Weathervane: A Climate Policy Blog from Resources for the Future

Aug26

The President’s Task Force on CCS: It’s Going To Be Pretty Expensive

Six months ago President Obama set up a task force of federal agencies to look into a central issue in the strategy to slow climate change. Technologies exist to capture the carbon dioxide that coal-fired power plants emit into the atmosphere. What’s required, the president asked, to get those technologies deployed rapidly and widely?

The task force has now given him his answer.

“The lack of comprehensive climate change legislation is the key barrier to CCS (carbon capture and sequestration) deployment,” its report said. “Without a carbon price and appropriate financial incentives for new technologies, there is no stable framework for investment in low-carbon technologies such as CCS.”

Nearly half of this country’s electricity is generated by coal, and the resulting smoke contains a third of the country’s total emissions of carbon dioxide. Those two statistics make CCS crucial to any serious attempt to control global warming. But capturing the carbon dioxide and storing it permanently underground is expensive and, the task force makes clear, would have a very substantial impact on electricity prices.

In a paragraph discreetly tucked into an appendix, the task force warned:

“Recent studies conducted by NETL (the National Energy Technology Laboratory) show that current technologies are expensive and energy-intensive, which seriously degrade the overall efficiency of both new and existing coal-fired power plants. For example, installing the current state-of-the-art post-combustion CO2 capture technology --- chemical absorption with an aqueous monoethanolamine (MEA) solution --- is estimated to increase the levelized COE (cost of electricity) by 75 to 80 percent.” That estimate apparently does not include the costs of transporting the gas to the burial site and disposing of it there.

At present power utilities can emit carbon dioxide into the sky without cost. Putting a price on carbon means imposing a tax or fee on those emissions, and setting it high enough to give the utilities an incentive to pump the emissions underground instead.

“Cost estimates for employing current technologies on new and existing fossil energy power plants in terms of cost per tonne of CO2 avoided, range from $60 per tonne for IGCC (integrated gasification combined cycle), $95 per tonne for PC (pulverized coal) to $114 for NGCC (natural gas combined cycle),” the task force reported.

The task force, headed by the Department of Energy and the Environmental Protection Agency, included 14 federal agencies.

“Up to 10 integrated CCS demonstration projects supported by DOE (the Department of Energy) are intended to begin operation by 2016 in the United States,” it told the president.

“Even with financial support,” it said, “challenges such as legal and regulatory uncertainty can hinder the development of CCS projects. Regulatory uncertainty has been widely identified as a barrier to CCS deployment…. Experience gained from regulating and permitting the first five to 10 CCS projects will further inform potential changes to existing requirements and the need for an enhanced regulatory framework for widespread CCS deployment.”

J.W. Anderson is Resources For the Future’s journalist in residence.

Published: Aug-26-10 | 0 Comments

Aug12

The Evolution of FutureGen: Latest Turn in a Long Story

CCS, FutureGen, Obama Administration

On again, off again, and now …

FutureGen first appeared seven years ago as a dramatic proposal to demonstrate technologies that could burn coal without emitting carbon into the atmosphere. After many bumps and halts in the road it reappeared Friday in its latest form, as a proposal to rebuild an existing Illinois power plant. Some of the technology will be less complex, but it will still be designed to capture and sequester some 90 percent of the carbon it emits.

The new concept is less spectacular than the original one, but wiser and more useful. The story of FutureGen has become an illustration of the perils that a government encounters when it tries to push a new technology.

After launching FutureGen with much fanfare in 2003, the Bush administration went through a long site selection process and then, in early 2008, suspended the project entirely. The reason given was the rapid escalation of cost estimates. But there may have been second thoughts on other points as well. The previous year the high-powered MIT Study on the Future of Coal had strongly warned that one project with one technology would have little credibility. It urged the government to support a range of different projects experimenting with varying types of coal, varying generating systems and varying geological formations for the underground storage of carbon dioxide.

