To receive the Weekly Update via email, visit our Sign Up/Subscribe page http://www.vnf.com/news-signup.html
Commentary
Energy policy has moved to the front burner in the contest for the White House. Sen. McCain has pushed to expand off-shore drilling. Sen. Obama expresses a new openness to drilling, but only as part of a comprehensive package of funding for alternative energy, a tax credit drawn from the "windfall profits" that oil companies allegedly are enjoying, and a draw-down from the Strategic Petroleum Reserve. It is becoming increasingly clear that any future federal climate change program will need to be wrapped into a broader energy policy package . . . Massachusetts appears prepared to adopt the most ambitious emissions cap seen yet among the states . . . Officials working on Florida's climate program are investigating whether to join up with the Western Climate Initiative or the Regional Greenhouse Gas Initiative . . . With a federal climate change program now appearing inevitable, do the state and regional initiatives promote or complicate the overall national effort? Carbon market analyst Point Carbon says the latter. It released a study suggesting that the state and regional efforts will put sand in the gears without generating meaningful additional reductions.
Congress
- Obama Promises Focus on Renewable Energy,
Hybrids. In a Lansing, Michigan speech this week,
presumptive Democratic nominee for President, Sen. Barack
Obama (D-IL) outlined his principles for transforming the
economy to achieve energy independence. Sen. Obama's
speech focused on commercialization of plug-in hybrid
vehicles, which he said should be largely manufactured in the
United States, specifically Michigan. To this end, he offered
a combination of tax credits for consumers and U.S.
automakers to help make the switch to plug-in hybrid
production. Sen. Obama said he would propose extending the
renewable energy production tax credit for five years to aid
his proposal that 10 percent of the nation's energy
come from renewable sources by 2012, and 25 percent by 2025.
Additionally, he stated that he would propose to
"modernize the national utility grid" to aid in
transmission of renewable power to consumers, a hindering
factor in the development of alternative energy systems. Sen.
Obama also said that while he does not support increased
offshore drilling, he is "willing to consider it if
it's necessary to actually pass a comprehensive
plan" on energy. Sen. Obama said he would prefer to see
every American receive a $500 tax rebate, funded by the
elimination of oil companies' "windfall
profits," and the release of some light crude oil from
the Strategic Petroleum Reserve, which would be replaced with
heavier crude at a later date.
- House Bill Seeks to Prevent EPA From Regulating
Greenhouse Gas Emissions. Rep. Marsha Blackburn
(R-TN), along with other House Republicans, has introduced
legislation to prevent the Environmental Protection Agency
(EPA) from regulating carbon dioxide, methane, and other
greenhouse gas emissions under the Clean Air Act. In 2007,
the U.S. Supreme Court ruled in Massachusetts v. EPA that the
agency has authority to regulate carbon dioxide as a
pollutant under the Clean Air Act. However, EPA has not taken
any final regulatory action on greenhouse gas emissions. The
proposed bill (H.R. 6666) would take steps to reverse the
Supreme Court's ruling and favors the Bush
administration's position that the Clean Air Act is
not suitable for regulating such emissions. H.R. 6666 has
been referred to the House Energy and Commerce
Committee.
Administration
- DOE Announces Zero-Net Energy Commercial
Buildings Initiative. The U.S. Department of Energy
(DOE) announced the establishment of the National Laboratory
Collaborative on Building Technologies (NLCBT) to aid in its
launch of the Commercial Building Initiative (CBI). This
initiative will utilize cutting-edge energy efficiency
technologies as well as on-site renewable energy generation
to develop "Zero-Net Energy Commercial Buildings."
DOE said that it hopes these buildings will save and generate
enough energy to offset their energy use from the electricity
grid. The Energy Independence and Security Act of 2007
authorizes DOE to use collaborative efforts with the private
sector, other federal agencies, non-governmental
organizations, and DOE's National Laboratories to
achieve the goal of making these buildings commercially
marketable by 2025.
- Record Attendance Marks GovEnergy 2008 in
Phoenix, AZ. Sponsored by the Department of Defense,
the General Services Administration, the Department of
Energy, the Veteran's Administration and the
Department of Homeland Security, GovEnergy 2008 drew a record
crowd of 2400 to advance the federal government's
efforts to reduce its $10 billion energy bill. By Executive
Order 13423, laws enacted in 2005 and 2007, and federal
guidance and targets at individual federal agencies, the
federal government is obligated to reduce its energy use
sharply and to embrace renewable technologies. Federal energy
and fleet managers, procurement, legal and contracting
officials joined energy service companies, equipment
manufacturers, state and local officials and others in more
than a hundred training sessions and meetings designed to
share best practices and explore the strategies, methods and
technologies to meet stringent energy reduction
targets.
