The means the path has been cleared for the House Energy and Commerce Committee to take up the bill on Monday and likely to vote it out, as Chairman Waxman promised, by Memorial Day weekend.
This is a critical step in getting a bill to the President. Just a week ago, the President met with the Congressional Democrats and said 'work it out and send me a bill to sign'. This would have been an inconceivable scenario during the last eight years in spite of the growing urgency to tackle global warming pollution. The President has made energy and climate change a top policy priority (an apparently disasterous decision today on mountaintop removal aside) and there is no more important time for Congress to advance this issue.
The bill is 936 pages long, following a discussion draft of nearly 700 pages. It deals with just about every energy issue - from building energy codes and labeling, energy efficient appliance deployment, developing a smart grid, etc... But the biggest proposal is to put a cap- an absolute limit - on global warming pollution and start ratcheting that pollution down. It aims to reduce pollution by 20% by 2020, 40% by 2030, and 80% by 2050 (from 2005 levels), making progress towards what scientists say we need to do to avert the worst impacts of global warming.
While stemming global warming pollution is a key goal of this bill, it lays out the first steps in a much longer path that should bring about fundamental changes in the way we produce and use energy. It moves us towards more clean energy and energy efficiency, both through standards and through a first-time carbon cap. And although a key provision addressing carbon in fuels was removed under intense pressure from dirty oil interests, the cap will start to make winners out of companies producing clean fuels and losers out of companies producing dirty fuels, like tar sands oil strip mined and drilled from the heart of Canada's Boreal forest.
This is an opening salvo - and a critical one - in the run up to Copenhagen, where the world's leaders will meet in December to hammer out a new global warming pact.
But it is also an opening salvo closer to home. Canada has been watching the development of this legislation closely, on one hand saying that they want to adopt parallel requirements and, at the same time, saying that they are opposed to the legislation because of the burden it would place on their global warming intensive tar sands. Canada would not be covered by our cap - only Canada can adopt a cap that covers its global warming pollution - but provisions of the bill would likely affect the oil produced in the tar sands because its ultimate market is mainly in the U.S.
How would that work?
The bill puts the writing on the wall for dirty oil. The bill gives investors and others fair warning on directionality. What a cap with an 80% reduction means by 2050 is that we'll be largely off oil in our transportation sector. We'll need to be fueled by renewable sources - whether fuels or electricity. A lot more of our transportation will be connected to a greened grid.
Here's where Canada comes in. Canada has said (as per above) that it wants to move alongside the U.S. but it has yet to propose a cap or a low carbon fuel standard that would control the growth of pollution from the tar sands.
Under the U.S. cap, absence of a Canadian cap means Canada might have to buy allowances to make up for the higher carbon in producing its products. (This was included in the discussion draft and we are analyzing the latest language in the bill.) Under a LCFS - either at the state or federal level - absence of a Canadian low carbon fuel standard means that tar sands producers will have to reduce the carbon intensity of the tar sands oil anyway so that refiners, blenders and importers can comply with the fuel lifecycle reductions sprouting throughout the U.S.
California just adopted a LCFS that requires a 10% reduction by 2020 in carbon intensity from a 2006 baseline and over a dozen other states are perched to adopt similar measures. While the proposal for a federal LCFS did not survive this round, there is still much debate ahead in Congress and we're confident that states will continue to adopt them and that the EPA will act using it authority under the Clean Air Act. There is a huge amount of forward momentum on this new policy mechanism.
I'd like to say it is not clear what Canada wants - and perhaps that is true if one includes a look at the strong climate measures some of the provinces are taking - but the Federal government and Province of Alberta have made it clear. They have said protecting tar sands growth is more important than stemming global warming pollution. It's so important that Canada has repeatedly meddled in U.S. efforts to reduce our global warming pollution. Harsh criticism you might say but a review of the last year or so reveals a pattern.
The list goes on.
So the question is, does Canada plan to get serious about its global warming commitments, addressing the many woes of tar sands extraction, and evaluating whether the tar sands is the right economic engine to wage its bets on for the 21st Century?