But the MIT study also emphasized that the carbon capture and sequestration technology (CCS) was critical to any realistic hope of slowing global warming. Both China and the United States—the two leading sources of the world’s carbon emissions—have massive reserves of coal and steadily rising demands for electric power.

When President Obama took office his administration restarted the planning and design preparations for the FutureGen plant, promising a final decision whether to proceed in early 2010. Instead, last February, the White House announced a task force to develop within six months a plan for the “widespread, cost-effective deployment of CCS within 10 years, with a goal of bringing 5 to 10 commercial demonstration project online by 2016.”

The task force brought out its report on August 12, warning that CCS would be widely deployed only if and when driven by a national policy to reduce greenhouse gases. But on August 5 Energy Secretary Stephen Chu and the senior senator from Illinois, Dick Durbin, announced an award of $1 billion for FutureGen. This time it intends to refit a plant owned by Ameren Energy Resources in Meredosia, Ill., to burn coal with pure oxygen. The resulting carbon dioxide would then be carried by pipeline to the original site of the project, Mattoon, Ill., and injected underground there. The reason for the long pipeline is that much work has already been done in Mattoon to assure that the geology can store the gas safely and permanently.

The Energy Department’s decision to shift from construction of an entirely new plant to retrofitting an older one may well be a response to advice from the MIT group, among others, who reminded the administration that power plants have very long lives. If the administration wanted to have an impact on carbon emissions that is both significant and timely, the MIT scholars emphasized, it would have to demonstrate success in refitting plants that are already in use.

J.W. Anderson is Resources for the Future’s journalist in residence.

Published: Aug-12-10 | 0 Comments

May05

From the Gulf of Mexico, Questions About Oil

Obama Administration, Oil

It’s much too early to try to predict the impact of the massive oil spill in the Gulf of Mexico. But it’s not too soon to start thinking hard about it—and what the response ought to be.

Obviously the cap-and-trade bill to restrain climate change will be delayed. The Obama administration says that there will be no more talk of expanding offshore drilling until it knows exactly what went wrong in the Gulf, and how a repetition can be prevented. That isn’t likely to be soon. But the proposed new ocean drilling policy is—or at least was—part of an intricate structure of compromises and concessions built to win crucial votes in the Senate for the climate legislation.

Oddly, the disaster in the Gulf has one thing in common with 2008's financial crash on Wall Street. Both happened despite assurances from industry that new techniques and technologies had made these failures impossible. In both cases, managers told investors, the government and the public that they had developed procedures and devices that all but eliminated risk. As a result public policy in both cases is going to be strongly influenced by the evidence that neither the banks nor the oil companies understand their new technologies as well as they thought they did.

The memorable oil spills of the past, most notably the one off Santa Barbara in 1969, generated important support for stronger environmental protection. But the current spill in the Gulf ought to force a deeper issue: How much oil do we really need, and to what lengths should we go to find it?

At one time Americans thought that there was a fixed relationship between oil production and economic growth. But in the oil crises that began in 1973, we learned that the country could get along with considerably less oil than we had thought. Currently this country consumes little more oil than it did four decades ago. Today we are using only 40 percent as much oil to produce a dollar’s worth of Gross Domestic Product as we did in 1973. And yet most of that progress was made in the first decade after the oil crises began. As the memory of the lines at filling stations began to fade, so did the determination to do more with less fuel.

With the rise of the big developing countries, the world’s consumption of oil is going up steadily and the hunt for new resources is accelerating. The message from the Gulf of Mexico is that drilling in deep water involves risks that the explorers do not yet fully comprehend and a mishap on the ocean floor, under a mile of water, is extraordinarily difficult to fix.

One consequence of this tragic accident will necessarily be to raise once again the basic question whether it might not be safer, as well as cheaper, to reduce consumption on dry land rather than to speed up drilling under the sea.

J. W. Anderson is Resources for the Future’s journalist in residence.

Published: May-05-10 | 0 Comments

Apr06

The Unintended Consequences of Expanded Offshore Drilling

Obama Administration, Oil, Natural Gas

After nearly a week of grumbling, measured praise, and ample head scratching by policy wonks, it looks as though the real outcomes of President Obama’s plan to expand offshore oil development could be more modest than they seemed at first blush.

