committee Ranking Member Henry Waxman (D-CA).

 

    NRC Chairman Jaczko indicated that the remaining Commissioner Apostolakis conveyed his regrets that he was not able to attend the hearing. Jaczko indicated that for the first time since 2007, the Commission is operating at full strength, with five members. He provided an update on the Japan situation and the NRC's response to that tragedy, and then move into an overview of the NRC.

 

    Jaczko said, "The NRC continues to characterize the status of the Fukushima site as static – meaning that while we have not seen or predicted any new significant challenges to safety at the site, we have only seen incremental improvements towards stabilizing the reactors and spent fuel pools. Given the devastating conditions at the site due to the earthquake, tsunami, and hydrogen explosions, progress at the site, while being made, is very challenging as important equipment and structures were either damaged or destroyed in the event, or are not accessible due to high radiation fields. The Government of Japan and the nuclear industry are providing significant resources and expertise to address the situation, and we will continue to provide support as needed. "

 

    On more local matters, Jaczko said, "I am pleased to report that the Commission revised and finalized the Waste Confidence rule, providing a measure of certainty in an important and high-visibility area. We believe the Waste Confidence Rule has a solid legal foundation that is clearly explained in the Commission's decision and is in full accord with earlier court decisions interpreting the Commission's obligations under NEPA. The Commission found that, if necessary, spent fuel generated in any reactor can be stored safety and without significant environmental impact for at least 60 years beyond the licensed life for operation. . .

 

    "Among the most dynamic and rapidly evolving areas is the development of small modular reactors. Just a few years ago, these projects remained largely conceptual. Today, they have advanced to the point that the agency anticipates receiving the first SMR design certification application as early as next year. . ."

 

    "On the subject of nuclear waste, storage and long-term disposal, Jaczko said, "As part of our Waste Confidence decision, the Commission initiated a comprehensive review of this regulatory framework. This multi-year effort will (1) identify near-term regulatory improvements to current licensing, inspection, and enforcement programs; (2) enhance the technical and regulatory basis for extended storage and transportation; and (3) identify long-term policy changes needed to ensure safe extended storage and transportation. As the question of permanent disposal is for the Congress or the courts to decide, the Commission has been clear that it was neither assuming nor endorsing indefinite, onsite storage by ordering these actions. . ."

 

    A release from Republican Committee members on the meeting indicated, "Listening to the Commissioners' testimony, it became apparent that Chairman Jazcko has attempted to circumvent the collegial structure of the Commission and prevent other Commissioners' voices from being heard on key policy matters including license review for the Yucca Mountain nuclear waste repository." They reminded that they had recently launched an investigation into the NRC's decision-making process on the Department of Energy's license application for construction at Yucca Mountain.

    During the hearing, NRC's processes came into question  when the discussion shifted to the NRC's pending vote on the nuclear waste site. The NRC Commissioners were due to vote on matters related to the Yucca Mountain project after President Obama set out to shut down support for the program. According to the release, "Members pressed the Commissioners on the status of those votes. Despite Chairman Jaczko's stance that the voting process will still open, several of the Commissioners testified that they had already voiced their final votes on the matter."

    Today (May 5) following the hearing, Ranking Member Henry Waxman sent a letter to Subcommittee Chairman Shimkus regarding what he called "inflammatory comments" made about Waxman's questions to the Nuclear Regulatory Commission. In his letter to Shimkus, Waxman said, "You have publicly accused NRC Chairman Jaczko of 'illegal' conduct and engaging in 'politics at its worst' for halting the license processing of the Yucca Mountain nuclear waste depository." Waxman told Shimkus that his authority as Chairman did "not extend to censoring the content of Committee members' questions. Each member has the right to review the record before the Committee and ask any relevant questions."

    Shimkus objected to a question by Waxman that Waxman said was designed to "giving Chairman Jaczko the opportunity to respond to allegations that his actions were improper." Waxman indicated to Shimkus, ". . .I believe you risk undermining the investigation by appearing to pre-judge its outcome. You stated yesterday that the Yucca investigation 'only started last week.' But even though your investigation has just started, you've already announced your conclusions regarding Yucca on several occasions over the last four months." Waxman cited several instances where Shimkus had stated that he though the NRC and Obama Administration had acted illegally in stopping funding and closing Yucca Mountain.