Those questions just got a whole lot more pointed with the introduction of H.R. 2454.
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The approval of the California LCFS regulations gives a huge boost to efforts to pass a similar measure nationally. Today all eyes will turn to Washington D.C. where the House Energy and Commerce Committee will debate a national LCFS in a lead up hearing before "mark up" next week on the Waxman-Markey global warming legislation.
Low carbon fuel standards are a critical complementary measure to a cap on global warming pollution. The LCFS requires that the carbon content of fuels decline over the next decade, paving the way for lower carbon fuels, such as next generation biofuels, and other measures to reduce global warming pollution from our transportation sector. Transportation accounts for about one third of U.S. global warming pollution and cleaning up fuels is seen as one of the critical components to meeting our climate protection goals and reforming our energy use.
The beauty of the LCFS is that it is performance based. It does not pick favorites. Instead it provides a more level playing field for lower carbon fuels to compete against dirtier fuels. It does this by relying on a straight forward concept - determining how much carbon is embedded in the fuel through lifecycle assessment, an accounting measure that evaluates emissions from the production through to the combustion of a fuel.
The Canadian federal government and government of Alberta, where the tar sands are produced, lobbied strenuously against the adoption of California's LCFS, arguing that the tar sands should not be subject to lifecycle assessment that would take into account its high production emissions (tar sands production requires huge amounts of energy to clear the Boreal forest and to strip mine and drill for oil that is embedded in its soils, releasing three times the global warming pollution per barrel compared to the production of conventional oil). While Canada has argued that this is discriminatory, the opposite is true. Under California's LCFS, all fuels with a high carbon content (defined as fuels with carbon intensity of 15 grams of CO2 per megajoule of energy) will be subject to this lifecycle assessment whether they are produced in California, Venezuela, or Canada. Not to require this accounting would be giving an unfair disadvantage to lower carbon fuels and could easily wipe out the gains that California is seeking in reducing its global warming pollution.
To put this in context, NRDC analysis shows that just the incremental emissions from the tar sands production (above conventional oil) between now and 2020 could offset fully one third of the gains in national fuel economy requirements put in place in late 2007. While these fuel economy standards - mainly improving our fleet mileage for new vehicles to 35 miles per gallon - should hold our emissions on a flat line going forward, the LCFS is a critical tool in helping bring those transportation emissions down.
The main argument put forward by proponents of expanded tar sands production is that is necessary to meet our oil supply needs. But can we really afford to scrape the bottom of the barrel for the dirtiest oil on the planet? President Obama has made reducing our oil use a key policy goal. Today we borrow over $700 billion a year to buy oil. And oil saved is the best energy security policy. Our analysis shows that instead of increasing our reliance on tar sands oil, we can hold our oil use steady with fuel economy measures already in law and that we can start bringing our oil use down through measures like the LCFS, putting more plug in hybrids on the road, moving more of our transportation to the electric grid and implementing policies like "smart growth" that will reduce the miles people have to travel.
Canada is our largest oil supplier and tar sands is rapidly increasing as a percentage of this oil, but our reliance on tar sands oil is still under 1 million barrels a day out of twenty million. Surely we can work to reduce our overall oil demand so that we don't have to rely on an oil source that will make cleaning up our transportation sector so much more difficult. Instead of locking into an expansion of tar sands oil (there are several major pipelines in the permitting stage - Keystone, Keystone Xcel, and the Alberta Clipper - and a half dozen U.S. refineries expanding to take tar sands oil), we must make every effort to reduce our oil use. Already California has proven that smart conservation measures can save energy. The per capita use of electricity in California is half that of the rest of the nation. Now California is posed to show us that this can be done with transportation.
Canada has also argued that if the US doesn't buy its tar sands oil, it will send it to Asia. The reality is that getting a pipeline built from the tar sands in Alberta to the West coast of British Columbia will be extremely difficult, if not impossible. There are over 20 native tribes that are opposed to the Enbridge Gateway pipeline and it would require lifting a 15 year moratorium on tankers on the BC coast. Instead, Canada should work to clean up the hige carbon footprint of its current level of tar sands production and start addressing the many other enormous environmental problems associated with its production.