Still, as is the case with all policymaking, it’s important to consider the possible unintended outcomes of expanding and increasing U.S. offshore oil and gas production, as RFF Vice President for Research and Senior Fellow Mark Cohen pointed out with his response to the most recent prompt at National Journal’s Energy and Environment Expert Blog:

While there might be important political reasons for expanding offshore oil exploration, the president's proposal to increase offshore drilling is unlikely to have a significant effect either on the supply of natural gas or on energy security in the U.S. In fact, the end result might simply be to increase greenhouse gas emissions.

Most of the offshore gas is relatively expensive to bring to market, and the recent technological innovations that significantly lowered the cost of recovering abundant shale gas resources are likely to make the offshore areas a less attractive source of natural gas supply. Thus, unless there is a substantial expansion of natural gas demand beyond what is currently forecast, we are unlikely to see major increases in offshore drilling for natural gas.

The situation with offshore oil, however, might be considerably different. If it is profitable to produce oil from these offshore areas, it might increase our oil security somewhat. However, as a recent RFF study, "“Reassessing the Oil Security Premium,” by Stephen Brown and Hillard Huntington shows, there are two effects to consider when we increase the supply of U.S. produced oil. Certainly producing more oil in the U.S. will reduce our dependence on foreign oil and increase the stability of our oil supply. However, partly offsetting this positive effect is the basic law of supply and demand. New oil supplies will lower the price of oil on the world market, which will increase oil consumption in the U.S. This partly offsets the energy security benefit of new oil production in the U.S. because increased oil consumption increases the economy's exposure to supply disruptions. In other words, each new barrel of oil production does not necessarily result in one less barrel of oil imports. This doesn't mean that there are zero energy security benefits, however. Netted out, the Brown and Huntington estimates suggest that the effect of increased U.S. oil production is about $1 per barrel (or 2.4 cents per gallon of gasoline); for each barrel of increased U.S. oil production, the risk to the U.S. economy of supply disruptions is reduced by an expected value of about $1.

The story for greenhouse gas emissions, however, is not so rosy. It is important to realize that policies that enhance energy security do not always result in lower greenhouse gas emissions. In some case, policies are complementary, but oftentimes a policy that enhances energy security results in higher greenhouse gas emissions. In fact, that is true with offshore oil drilling. Nearly all of the increase in U.S. oil production will result in increased oil consumption somewhere in the world, which will likely result in a net increase in CO2 emissions. The bottom line is that the president's policy might have a small positive effect on energy security, but might ultimately increase—not decrease—greenhouse gas emissions.

Published: Apr-06-10 | 0 Comments

Feb17

Standing Behind Market-Based Reductions

Cap and Trade, Carbon Market, Obama Administration

Smokestack image courtesy Squeaky Marmot via Flickr Despite ample conjecture that another approach may be more politically palatable, the president’s top economic advisors are endorsing a market-based approach to emissions reductions as an engine for positive environmental and economic change. As part of the 2010 Economic Report of the President, the Council of Economic Advisors (CEA) suggests the president work to implement a cap-and-trade system to control greenhouse gas (GHG) emissions as a means to provide a solid economic footing to push toward a low-carbon future.

Citing the work of RFF researchers, among others, the CEA report underscored the importance of putting a price on carbon. A price, they write, allows firms to decide the best and most-affordable ways for them to reduce their emissions.

Still, given current and projected economic conditions, it will be important to ensure a cap on emissions is put in place with minimal harm to firms’ bottom lines. According to CEA officials, policymakers have a number of tools at their disposal to keep cap and trade costs under control and help firms transition to a low-carbon future:

Banking and Borrowing: Policymakers can allow firms to purchase and save emissions permits, as suggested in the House’s Waxman-Markey bill, giving purchasers the flexibility to decide when it’s most prudent to use the allowance and when another path could help them meet their reductions targets.

