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Posts Tagged ‘Waxman-Markey’


Tuesday, July 27th, 2010

The next two weeks will be a turning point in the future of American energy. Hanging in the balance is the fate of the wind, nuclear and solar industries.

As this excellent feature story by Laurence Hammack of the Roanoke Times details, hundreds of small amateur efforts to build wind farms around the country are finding they are unable to attract investment without a push from the federal government in the form of carbon regime legislation or a renewable energy mandate requiring utilities to buy wind and solar energy no matter what the cost.

According to the report, windmill construction has declined 60 percent this year after falling 54 percent in 2008. The figures are from the American Wind Energy Association.

In Roanoke, a project to put 18 windmills atop Poor Mountain, one of the highest ridges in the region, has stalled indefinitely. The project is being developed by a former chicken farmer and his son who entered the wind business ten years ago. The developer declined to talk to the newspaper but speculation is that investors are waiting to see what emerges from Congress.

According to a substantial school of energy forecasters, a cap-and-trade bill – which now appears moribund – would level the playing field for nuclear, wind and solar energy and likely lead to a surge of activity in all three. But a renewable standard – which is still alive – would be a disadvantageous for nuclear, giving no credit to its carbon-free energy but directing investment exclusively into wind and solar.

Senate majority leader Harry Reid has not attached a renewable mandate to the modest energy bill he is proposing but chances are strong there will be a floor revolt among renewable first proponents that may end up attaching a renewable amendment.

The Waxman-Markey bill, which has already passed Congress, has a 17 percent renewable mandate enforceable by 2020. Even if a renewable standard does not succeed on the Senate floor, it still could emerge from an energy bill conference committee.

The Highland wind project described in the article would put eighteen 44-story windmills atop one of the highest mountains in the Roanoke region to produce an average output of 12 megawatts, a piddling amount of electricity by any measure. The project would cost $80 million. (Projected out, this would cost $8 billion for 1000 MW, well in the range of nuclear but still 3-to-4 times cheaper than solar.) 

Nevertheless, Highland has spent five years running a gauntlet of federal, state and local permits plus and oppositional lawsuits. Even now it is not certain whether the project will need a permit from the U.S. Fish and Wildlife Service for possible bird and bat kills.

The lesson for the rest of the nation seems to be twofold: 1) accelerated progress on any non-carbon form of energy will be difficult without some kind of action on carbon from Congress, and 2) even the supposedly most benign forms of renewable energy will face exhaustive bureaucratic and legal roadblocks.

Nuclear is not alone in these frustrations.

Read more at The Roanoke Times


Friday, July 9th, 2010

Next week, if all goes as anticipated, Senate Majority Lead Harry Reid (D-NV) will take the first steps towards bringing an energy bill to the Senate floor with the hope that he can hammer something through before the August recess.

This could be a turning point for the Nuclear Renaissance. There are several possible outcomes that could be disadvantageous for nuclear. The worst would be if Congress decides to abandon a carbon-based approach altogether and settle for a “compromise” of a huge “renewable portfolio standard.”  Such a mandate would lead to much misallocated investment while giving no advantage to nuclear’s zero-carbon electricity.

There are several pieces of legislation already on the menu that could form the basis of the Majority Leader’s effort:

¤  Kerry-Lieberman

The bill has a very strong nuclear title, including expanded loan guarantees and a charge to the U.S. Nuclear Regulatory Commission to speed its licensing. It contains no renewable portfolio but is premised on a cap-and-trade system that applies first to utilities and later to industry.

¤ Senate Energy

Largely crafted by New Mexico Democrat Jeff Bingaman, Chairman of the Senate Energy and Natural Resources Committee, more than a year ago, the bill is “energy only,” mostly a package of incentives for wind, solar and electric cars. It was voted out of Bingaman’s Energy Committee but never made it to the floor. Getting Republican support might mean adding Kerry-Lieberman’s nuclear title plus a concession to swing Republicans.

¤ “Utilities Only”

A tripartite commission has advanced the American Power Act, which would apply cap-and-trade only to utilities.  It would avoid imposing cap-and-trade on the entire economy and concentrate most of its effects on old coal plants. This probably minimizes impacts on the price of electricity, since old coal plants are not the marginal provider. However, pivotal Republicans such as Alaska Senator Lisa Murkowski and Indiana Senator Richard Lugar of Indiana are rejecting any form of cap-and-trade.