    Access the Republican website for the hearing and link to a background memo, opening statements, testimony and a webcast  (click here). Access the Democrats website for the hearing and link to Rep. Waxman's opening statement (click here). Access a Republican release on the hearing and links to various media reports and the letter to Chairman Jaczko (click here). Access Rep. Waxman's letter to Rep. Shimkus (click here). [Energy/Nuclear, *Haz/Nuclear]

 

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Status Of Stimulus Infrastructure Funding Two Years Later

May 4: The House Transportation & Infrastructure Committee, Chaired by Representative John Mica (R-FL), with Ranking Member Nick Rahall (D-WV), held a hearing to examine the status of the "stimulus" (ARRA, Recovery Act funding) two years later, including audit work performed by the General Accountability Office (GAO), the Department of Transportation Inspector General (DOT IG), and the U.S. EPA Inspector General (EPA OIG) uncovering lapses in oversight by the implementing agencies, mismanagement of grants and funds, and a lack of transparency. Witnesses testifying at the hearing included the: Department of Transportation Inspector General; U.S. EPA Inspector General; Government Accountability Office; and Department of Transportation Undersecretary for Policy.

 

    The American Recovery and Reinvestment Act (ARRA) was signed into law in February 2009, its supporters claiming it would boost the struggling U.S. economy by creating jobs, stabilizing state and local government budgets, and investing in infrastructure. Chairman Mica indicated that two years later, the nation's unemployment rate remains high, unemployment in the construction industry continues at a staggering 20 percent, and a significant portion of infrastructure stimulus funds remains unspent. Wednesday's hearing will examine implementation of the stimulus and the status of the $64.1 billion in infrastructure funds for programs within the Committee's jurisdiction.

 

    The EPA reported that ARRA provided U.S. EPA with $7.2 billion, roughly equal to its fiscal year 2009 appropriation, for the following six EPA programs: $4 billion for the Clean Water State Revolving Fund (CWSRF) to provide funds to upgrade wastewater treatment systems; $2 billion for the Drinking Water State Revolving Fund (DWSRF) to provide funds to upgrade drinking water infrastructure; $600 million for the Superfund Program to initiate and accelerate clean-up at National Priorities List sites; $300 million for the Diesel Emissions Reduction Act Program to accelerate emission reductions from diesel engines; $200 million for the Leaking Underground Storage Tank Program to clean up contamination from underground storage tank petroleum leaks; $100 million for the Brownfields Program to carry out revitalization projects at brownfields sites. EPA retained $71.5 million for management and oversight activities.

 

    EPA's OIG reported that, "As of April 2011, EPA reported that it has obligated over 99 percent of its Recovery Act funds. For the State Revolving Fund (SRF) programs, which account for $6 billion of its $7.2 billion Recovery Act funds, EPA stated that all of its SRF funds awarded to states were under contract or construction by the February 17, 2010, statutory deadline. We expressed concerns about EPA being able to meet this deadline, and to their credit, they accomplished this task. Additionally, EPA reported that all of its funds for Superfund projects have been obligated."

 

    EPA's OIG indicated, "Despite the billions EPA received under the Recovery Act, the OIG has detected limited fraud of EPA funds expended so far. The OIG has received fewer Recovery Act-related hotline complaints than anticipated. Recipient reporting requirements and greater transparency seem to have made a positive impact."

 

    The GAO issued a separate report entitled, Recovery Act: Preliminary Observations on the Use of Funds for Clean and Drinking Water Projects (GAO-11-642T May 4, 2011). GAO indicated that nationwide, the 50 states have awarded and obligated the almost $6 billion in Clean Water and Drinking Water SRF program funds provided under the Recovery Act and reported using the majority of these funds for sewage treatment infrastructure and drinking water treatment and distribution systems. The funds supported more than 3,000 water quality infrastructure projects nationwide. Since the Recovery Act was passed, states have drawn down $3.1 billion (79 percent) of the Clean Water SRF program funds and $1.7 billion (83 percent) of the Drinking Water SRF program funds provided under the Recovery Act.