Price Ceilings and Floors: Provisions to keep market fluctuations in check could also help firms keep costs contained. Where banking would allow emitters to even out costs over time, limits on maximum and minimum permit price—ceilings and floors, respectively—could provide some framework for cost projections. Combing price ceilings and floors to create what’s known as a price collar could significantly reduce costs when compared to a cap-and-trade program without such mechanisms, according to recent RFF research cited in the CEA report.

Offsets: Allowing reductions from a sector not subject to the U.S. emissions cap is yet another way to help find the lowest-cost approach to reductions. While the authors of the CEA report say offsets can be a useful tool, they are quick to point out the importance of ensuring any offsets are real and can be verified. Absent verification, could emitters simply be paying for reductions that never occur and undermining the integrity of the cap.

The CEA report went on to point out that global cooperation will be essential to addressing climate concerns and that while the U.S. can’t act alone to address the problem, it must act.

Tiffany Clements is managing editor of Weathervane.

Published: Feb-17-10 | 0 Comments

Feb08

Obama Shifts and Speeds up Clean Coal Strategy

CCS, FutureGen, Obama Administration

President Obama set up a federal task force on Feb. 3 to accelerate the development of technologies to capture and store carbon emitted by coal-fired electric utility generators. It looks as though the administration is having second thoughts about a clean-coal strategy that depends crucially on one pilot project, the plant dubbed FutureGen.

The president's memo directed the task force to prepare a plan in 180 days "to overcome the barriers to the widespread, cost-effective deployment of CCS (carbon capture and storage) within 10 years, with a goal of bringing 5 to 10 commercial demonstration projects online by 2016."

That is an extremely ambitious target. The reason for the urgency is that no one has come up with a plausible way to meet this country's growing demand for electricity without continuing to rely heavily on coal. Any progress in slowing climate change consequently depends on finding ways to burn coal without emitting carbon dioxide into the atmosphere.

Responding to that logic, in 2003 President George W. Bush launched FutureGen as a public-private partnership to build a plant that would demonstrate CCS. His administration canceled it in early 2008, on grounds that it would be too expensive. Obama's energy department restarted the planning process last year, promising a final decision early this year on whether to proceed with construction. But there was no mention of FutureGen in the president's recent memo.

The president may be heeding advice from technical experts—offered repeatedly over the past several years— that focusing the whole policy on one experimental plant would be a serious mistake.

"America's Energy Future," a report published last summer by the The National Research Council, warned:

Too little is known at present to determine which power-generation technologies and which storage options could best produce electricity after 2020 if carbon emissions were constrained. Reliable cost and performance data are needed, both for capture and storage, and they can be obtained only by construction and operation of full-scale demonstration facilities... Because of the variety of coal types and the myriad of technology-conversion options for coal, natural gas and biomass fuels, a diverse portfolio of demonstrations of CO2 capture technology will actually be required. Similarly, to sort out storage options and gain experience with their costs, risks, environmental impacts, legal liabilities, and regulatory and management issues, it will be necessary to operate a number of large-scale storage projects in a variety of subsurface settings.

The NRC committee that wrote this report also said that if the country makes an immediate start it should be possible to gain the necessary information and get 10 gigawatts of CCS generation in place by 2020.

The Obama administration is also well aware that CCS projects are already under way in many other countries, notably in Europe and China, and further indecision here risks putting the U.S. at a technological disadvantage.

The president's memo contained a reminder that passage of cap-and-trade legislation, which would put a price on carbon emissions, will be necessary to induce utilities to use CCS technology. "Ultimately," the memo said, "comprehensive energy and climate legislation that puts a cap on carbon pollution will provide the largest incentive for CCS because it will create stable, long-term, market-based incentives to channel private investment in low carbon technologies."

J. W. Anderson is Resources for the Future’s journalist in residence. He previously explored FutureGen in this Weathervane post and this 2008 Weekly Policy Commentary.