¤ Lugar Bill

Senator Lugar has introduced his own bill, the Practical Energy and Climate Plan Act, which is “more carrots than sticks.”  The plan would add $36 billion in loan guarantees for new nuclear reactors and add more money for energy conservation.  Oil drilling and biofuels would also get a boost, but there is no provision for taxing or capping carbon.  The stick, says Lugar, would be the threat of EPA regulation of carbon emissions.  The bill has won the support of Republican Senator Lindsay Graham of South Carolina, which is significant in the Graham was a co-author of Kerry-Lieberman before withdrawing his support just as the bill was introduced.

¤ Waxman-Markey

One widely rumored option is that Democrats could adopt some mild form of energy legislation and count on having cap-and-trade revived in the Senate-House Conference Committee. Final passage could be postponed until after the November election. Cap-and-trade could not muster 60 votes in the Senate but might survive through the same parliamentary maneuver that led to the passage of health care reform. If the Democrats lose badly in November, however, political pressures against it would be very strong.

¤ EPA Regulations

Lurking in the background is the possibility that if nothing passes the Senate, the Obama Administration may fall back on having the Environmental Protection Agency impose a command-and-control carbon regime on the entire economy. Nobody seems to want this but both sides could blame each other if it becomes the end point. Many supporters of nuclear are talking about substituting a “carbon-free standard” for the “renewable standard” so that nuclear could be included. It makes sense and support for nuclear is rising, but it may be a little late in the game for such a change.

Threading the needle with something that secures nuclear’s benefits while not creating runaway incentives for other forms of energy is going to be extremely difficult. What’s your proposal for a winning strategy?


Tuesday, June 29th, 2010

By William Tucker
As President Barack Obama meets with key Senators this morning to discuss energy, the number of scenarios that could unfold in the passage of an energy bill through Congress this year keeps multiplying.

As The New York Times suggests in a lengthy article this morning, one more possibility – besides the adoption by the Senate of some form of cap-and-trade – is that Senate Democrats may pass some deliberately weak bill and then count on it being strengthened in the conference committee. Anything the Senate passes would have to be reconciled with the stronger Waxman-Markey adopted by the House. Then an up-or-down vote on the conference bill could be postponed until after the November election.

Another scenario has the Senate adopting an oil-spill bill with an energy bill attached. The main body of the legislation would involve punishing BP and improving drilling safety. Since acting against BP would be popular, Republicans would find it hard to vote against any cap-and-trade or renewable portfolio requirements that might be attached. Democrats would label them friends of the oil industry.

Beyond these strategies, the big question remains what will happen with any bill's four major provisions:  1) carbon restrictions, 2) renewable portfolio standards, 3) nuclear loan guarantees, and 4) offshore drilling regulations. If the Democrats manage to assemble one big package, as they did with health care, they might force Republicans to accept some things they don't like.

A strong nuclear title will likely be part of any package. The Kerry-Lieberman bill is very strong on nuclear, with expanded loan guarantees and a section telling the Nuclear Regulatory Commission to speed up the licensing process. Its inclusion is more than likely since- miracle of miracles – nuclear power has become something of a favorite in Congress with few anti-nuclear representatives raising their voices.

Cap-and-trade would also favor nuclear, since it would act against nuclear's main rivals, coal and natural gas. The real danger to nuclear would be a strong renewable portfolio standard -17-percent-by-2020 as in Waxman-Markey, for instance – that would exclude nuclear. This would lead to a decade of misplaced investment in wind-and-sunshine that would probably push nuclear into the background. Several Senators are urging a carbon-free standard instead of a "renewable" standard, since that would put nuclear back into the picture. In fact it is something of a mystery how proposals to generate electricity with wood instead of coal on the grounds that wood is more "renewable" ever made it into bill aimed at reducing carbon emissions.

It's high drama, with both the election and the nation's energy future hanging in the balance. After the sneak-preview offered by today's White House discussions, prime time will begin on July 12 when majority leader Harry Reid brings his oil-and-energy offering to the floor of the Senate.

Read more at the New York Times