Environment Canada reported last week that Canada will miss its Kyoto targets by over 30%. The tar sands are the largest growing source of CO2 in Canada and make up more than half of the projected growth in Canada's emissions. In contrast with the 80% reduction set out in the Waxman-Markey legislation, Alberta's climate plan seeks to reduce its emissions by only 14% from 2005 levels by 2050. Canada's federal plan also allow emissions to grow rapidly from this sector. In spite of the requirements proposed, the tar sands emissions are projected to increase from 29 MMtonnes per year (current) to 80 MM and then only drop to 49 MM after 2020 - if and only if actual emissions are accomplished through controversial measures such as carbon capture and sequestration (CCS). Already the tar sands industry has shied away from committing to CCS in the tar sands, acknowledging that it is expensive and technically challenging.
California has sent an irrefutable message to all the major oil companies engaged in the high carbon fuels business. Do it at your peril. The billions of dollars slated to be spent to produce dirty fuels like the tar sands should instead be invested in clean energy and developing cleaner fuels. That is not only an environmental priority, but now a much smarter investment choice. Ask leaders in the global aviation sector. Led by Boeing Commercial Aircraft and Virgin Atlantic Airways, the Sustainable Aviation Fuels Users Group is already betting on low carbon fuels. They can see the writing in the contrails.
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I’ve worked in the environmental field for almost thirty years and it is sometimes hard to feel optimistic. Changes to our planet have accelerated rapidly during this short period of time: global warming, fisheries collapse, water scarcity, the list goes on, but I have never failed to see a way forward. Sometimes it is a state or nation with an innovative policy. Sometimes it is incremental progress at the global level. Often times, it is inspired by the campaign of one or two intrepid souls. But now we are running out of time and we urgently need to see action at all levels, simultaneously working to better protect the planet.
This imperative doesn’t seem to be lost on our new president. In his acceptance speech and inaugural address, the President referred to our “planet in peril” as one of his top concerns and has consistently listed addressing global warming and energy reform at the top of his policy objectives. But he also clearly believes that doing right by the planet and generations to come will reap immediate benefits as well. The stimulus bill and his budget invest in a nascent energy “revolution” to get us out of the economic – as well as planetary - mess we are in. No longer are environmental and energy policies sidebar issues, but have moved into a center role where initiatives on clean energy, technological innovation, and job creation are meshed into one to meet multiple policy goals.
A good example is the stimulus bill, passed in mid-February. The bill has nearly $80 billion in renewable energy and efficiency spending, a full 10th of the overall package, which represents the biggest injection of federal support for transforming the production and use of energy in our history. It will help grow this sector, cut our reliance on foreign oil (which, by the way, costs us $700 billion in borrowed money every year) and cut the pollution that causes global warming. A huge chunk of this funding will go to weatherize millions of American homes and green Federal buildings, employing people in “green collar” jobs who have lost their job in the traditional construction industry. Another example is the President’s federal budget which contains, for the first time, estimates for proceeds from a “carbon cap” – a cap on absolute levels of pollution that puts a price on the remaining carbon dioxide emissions. The proceeds will fund renewable energy, health care, tax breaks, and other items (which we want more of) and help discourage pollution (which we want less of).
Next, the President and Congress will focus on legislation that will set up this “cap and invest” system. The U.S. faces twin imperatives – getting domestic legislation passed and moving a global agreement forward that bring about steep reductions. The good news is that already 1,000 U.S. mayors and half the states have put in place their own global warming plans. It will still be a huge fight but it feels like the ground is shifting in our favor – even in these difficult economic times. Globally it will also take unprecedented leadership. Over 15 years ago, the U.S. ratified the world’s first treaty on climate change after the Rio Earth Summit. Over ten years ago, a “protocol” was added to this treaty calling on developed countries to take the first steps in reducing greenhouse gas pollution. Sadly, there has been little real progress towards reducing pollution to below 1990 levels – the stated goal of the protocol – partly because the U.S., the emitter of 25% of the world’s global warming pollution, refused to act. Now the U.S. must show that we are prepared to do our part (and that we believe it is an economic plus to act) and bring along critical countries such as China and India.