Published: Feb-08-10 | 0 Comments

Feb04

Administration Doubles Down on Biofuels, CCS

Biofuels, CCS, EPA, FutureGen, Obama Administration

Striking while the post-State-of-the-Union/budge release iron is hot, President Obama Wednesday unveiled details of his administration’s plans for the next generation of energy technology. With the FY 2011 budget backing loans for the development of nuclear power plants eating up several days of the news cycle, yesterday’s announcement shifted energy and environment watchers’ gaze toward biofuels and carbon capture. From the Environmental Protection Agency’s release:

The EPA has finalized a rule to implement the long-term renewable fuels standard of 36 billion gallons by 2022 established by Congress. The U.S. Department of Agriculture has proposed a rule on the Biomass Crop Assistance Program (BCAP) that would provide financing to increase the conversion of biomass to bioenergy. The President’s Biofuels Interagency Working Group released its first report – Growing America’s Fuel. The report, authored by group co-chairs, Secretaries Vilsack and Chu, and Administrator Jackson, lays out a strategy to advance the development and commercialization of a sustainable biofuels industry to meet or exceed the nation’s biofuels targets.

In addition, President Obama announced a Presidential Memorandum creating an Interagency Task Force on Carbon Capture and Storage to develop a comprehensive and coordinated federal strategy to speed the development and deployment of clean coal technologies. Our nation’s economy will continue to rely on the availability and affordability of domestic coal for decades to meet its energy needs, and these advances are necessary to reduce pollution in the meantime. The President calls for five to ten commercial demonstration projects to be up and running by 2016.

The EPA’s move on biofuels puts the Obama administration in compliance with the Energy Independence and Security Act of 2007 (EISA) but finding the right alchemy of fuels to meet the standard is likely to be a subject of political and logistical debate, not to mention the difficulties in calculating the GHG implications.

As for CCS, yesterday’s announcement regarding the proverbial “clean coal” marks some of the first official murmurs from the White House on the technology since it announced its plans to kick FutureGen back in gear last summer. I’ll be interested to see what the president’s task force can pull together in a 180 days that will put CCS within reach in the next five years.

Tiffany Clements is managing editor of Weathervane.

Published: Feb-04-10 | 0 Comments

Feb02

2011 Energy Funding Forecast: Sunny, Breezy with a Chance of Nuclear

Obama Administration, Congress, Subsidies, Oil, Renewables

Given the scope of problems associated with climate change—economic, environmental, foreign and domestic concerns, to name a few—it seems virtually every federal department plays some part in President Barack Obama’s policy response. Here’s a look at where climate and energy issues have cropped up in the president’s FY 2011 budget proposal.

Environmental Protection Agency

Even in the absence of accounting for a federal cap and trade program—a move some see as an acknowledgement of cap and trade’s demise—the budget throws some $44 million toward the EPA’s efforts to regulate greenhouse gases under the Clean Air Act. Moreover, it seeks to help states do the same.

The Office of Management and Budget sums up the EPA’s climate change mitigation requests:

$21 million—an increase of $4 million from 2010—to implement the Mandatory Greenhouse Gas Reporting Rule and ensure the availability of high-quality emissions data.

$56 million—including $43 million in new funding—for the EPA and states to address climate change effectively through regulatory initiatives to control greenhouse gas emissions

$25 million to aid states in permitting activities for greenhouse gas (GHG) emissions under the New Source Review and Title V operating permits programs

$7 million to develop New Source Performance Standards (NSPS) to control GHG emissions from major stationary sources

$6 million in new funding to implement the 2010 light duty vehicle rule and to develop regulations for large mobile sources

$5 million to develop guidance regarding the best available practices and technologies to control GHG emissions under permitting programs

Department of Energy

The DOE’s budget requests underscore a strong political will to wean the U.S. economy off fossil sources (and make good on G20 commitments) by cutting $36 billion worth of fuel subsidies and shift renewable energy sources with requests for investment in wind and solar energy research.

