House floats draft of energy and climate change bill

Updated on April 1 at 6:15 a.m. PDT with comments from utilities.

Updated on April 2, 3:05 p.m. PDT to address dispute over Boehner cost estimate.

The first draft of an energy and climate change bill calls for national mandates for renewable energy and energy efficiency but leaves crucial details on carbon regulations open for negotiation.

The House Energy and Commerce Committee on Tuesday released the first draft of the American Clean Energy and Security Act of 2009, (click for PDF) which its backers hope will be voted on this summer. Key figures for the bill in the House are Rep. Henry Waxman, who chairs the Energy and Commerce Committee, and Rep. Edward Markey, who chairs the Energy and Environment subcommittee.

The document was well received by clean-energy advocates on Tuesday but panned by political foes who complained that the global warming portions of the bill will amount to an energy tax on consumers.

According to a summary document (click for PDF), major provisions of the bill are:

• A national renewable electricity mandate where utilities need to get 6 percent of power from solar, wind, biomass, or geothermal sources in 2012 and 25 percent in 2025. One-fifth of the requirement can be met with energy-efficiency measures.

• A demonstration facility for carbon capture and sequestration where carbon dioxide from coal-burning power plants is stored underground.

• Giving authority to the Federal Electricity Regulatory Commission for planning power grid modernization with smart-grid technology and upgrades to the transmission lines.

• A single federal fuel-efficiency standard and low-carbon fuel standard for biofuels.

• An "energy efficiency resource standard" to create incentives for electricity and natural gas companies to invest in customer efficiency programs.

• A global warming reduction program modeled on recommendations from U.S. Climate Action Partnership, a coalition of large corporations advocating regulation. The target is a 20 percent reduction of greenhouse gas emissions below 2005 levels in 2020, 42 percent reduction in 2030, and 83 percent cut in 2050.

• Programs to promote "green jobs," such as training, and rebates for heavily polluting industries that could be put at a competitive disadvantage from costs related to carbon regulations.

The proposals build on the significant energy and efficient-related investments already passed as part of the government stimulus package earlier this year. In general, green technology company executives and investors have said the stimulus plan can help the finance-challenged solar and wind industries in the short term and drive investment in smart-grid technologies and weatherization services.

In reaction to Tuesday's draft bill, environmental groups said that the bill moves the country in the right direction by lessening dependence on imported oil while investing in new green technologies.

"Firm limits on global warming pollution will drive investment to recharge our economy today and enhance our economic stability tomorrow. This discussion draft recognizes that we must act quickly to avoid the worst impacts of climate change and jump-start our economy with clean jobs," said National Resources Defense Council president Frances Beinecke in a statement.

House minority leader, Ohio Republican John Boehner, argued in a statement that the global warming-related portion of the bill will impose as much as $3,100 a year in energy-related costs on households during a recession.

How much and whether carbon regulations will raise electricity prices, is a source of debate. However, the author of a Massachusetts Institute of Technology (MIT) report (click for PDF), which is the source of Boehner's estimate, said that Boehner "misrepresented" the study.

MIT professor John Reilly, who published a study of cap and trade proposals in 2007, on Wednesday sent a letter to Boehner saying that actual number is closer to $340 per household per year, or about ten times less. (Click here for text of entire letter). The Republican party published a release on Thursday defending its cost estimate.

The cost of enacting climate change regulations remains a difficult question both practically and politically. The energy bill draft does not propose a specific mechanism for how a price is fixed to carbon dioxide emissions by heavy polluters. Some observers expect that an energy bill will only be passed this year if climate regulations are separated out.

At least two utilities on Wednesday supported the bill. Lew Hay, CEO of Florida-based FPL Group, a significant investor in wind and solar energy, said in a statement that the bill is a "bold blueprint" to confront "a triple threat of challenges: an economy in recession, an overdependence on foreign energy, and a warming planet."

While touting its actions on energy efficiency, National Grid also applauded the bill for addressing climate change but added that the entire country now needs a "clear framework" to reduce carbon emissions.

For more reaction to the draft bill, see the The New York Times, GreenWire, and Dow Jones.

[Atlas_]

This is just what our economy needs, MORE TAXES and HIGHER PRICES!!

the taxes aren't the worst part, the real problem with this bill, and any bill that limits American CO2 emissions is that USA isn't the problem. China produces more CO2 than we do, and by 2050 China will produce more CO2 than the rest of the world COMBINED.

Nothing we do on CO2 regulation matters as long as China is left out of the equation.
China's per person CO2 levels are low compared to the USA, but when (not if, but WHEN) China's CO2 per person levels come near that of the USA or Europe THAT is when you will see the Global CO2 levels completely OFF THE CHARTS.

The atmosphere doesn't care who makes the CO2 or how many people it took to make the greenhouse gasses.