- EPA Denies Texas Renewable Fuels Mandate Waiver
Request. EPA denied a request by the State of Texas
for a waiver to relax the federal renewable fuels standard
(RFS) set forth in the Energy Independence and Security Act
of 2007. The RFS requires increased penetration of renewable
fuels into the nation's transportation fuel mix, with
a per year goal of 36 billion gallons of renewable fuels by
2022. Gov. Rick Perry requested the waiver in April
contending that a mandate for more ethanol in gasoline has
had a major effect on corn, food and fuel prices. However,
EPA Administrator Stephen Johnson denied the request, stating
that the mandate is "not causing severe economic
harm," a criterion for waiver approval under the Clean
Air Act. While this decision has found supporters, such as
Senator Chuck Grassley (R-IA), some environmentalists and
members of the petroleum industry continue to oppose the
expansion of ethanol use.
States and Cities
- Massachusetts Legislature Send Nation's
Toughest Emissions Cap to Governor. The
Massachusetts Legislature passed legislation that would
impose the nation's most stringent GHG emissions cap
to date. The Global Warming Solutions Act would establish GHG
emission reduction targets of 25 percent below 1990 levels by
2020 and 80 percent below by 2050. In addition to
establishing economy-wide emissions caps, the bill would
create an advisory committee to study climate change-related
issues. Massachusetts Governor Deval Patrick (D) is expected
to sign the legislation.
- Florida Analyzes Regional Cap-and-Trade
Membership. Members of Florida's
"Governor's Action Team on Energy and
Climate" are reviewing the possibility of joining the
Western Climate Initiative (WCI), a regional cap-and-trade
program comprised of seven Western U.S. states and four
Canadian provinces. The Florida officials' assessment
of the economic impacts of joining the WCI included a review
of a University of Southern California study showing that the
state could save up to $286 million in 2020 by joining the
WCI. The Action Team assessment of the WCI follows a similar
review of the economic impacts of joining the Regional
Greenhouse Gas Initiative (RGGI) that found even greater
economic benefits. RGGI is a regional cap-and-trade program
made up of 10 northeastern states. Under legislation passed
last year, Florida is developing a state-wide cap-and-trade
program applicable to the electricity sector.
- South Carolina Climate Committee Submits
Recommendations to Governor. A climate change
committee formed by South Carolina Governor Mark Sanford (R)
submitted to the Governor a set of 51 recommendations for
addressing climate change. The committee's proposal
calls for a reduction in state GHG emissions of 5 percent
from 1990 levels by 2020 through a combination of renewable
power, energy efficiency and vehicle fuel economy
initiatives. The proposal does not recommend that South
Carolina implement a state-wide cap-and-trade program or join
one of several regional cap-and-trade programs around the
country. Committee members stated that Florida should instead
wait for a possible future federal emissions trading
scheme.
Studies and Reports
- Report Finds Federal Trading Program More
Effective Than Regional Programs. A report issued by
the carbon market news service Point Carbon found that a
federal cap-and-trade program, rather than multiple regional
and state markets, would provide the best framework for
reducing GHG emissions in the United States. The report found
that the existence of multiple regional emissions trading
programs would result in higher administrative and compliance
costs and would not necessarily achieve any additional
environmental benefit. In contrast, a federal program that
preempts state and regional programs would create an
efficient and transparent market that, according to Point
Carbon, would achieve GHG reductions at lower cost while
reducing market volatility.
International
- Brazilian President Proposes Funds to Combat
Climate Change, Deforestation. Brazilian President
Luiz Inacio Lula da Silva sent to the Brazilian Congress a
proposal for two funds aimed at addressing climate change and
deforestation. The proposed Climate Change Fund would be
funded through a levy on oil production that would raise
approximately $192 million annually to support GHG emission
reduction projects and climate change adaptation. The Amazon
Fund would use donations from foreign governments and private
institutions to fight deforestation, which accounts for
approximately three quarters of the nation's GHG
emissions. The announcement of the two funds precedes the
expected issuance of Brazil's national climate change
plan later this year.
- Japanese Environment Minister Calls for Interim
Reduction of 25 Percent. Incoming Japanese
Environment Minster Tesuo Saito called for Japan to reduce
its GHG emissions 25 percent below 1990 levels by 2020. While
both Prime Minister Yasuo Fukuda and the Japanese Cabinet
have called for a long-term GHG emission reduction of 60-80
percent by 2050, the Environment Minister's statement
is the first by a Japanese government official calling for a
specific interim target. Prime Minister Fukuda is expected to
announce an interim emissions goal sometime next year.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.