But, perhaps most notably, the proposal makes a strong statement about U.S. nuclear power, guaranteeing $55 billion in loan funding to build new nuclear power plants and recording a departmental goal to “Commit (conditionally) to loan guarantees for two nuclear power facilities to add new low-carbon emission capacity of at least 3,800 megawatts during 2010.” Reaction to the news has been predictably mixed. (And—I assume since he didn’t address the budget directly—predictably satirical from Stephen Colbert.)

OMB breaks down DOE requests further:

$36 billion in new loan authority – for a total of $54.5 billion – to expand support for DOE loan guarantees for nuclear power facilities.

$500 million in credit subsidy to support $3 billion to $5 billion in loan guarantees for innovative energy efficiency and renewable energy projects.

$144 million for research, development, and demonstration activities to modernize the grid including smart-grid technologies that will spur the transition to a smarter, more efficient, secure and reliable electric system, resulting in energy- and cost-saving choices for consumers, reduced emissions, and growth of renewable energy sources.

$4.7 billion in clean energy technology investments at DOE, including:

Nearly $2.4 billion, an increase of $113 million, for energy efficiency and renewable energy programs including $302 million for solar energy, $220 million for biofuels and biomass R&D, $325 million for advanced vehicle technologies, and $231 million for energy efficient building technologies.

$545 million for advanced coal climate change technologies to focus resources to develop carbon capture technologies with broad applications to advanced coal power systems, existing power plants, and industrial sources.

$300 million for the Advanced Research Projects Agency–Energy to accelerate game-changing energy technologies in need of rapid and flexible experimentation or engineering.

$793 million for clean energy activities and civilian nuclear energy programs, including research and development and infrastructure programs. The budget includes a new cross-cutting research program to address technology needs for all aspects of nuclear energy production.

Department of State

In conjunction with U.S. Agency for International Development (USAID) and the Treasury Department, the State Department put forth a budget that will provide developing nations $1.4 billion in FY 2011 to address climate change.

A drop in the bucket toward $100 billion a year by 2020, the proposal would concentrate international efforts on adaptation, energy development, and ecosystem management programs to improve agricultural practices and support carbon sequestration and storage. Combined with last year’s final tally of about $1.0 billion, even meeting the U.S.’ share of the $30 billion by 2012 pledge in the Copenhagen Accord (likely to be about 25 percent) will require a substantial increase in FY 2012 or some creative accounting.

Other notable requests, via OMB:

The Department of Transportation: $530 million as part of the President’s Partnership for Sustainable Communities to help State and local governments invest in sustainable transportation infrastructure that integrates with housing development and other critical investments.

The Department of the Interior: $73 million—a $14 million increase—to build agency capacity to review and permit renewable energy projects on federal lands. DOI has set a goal to permit at least 9,000 megawatts of new solar, wind, and geothermal electricity generation capacity on DOI-managed lands by the end of 2011.

So where does it go from here?

The road from proposed budget to actual budget runs directly through Congress; more specifically it runs through a process outlined in this interactive graphic. (And, while we’re on the subject, NYT has this really cool graphic illustrating funding request sizes. I love alternative ways to illustrate governmental functions. I was a huge fan of School House Rock as a kid.)

The process of hearings and congressional consideration got underway in earnest today with Treasury Secretary Timothy Geithner testifying before the Senate Budget Committee and OMB Director Peter Orszag testifying before the House Budget Committee.

Tiffany Clements is managing editor of Weathervane.

Published: Feb-02-10 | 0 Comments

Jan27

What I’m Watching for in the State of the Union

Obama Administration, Cap and Trade, COP-15, Congress, Green Jobs

Everybody with a keyboard and opinion seems to know exactly what President Obama needs to say tonight for his State of the Union address to be successful. With more than enough pontification and prognostication to go around, I humbly offer a simple snapshot of some climate and energy talking points I’ll be watching for tonight:

J-O-B-S: Taking a cue from recent polling data that suggests climate can go farther when paired with employment it’s safe to say the president will connect clean energy development and jobs creation. The likely depth and tone of the president's jobs and energy messages are tougher to pin down, leaving some to hope for the best-case scenario, while others consider the worst.