 

    GAO said the states also met the act's requirements that at least: (1) 20 percent of the funds provided be used to support "green" projects, such as those that promote energy or water efficiency; and, (2) 50 percent of the funds provide additional subsidies in the form of loans for which the principal is forgiven, loans for which the repayment is less than the principal (negative interest loans), or grants. In the nine states GAO reviewed, Recovery Act funds have paid for 419 infrastructure projects that help to address major water quality problems, although state officials said that in some cases, Recovery Act requirements changed their priorities for ranking projects or the projects selected.

 

   In the nine states 24 percent of the funds they received to pay for projects in economically disadvantaged communities, the majority of which was provided as additional subsidies. States reported that the Recovery Act SRF programs funded an increasing amount of full-time equivalent (FTE) positions from the quarter ending December 2009 through the quarter ending June 2010, from 6,000 FTEs to 15,000 FTEs, declining to 6,000 FTEs for the quarter ending in March 2011 as projects were completed. EPA and the states are overseeing Recovery Act projects and funds using EPA's oversight plan, updated in June 2010 in response to recommendations GAO made to specify procedures for oversight.

     The Department of Transportation's (DOT) indicated that ARRA designated $48 billion for new and existing DOT programs to create and save jobs, invest in long-term growth, and improve the Nation's transportation system. Almost 95 percent of DOT's ARRA funds are distributed to FHWA, the Federal Railroad Administration (FRA), and the Federal Transit Administration (FTA) for the construction and maintenance of highway, road, bridge, rail, and transit projects. DOT said the funding had allowed 15,000 projects in all 50 states; providing 82,000 direct job-years of work and over 280,000 job-years in the overall economy considering indirect jobs.

    GAO issued a separate report on DOT funding entitled, Recovery Act: Use of Transportation Funds, Outcomes, and Lessons Learned (GAO-11-610T,  May 04, 2011). GAO indicated that it has previously reported on numerous challenges DOT and states faced in implementing the transportation maintenance-of-effort requirement, which required states to maintain their planned levels of spending over approximately 18 months or be ineligible to participate in the August 2011 redistribution of obligation authority under the Federal-Aid Highway Program. A January 2011 preliminary DOT report found that 29 states met the requirement while 21 states did not. In this report, DOT also discussed how the maintenance-of-effort provision could be improved. With regard to the high speed intercity passenger rail and TIGER programs, GAO found that while DOT generally followed recommended grant-making practices, DOT could have better documented its award decisions.

    Access the Republican website for the hearing including links to testimony and reports, background information and a video (click here). Access the Democrats website for the hearing which includes an opening statement video (click here). [*Water, *Drink, *Transportation]

Senate Hearing On Clean Energy Deployment Administration

May 3: The Senate Energy & Natural Resources (ENR) Committee, Chaired by Senator Jeff Bingaman (D-NM), with Ranking Member Lisa Murkowski (R-AK), held a hearing to receive testimony on the proposal for a Clean Energy Deployment Administration (CEDA) as contained in Title I, Subtitle A of the American Clean Energy Leadership Act of 2009 (S.1462 of the 111th Congress) [See WIMS 6/17/09]. Witnesses included: Jonathan Silver, Executive Director of the U.S. Department of Energy (DOE) Loan Guarantee Program; and representatives from the Center for Energy Policy and Finance, Stanford University; Tana Energy Capital LLC; and the U.S. Chamber of Commerce, Institute for 21st Century Energy.

 

    Chairman Bingaman indicated in an opening statement, "This legislation has been in development for several years now and has benefitted greatly from the input of many people in the private sector, including the ones here today to testify on the proposal of CEDA. The problems of bringing new energy technologies to the commercial marketplace have been documented for a long time.  In many hearings, over several years, we have heard about the challenging environment for securing investment in emerging clean energy technologies.  The high capital requirements, coupled with unavailability of affordable financing, have generally steered investments toward largely proven technologies while the real 'game changing' technologies have not been able to get the money they need. . .