What’s required is nothing short of changing the very way we have powered our society over the last couple of centuries. We don’t have much time to mull it all over either. Scientists are warning that we have less than a decade to start reducing the pollution that causes global warming if we are to stave off the worst impacts. Certainly a world perched on the edge of catastrophic melting of our poles makes the bank bailout look like small potatoes.
But then I think of George’s comment and reflect a little on where we have come from and what I have seen work. I started my career advocating for acid rain legislation. Acid rain is mainly a side effect of burning coal and it was poisoning the lakes and streams as well as causing other damage to huge portions of the eastern United States and Canada. In 1990, the U.S. adopted legislation that cut acid rain pollution in half by requiring that “scrubbers” be installed on coal burning furnaces and put in place the first “trading system” for pollution reductions.
On the global scale, chemicals used mainly in refrigeration were literally eating away at the world’s protective ozone layer, critical for shielding the planet from cancer causing UV radiation. In the late 1980s, the United Nations shepherded through a global agreement known as “The Montreal Protocol” that phased out the use of chemicals responsible for the damage. Less harmful chemicals were developed and the hole has been gradually closing ever since.
The backdrop to these two success stories was a period of intense national and global law making in the 1970s. After the first Earth Day, our major environmental statutes were passed in rapid succession – the Clean Air Act in 1970, the Clean Water Act in 1972, the Endangered Species Act in 1973, the Safe Drinking Water Act in 1974, the Resource Conservation and Recovery Act in 1976, and the Superfund in 1980. In 1972, the first Earth Summit was held in Stockholm, Sweden. Many of our environmental treaties were adopted shortly thereafter. NRDC and other national groups were formed during this period – NRDC in the dining hall of Yale Law School – and now employ thousands of advocates working on behalf of people and the environment. Thousands more form a vibrant “grassroots” movement that continually challenges the status quo.
It is hard to imagine what our country would be like if we had not passed these statutes or invested in building this cadre of environmental activists in their support. I’ve travelled to many developing countries where the air is unbreathable and the water undrinkable. I’ve ridden in “tuk tuks” - taxis in Bangkok – whose gas tanks could explode at any moment. And, tragically, many environmental activists have lost their lives for lack of the civil liberties and democratic protections. We can’t protect ourselves against these harms without the power of the law and rules.
That system of laws and rules, and fundamentally behavior at all levels, is broadening out dramatically and will be tested like never before. The statutes of the 1970s seem almost quaint in their focus on solving problems by using technology to reduce pollution at the end of a pipe. As Tom Friedman said in his New York Times column on March 7, we are facing the point of inflection where both the Wall Street economy and the earth's natural systems are hitting the wall at the same time. Given that stark reality, the spotlight must now be on changing the very way we produce energy and food, and how much we consume.
Instead of making a better Cadillac, we have to throw it out for the Prius – or better yet, for high-speed rail and walkable communities. We need to have more “smart growth” and greener buildings. Companies should add photovoltaic panels and earthen roofs to reduce stormwater runoff and better insulate their miles of flat roofs. We’ll need to enact new treaties to control mercury and to protect the arctic as the melting ice opens it up for shipping and resource extraction. There is much to be done but there is already a beehive of activity that the President, Congress, and other nations can magnify with leadership and the right policies.
And while there is a dire imperative to these issues, there is also a huge opportunity to do things better and more fairly. Perhaps we’ll even be inspired to think more deeply about what matters most to us and what we plan to leave for the next generation and for other co-inhabitants on this miraculous planet. As George said, there is no alternative to optimism. That is a refreshing idea here in Washington, D.C. at the start of 2009.
