House Committee Passes Energy/Climate Bill by 33-25

By Ucilia Wang

The House Energy and Commerce Committee on Thursday voted 33-25 to approve the American Clean Energy and Security Act, which is meant to be a comprehensive effort to curb greenhouse gas emissions through measures such as a carbon emissions cap-and-trade program.

The bill was controversial from its inception, particularly the provision dealing with the cap-and-trade program, which aims to reduce emissions from power plants, refineries, the transportation sector and others by forcing heavy polluters to pay for permits to emit.

The passage of the bill won't make it easier to win approval from the rest of the lawmakers in the House and Senate. The committee's chairman and bill co-sponsor, Henry Waxman, D-Calif., struck an optimistic tone by issuing a statement saying that he expects the bill to be enacted into law this year.

A contingent of businesses lobbied heavy for free permits even though President Obama had originally banked on auctioning off those permits to generate revenues. By the end of last week, utilities, steel and cement makers, refineries and the auto industry had won concessions and would get some permits for free. They had argued that paying for permits would hurt their bottom lines at a time when the economy is still weak.

The House committee also agreed to scale back the emission reduction goals. Instead of reducing emissions to 20 percent below the 2005 levels by 2020, lawmakers on the committee agreed to 17 percent. The bill also calls for reducing emissions to 42 percent below the 2005 levels by 2030 and 83 percent by 2050.

The push to set a national mandate for renewable electricity generation also has been tempered. Instead of requiring utilities to have 20 percent of its power mix coming from renewable sources such as solar, wind and geothermal by 2025, the current bill would require 15 percent by 2020. Utilities would be required to deploy energy-efficient measures to achieve 5 percent savings per year.

You can expect a big fight brewing as the bill moves its way through the political process. A coalition of environmental groups including Greenpeace and Friends of the Earth blasted the bill after its passage: "The resulting bill reflects the triumph of politics over science, and the triumph of industry influence over the public interest."

The solar Energy Industries Association (SEIA), on the other hand, supports the bill and noted provisions that would promote ways to conserve energy use, such as installing solar water heating systems, and encouraging solar energy system installation on federal buildings.

"The House took a major step forward today in cutting pollution while putting our economy back on track," said Rhone Resche, president of the SEIA. "This bill will invest in clean energy for the future, while creating jobs and fueling investments in the solar industry."

Comments

[Henry Buttal:]

The big losers so far here are the traditional fossil fuel industries, as they have yet to receive any free carbon credits. The cost impact on coal may be tempered by the utility free carbon credits, and the already significant price to BTU advantage enjoyed by coal.

However, I would expect no material free carbon credits for the O&G exploration and refining businesses. Expect this to impact the final cost of these products to Consumers over the long haul, especially for the refined products (like diesel and gas).

Waxman and his majority compadres, while staunchly maintaining the bill was not going to cost the taxpayers any money, also added amendments that added at least $100 million plus per year in existing and new programs.

The projections discussed on CSPAN that supported Waxman's contention that the carbon bill would not have a signifcant economic impact are laughable. Get ready to pay!

May 25 03:08 PM