 

    "Although research and development in the United States has been strong - leading to some very promising advances in renewable energy, highly fuel-efficient and electric drive vehicles, smart grid technology and ultra-efficient lighting and appliances – their transition to the commercial marketplace has been frustratingly slow. The rest of the world is working hard to accelerate this deployment cycle and, as we have heard in a hearing in March of this year, our global competitors are committing significant resources to make their countries attractive environments for clean energy technology deployment, including through financing support. . . "

 

    In relation to the current budget debates in Congress and future investments in clean energy technology, Chairman Bingaman said, "One thing I think has been made clear in the hearings we have had so far on this topic is that we should not wait in making these investments. The budgeting conventions we use here dictate that the funds set aside for CEDA within the Treasury are considered 'spent' immediately, even though any actual losses may not happen for years and could be offset by fees collected.  We need to find a way to pay for that amount when the bill comes to the full Senate. While I acknowledge that the current environment makes this difficult, and I look forward to working with my colleagues to find a suitable offset, and we should not lose sight of the fundamental cost-effectiveness of this type of financing support. CEDA will generate significant private sector spending and will finance projects that have many times the value of the actual risks taken."

 

    Ranking Member Murkowski made clear that the cost of the program would need to be offset by spending reductions elsewhere in the federal budget. She said, "This debate should be about how to make better use of all of our resources, including the revenues that result from energy production. Despite the high initial costs of creating a Clean Energy Deployment Administration, I continue to believe that it's a smarter, more efficient way for the federal government to promote clean energy technologies.

 

    "Legislation creating CEDA was voted out of the Energy Committee on a bipartisan basis last Congress. The proposal would address the persistent lack of available financing for clean energy projects. CEDA allows the opportunity to re-use its funding over time to back private lending for clean energy projects, instead of only offering one-time payments in the form of grants or tax credits as previous programs have done. It is my view that we must find an acceptable offset for CEDA. An offset will not only help CEDA become a reality; it will also help us hold the line on new spending and ensure we do not add to our national debt."

 

    The Chamber of Commerce testified that, ". . .this Committee's version of CEDA from ACELA is elegantly tailored to address the primary problem of commercializing technologies because of their newness and inherent technological risk, while doing it in a technology-neutral fashion. I must be clear, the label 'clean energy' is not reserved solely for renewables, but must be accurately applied to any and all new technologies and processes that reduce environmental impact, whether it be clean coal, advanced biofuels, natural gas vehicles, advanced nuclear, or energy storage to name a few. The ability to acquire financing is not the only hurdle to clean energy deployment. Our existing siting process has proven to be an absolute obstacle for dozens of clean energy projects. Without substantive reform to the current National Environmental Policy Act (NEPA) process, clean energy deployment will not reach its potential. . . CEDA combines a domestic energy mission with sophisticated financial risk management skills to bring emerging clean energy technologies to the market significantly faster than would occur under current market conditions."

 

    The Center for Energy Policy & Finance at Stanford University testified that, ". . .We support significant FY 2012 funding for the DOE Loan Guarantee Program to continue its important work in the near term. However, over the longer term, supporting the financing of capital-intensive energy projects with serious scale-up risks – with leadership from and in close collaboration with the private sector -- is not a good match for the current structure, oversight, risk tolerance, and financial tools of the Department of Energy. If the U.S. is to regain its competitiveness in the global clean energy technology race, commercializing energy technology innovations requires a new more effective approach – and that approach is CEDA. I would also note that political support for -- and the ultimate success of -- a national Clean Energy Standard, that this committee is currently considering and the Obama Administration supports, will be greatly enhanced if a complementary and comprehensive financing mechanism, like CEDA, is also adopted. . ."

 

    Tana Energy Capital LLC, an energy investment and advisory firm, testified that, "CEDA has a focused purpose to promote affordable financing for clean energy technologies and projects which would not get financing otherwise. CEDA will help to improve U.S. competitiveness in clean energy and reduce the cost of new energy technologies. Support for breakthrough technologies developed and deployed domestically could strengthen U.S. clean technology leadership and lay the groundwork for a competitive U.S. export market. In this time of fiscal austerity, I see CEDA as a win‐win for the American people, legislators, and energy companies alike. . ."

   

    Access the hearing website and link to all testimony and a webcast (click here). Access the statement from Sen. Bingaman (click here). Access the statement from Sen. Murkowski (click here). Access the ACELA, S.1462, which included CEDA from the last Congress including summaries, support, a report and more (click here) [*Energy/Tech]

 

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