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The second report was a report by the RAND Corporation and commissioned by the National Commission on Energy. It concluded that in spite of the dangerous global warming pollution and profligate water and energy use from further developing our transportation fuels from Canada's tar sands, they are likely to be highly resistant, unlike liquid coal, to pricing carbon. The report's author noted in a Greenwire piece, you'd have to price carbon at $250 per ton before you'd see an impact on slowing the tar sands.
So, in sum this means that investment in the tar sands is likely to continue to grow in spite of the threat of putting a price on carbon pollution. Any limitation on its development will have to come through government policy and regulation directed at its development or policies such as the Low Carbon Fuel Standard adopted by California. Pricing carbon, whether that is through a cap-and-trade system or a tax, is not likely to be enough - we need to do more and we need to do it fast.
Before we know it, this "pollution delivery system" will be constructed and Americans will never have had the chance to debate a clean energy future. All the major oil companies are busy - right now - building this system and they have gotten help in a big way from Congress. Last week, the dirty secret of the "Bailout package" was the nearly billion dollars in subsidies for refinery expansions that record-profit earning oil companies have already committed to building. And those subsidies don't require those expansions to control their carbon dioxide or other pollution.
We like to say that we are at a global warming and energy cross-roads, but that implies a choice. We need to insist that our politicians debate this choice out loud and in an accountable way rather than bury these subsidies in the fine print of a massive bill. We, the American people, know we can do better - there are all kinds of solutions from improving our infrastructure and public transportation to mass-producing plug in hybrid cars to investing in smart growth. And guess what? If we do all this, we can also help climb our way out of this mess we are in by creating good jobs for Americans in building the clean energy future.
Last week, I heard an old tax professor of mine from law school deride the bailout bill's tag-ons, like the tax relief for the production of arrowheads and bicycle commuting benefits (which actually sound good to me!) What he failed to mention were the really big ones - the billion dollar ones - that will ensure the tar sands "pollution delivery system" is delivered lock, stock and barrel to a Great Lake near you.
That is, unless you and I demand a different future.
]]>The provision-- known as "Section 526" to its adversaries and aficionados-- requires that the federal government not enter into contracts that would lead to the purchase of synthetic, alternative, or nonconventional fuels with higher global warming-related emissions than conventional fuels. The intention is to keep the government, which is the largest single fuel purchaser in the U.S., from using taxpayer dollars to buy high carbon fuels such as Canadian tar sands, liquid coal, and oil shale. This is seen as a big line in the sand for global warming advocates.
The drama played out over the last few weeks in the debate over the Defense Authorization Bill - a massive bill that is now on its way to the President to sign. Instead of repealing or weakening the language - as the Canadian government, the Department of Defense (DOD) and oil companies were aggressively pushing for - a statement accompanying the bill basically says that the provision can be implemented without change. The bill also requires DOD to report back to Congress on ways to reduce global warming pollution from these high carbon fuels. Of course, we will remain vigilent against new attacks on Section 526, but this decision in the Defense Authorization Bill debate should carry great weight.
The Defense Authorization Bill also dropped all references to long-term contracting for these fuels that could have resulted in the development of new liquid coal plants and expansion of refineries to take tar sands oil.
The irony was that while parts of DOD were arguing against Section 526, other parts of DOD were emphasizing the growing link between the nation's national security interests and the impact of global warming. The production of unconventional fuels, such as tar sands, liquid coal, and oil shale, emit more than three times the global warming pollution per barrel as conventional oil. They also use up a huge amount of water and energy, and irreversibly scar regions that are huge reservoirs of carbon, like the Canadian Boreal forest. The massive commercialization of these fuels will make our nation less, not more, energy secure. As a result, Section 526 serves a key national security purpose.
The bottom line is Americans want their government to invest in new clean energy, not dirty fuels of the past. We hope that today's victory for this "little section that could" helps give a boost to all efforts for a cleaner energy future. In this tough political environment, where chants of "drill, drill, drill!" are not uncommon, this is indeed a bright moment.
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