A nod to the global climate community: While President Obama probably won’t bring up this new study ranking the U.S. 61^st in the world in terms of environmental performance, a mention of ongoing work on international climate mitigation plans may be in the cards. With the—apparently soft—deadline for countries to submit their emissions mitigation plans coming Sunday, the State of the Union is a good opportunity for the president to reassert his commitment to U.S. leadership on climate change and creating an international deal.

A presidential assessment of cap and trade’s prospects: If comments in today’s New York Times from the lone Republican sticking his neck out on climate legislation are any indicator, the Senate may be throwing in the towel—and is at least dialing back expectations—on cap and trade.

“Realistically, the cap-and-trade bills in the House and the Senate are going nowhere,” said Senator Lindsey Graham, Republican of South Carolina, who is trying to fashion a bipartisan package of climate and energy measures. “They’re not business-friendly enough, and they don’t lead to meaningful energy independence.”

Mr. Graham said the public was demanding that any energy legislation from Washington focus on creating jobs, whether by drilling for offshore oil or building wind turbines.

“What is dead is some massive cap-and-trade system that regulates carbon in a fashion that drives up energy costs,” he said.

But Sen. John Kerry says he’s not ready to scale back the Senate’s climate bill and a top White House aide is backing his statements, despite numerous suggestions a “plan B” energy-only bill is more politically feasible and likely to garner more support.

Given his deference to Congress thus far and the ebb and flow of public attention to the legislation, it seems unlikely that the president would wade too far into this hubbub. Still, in the wake of a move by Alaska Sen. Lisa Murkowski to cut off the Environmental Protection Agency’s authority to regulate greenhouse gas emissions if Congress fails to come up with its own plan, the president may have to say something about the state of play for one of his key issues.

What else should we be watching for tonight? What do you expect to hear the president say about climate and energy?

Tiffany Clements is managing editor of Weathervane.

Published: Jan-27-10 | 1 Comment

Jan08

Will Senator Murkowski Block EPA Action on Climate?

Congress, EPA, Obama Administration, United States

Capitol image courtesy Cliff1066 via Flickr An amendment Senator Murkowski (R-AK) is likely to introduce is getting some attention in climate policy circles. The measure—expected to be added to important legislation needed to raise the debt ceiling, due to be considered by the Senate this month—would strip the Environmental Protection Agency of much of its authority to regulate greenhouse gases (GHGs) during 2010. Despite the attention, I don’t think the amendment is at all likely to become law. Even if it did, it probably wouldn’t have much effect on what the EPA will do over the short term. I’m not even sure that the impetus behind it is a desire by Sen. Murkowski to block EPA regulation.

Before explaining why I think those things are true, let’s take a quick look at what the amendment would actually do. Sen. Murkowski hasn’t introduced it yet, but she introduced a similar measure to an environmental bill last fall. It was defeated. The new amendment will probably be very similar or identical. It will likely be very short, and do only one thing: remove the EPA’s authority to regulate GHGs from stationary sources under the Clean Air Act (CAA). It will only block this authority for one year, and it will not touch authority to regulate mobile sources.*

Practically, this wouldn’t have a big effect on EPA regulations. The EPA is only moving forward with mobile source regulations right now (at least publicly), having made its mobile source endangerment finding last month and plans to introduce fleet emissions standards in March. Nobody outside the agency knows for sure what the EPA will do with stationary source GHGs, assuming Congress does not do something first. In any case, a program is not likely to be in place before the end of 2010. One exception to this is the CAA permitting process (NSR and Title V)—but the EPA is also trying to restrict that process to big GHG emitters that already have to go through it for other pollutants. Even if this “tailoring” runs into trouble in the courts, it too would probably be able to survive 2010.