Bottom line - We pay taxes and higher energy prices to stop something that can't be stopped because China is given a free pass. Thanks Obama, Thanks a lot.

[George_Marenco]

Global Warming is a fraud.

[BogusBasin]

It's really hard to take anyone seriously that uses words like communist, radical, destroy our country and so on. More of the same, same, same grand OLD party talk. Obama was voted in to do exactly what he is doing. I am very very happy you don't like it. That means we are on the right track. Whether greenhouse gases cause global warming or not (They do), we need to make the tough decisions now. I am so glad to see your party fading quickly into obscurity. Amen

[sythara]

Oh please. During the Bush administration, people like you were raving on how he was going to destroy our country, our freedoms, and our way of life. Now the other wing is doing the same exact thing. Now calling Obama a communist is uncalled for, I know a thing or two about communism and he is not. He simply stands for socialist agenda, and if you can't see it, then perhaps you need to do a study on parallels between how things are now and how USSR's government was during mid 80s during "perestroyka" (restructuring) era.

Do we need to make tough desisions now? Really? How about a tough desision to get a second job so you can afford morgage? Or tough desision to lower the standard of living due to economy? Sure CO2 emissions are bad. Sure pollutants in the air are bad. I agree that anytime you pollute the planet you're making ti worse for everyone.

But why should we limit our economy and possibility for expansion during these hard economic times? Loosen restrictions now so we can all recover. Once that is done, resinstate the regulations and work globally with the biggest CO2 producers in the world to come up with a solution to this pollution problem. Don't just "lead the way" hoping other countries will follow. All that will do is have them laugh at us.

I don't care if you agree that global warming is man caused or not, its irrelevant at this point. What is relevant is that we need to be more efficent in energy consumption and production, not for ideological reasons but for economic and capitalist reasons. If you can light your house for half the cost you normally would, why wouldn't you?

But big Government isnt the solution in this. Businesses should be making this choice in efforts to save money and keep jobs in America. Not Government. Face it, the only thing the Government knows how to do (aside from the military) is hwo to spend money on unnecessary things.

[BogusBasin]

I am willing to pay more for my energy in exchange for lower emissions. I wish the cost of gas would go to $10/gallon. Business has just one agenda: profits. If you are looking for them to do anything that doesn't benefit the bottom line, you are naive. Government is the only solution when the right decision is not the same as the most profitable solution. You have been drinking the corporate kool-aid my friend. I repeat, the only thing a corporation knows how to do is increase their profits. They don't care about you, your family, or the planet. Therefore, we must rely on our government. Leaving things up to the corporations leads to the greed and corruption that got us into this mess. Amen

[VikesFan10]

Bogus...,
If we follow your view that business shouldn't make a profit, how do you pay for your $10/gallon gas? If the business doesn't make a profit, it can't stay in business and there will be no jobs for the employees. With no jobs, there will be no money to buy gas or even politically correct products. But if your view is to make them all non-profit businesses, what do they do when their equipment breaks? Since they have no profits, they have no funds for unexpected expenses. Does the govt need to supply all businesses with their equipment? Or is your plan to have all of us work for the govt? If a business is making obscene profits, you should start your own business and sell the same product or service at a more reasonable rate. Then you will make a profit, and the evil company will be forced to make less profit or go out of business. You will be making life better for your customers and providing jobs and you can make a profit and spend it on whatever you want, like carbon credits. That competition and innovation is what gives us the opportunity and made us the land of opportunity. Rewarding hard work, productivity and innovation is good. If somebody breaks the law, prosecute them. If they charge too much go elsewhere. If there is nobody else, there is opportunity. That is where the American Dream was born. When I look at the science and the history, I see a scam in the Global Warming movement. And the leaders of the movement seem to be making a lot of profit by selling fear. Keep investing in R&D and maybe someday oil will be replaced by something that can compete economically and feasibly. If we remove the fear of Global Warming/Climate Change, then it is frightening to me that we are losing our independence to our own govt. Exxon is held up as the enemy for making "obscene profits". Look up how much the govt takes out of a barrel of oil and compare that to how much Exxon makes. That is obscene. Efficiency is good. Competition leads to higher efficiency, which improves the bottom line.

[Atlas_]

you people are just rearranging the chairs on the deck of the titanic with this back and forth. Stay focused.
The USA is no longer the problem (China is the new king of CO2). If we allow ourselves to be taxed for CO2 and let China increase it's CO2 output as they plan, the only thing that will have been accomplished is crippling the worlds only democratic superpower and GIVING all that power over to the Chinese Communist Party, both economically AND militarily.

I would love to see all these climate warriors just TRY and protest the Chinese. In the USA we use words and votes to sway opinion.

China uses Tanks and Bullets (that famous video of the student staring the tank down, yeah he got squished in real life, find the uncensored version of that video)