The huge Congressional climate bill has been formally introduced, the American Clean Energy and Security Act (H.R. 2454). Over a month of discussion and heavy dealmaking has finally come to an end, recalling the famous Otto Von Bismarck quote "Laws are like sausages, it is better not to see them being made"). 

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. 

• Canada opposed our first federal purchasing requirement - Section 526 of the EISA - because it required federal agencies not to sign contracts for fuels that had higher greenhouse gases than conventional petroleum (starting the process of analyzing the pollution "lifecycle" of fuels). Throughout 2008, it actively lobbied our government and dispatched its Ambassador to ask key members of Congress to repeal the brand new section.
• Canada opposed the California Low Carbon Fuel Standard regulations, adopted last month, arguing that tar sands oil's higher emissions should not be taken into account in the "lifecycle" assessment.  It sent teams of government and industry officials to change the terms of the regulations. And again the Ambassador weighed in.
• Canada opposed the Waxman-Markey discussion draft - what just preceded the introduction of HR 2454 - because it says it sets up unfair trade barriers when in fact they are asking to be allowed to pollute more while U.S. industry brings down its emissions. It opposed the federal LCFS in the draft as well, vocally siding with the many oil companies involved in the tar sands that also targeted the LCFS.
• Canada has hired well-heeled lobbyists to do its bidding before the Administration and Congress on the tar sands. It just recently hired both President Bush and President Clinton's Press Secretaries to help "spin" tar sands oil as vital to U.S. energy security. Every briefing on the Hill is attended by a phalanx of officials from the Embassy. 
• And perhaps insignificant in and of itself, but a telling example nonetheless, an Alberta government communications official specifically attended a Washington D.C. panel to challenge three PhD scientists presenting on the impact of tar sands drilling on Boreal birds.

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.