Sen. Murkowski has also made some noise about the recent GHG endangerment finding. She doesn’t like it and is apparently trying to get some legislation to block it. I don’t really understand this move, though—the debt ceiling amendment would leave mobile source authority to the EPA. That authority is meaningless without the endangerment finding (remember that it applies on its face only to mobile source GHG emissions, and is required for the EPA to regulate those sources).Congress has generally been OK with the EPA regulating mobile-source GHGs. None of the climate bills (as far as I know) supplant EPA regulation of mobile sources. Murkowski therefore seems to be making two separate moves, one aimed at EPA authority to regulate stationary-source GHGs, and the other aimed at authority to regulate mobile-source GHGs. It’s not clear whether this is a broadside attack on EPA authority cleverly broken in to two parts, each of which might be more likely to pass, or an alternative approach—maybe she would only push one option if the other failed.

Moreover, I don’t think the debt-ceiling amendment will become law. There are four reasons for this: first, it requires 60 votes to pass, like most other Senate measures. Sen. Murkowski would have to get every Republican and 10 Democrats to vote for the amendment. This isn’t totally implausible, but it won’t be easy. Moderate Democrats or supporters of one or the other climate proposals in the Senate might be convinced that giving Congress more time is a good idea. Most Democrats will oppose the amendment, though.

Second, even if Sen. Murkowski gets the amendment into the debt ceiling bill, that bill itself will have to pass the Senate. The last increase in the debt ceiling passed just before Christmas by a single vote, almost exactly along party lines. The Murkowski amendment would throw a giant spanner into that balance, with the possible result that the measure wouldn’t pass at all. Republicans would be torn between opposition to increasing the ceiling and support for the amendment, and Democrats the reverse. If the bill were to pass, the coalition voting for it would have to be very odd. I have a suspicion that this is the intended result of the amendment—it might be a poison pill for the debt ceiling increase, as much or more than a move aimed at the EPA. That’s reasonably clever, but it’s also dangerous. Republicans might get into trouble at the polls either for voting to increase the deficit or failing to block EPA regulations—when if they had kept the bills separate they could have had both votes on their record.

Third, any bill that did pass the Senate would have to go through consolidation with the corresponding House measure. I’m not an expert on legislative process, but I do know the House is less likely to include a Murkowski-style amendment.

Finally, even if all these other hurdles are passed, the president would have to sign the bill including the amendment. I don’t think he would do this—it would take away significant authority from the executive branch on an issue he has publicly claimed is important. It would also undermine U.S. international credibility on climate, which is currently based on the promise of EPA action in lieu of congressional moves. Congress surely does not have the 2/3 supermajority to overcome a veto.

Would such a veto trigger a Clinton-Gingrich-style standoff and potentially shut down the government? Maybe, but I don’t think so. The debt ceiling is important in the long term, but the government can operate without it. In 1995, Congress did not pass a budget, so the government could not spend money to operate. Here, it can operate, just not borrow. This could cause all kinds of problems, but it wouldn’t necessarily cause a shutdown. It would also be politically dangerous to risk any kind of shutdown during a war, and the 1995 experience is evidence that Congress would get the blame.

The difficulty of getting the Murkowski amendment through illustrates the problems faced by climate legislation generally. Since the CAA already gives the EPA authority and she is trying to take it away, all of the institutional and political forces that have made it tough to get a climate bill would work in the opposite direction.

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*Specifically, the September amendment would have denied funding to the EPA for any regulation of GHGs under the CAA except under §202(a) – mobile sources. It would also have overturned the Mass v. EPA finding that GHGs are CAA pollutants, again except under §202(a). This is weird, since there is no separate definition of pollutants in different sections of the CAA, but it’s not unprecedented for a term to mean two different things in the same statute. Congress has the power to define it differently. Both of these changes would expire after one year. The result would be that the EPA can’t use any part of the CAA except §202 to regulate GHGs for one year – in other words, no NAAQS, no NSPS, no permitting (and therefore no tailoring), no stationary-source regulation at all.

Nathan Richardson is a Visiting Scholar at RFF.

Published: Jan-08-10 | 1 Comment

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