With Cap and Trade Dead, What's Left of the Energy Bill?

July 26, 2010

The White House and leading Democrats in the Senate have abandoned all efforts to pass comprehensive climate legislation this year. Senate leaders are said to be drafting a pared down energy bill that would create a handful of new incentives and programs but do nothing to cap greenhouse gas emissions.

Highlights of the limited bill include $5 billion dollars for energy-saving home retrofitting incentives, $4.1 billion in compressed natural gas vehicle incentives, expanded land and water conservation measures, and new reforms aimed at fixing the Department of the Interior’s shameful record on offshore drilling oversight. The legislation would also increase the cap on oil spill liability from $75 million to $10 billion.

No Mention of Electric Vehicles or Biofuels

What’s more notable about the legislation is what’s missing. In addition to cap and trade, there is no mention of hybrid or electric vehicle incentives, clean energy financing or renewable energy targets. Also absent is an extension of the ethanol subsidies that are scheduled to expire at the end of this year.

Both EVs and ethanol could be addressed in separate measures or could be folded into the bill at a later date. The Promoting Electric Vehicles Act of 2010—which would allocate $6 billion for plug-in cars—was passed out of committee last week, while the House Ways and Means Committee is considering extending ethanol subsidies, but cutting them from $0.45 to $0.36 per gallon.

Both electric vehicles and biofuels have key moderate allies in the Senate, which vastly increases the likelihood that future versions of the bill will be expanded to include them. Republican Sen. Chuck Grassley of Iowa and Democrat Sen. Ben Nelson of Nebraska could both be potentially coaxed to vote for a bill that funds the ethanol industry, while Republican Sen. Byron Dorgan is one of the Senate’s leading EV advocates.

Pickens Plan Gets a Much-Needed Victory

More than two years and hundreds of millions of dollars later, it appears that T. Boone Pickens may have finally won government support for compressed natural gas vehicles. Natural gas is a central component of the billionaire former-oil-man’s Pickens Plan for energy independence, and the energy bill is said to include $4.1 billion to encourage the trucking industry to purchase CNG-powered trucks.

In addition to putting more natural gas vehicles on the road, the money could help to encourage the construction of natural gas fueling stations along key trucking corridors. The federal government already offers a variety of incentives for using and selling natural gas for transportation, but fears about its long-term viability thus far have kept CNG from making significant progress as a commercial fuel.

White House Support Called Into Question

A recent Rolling Stone article contends that top White House advisors, Rahm Emanuel and David Axelrod, gave up on capping emissions last summer and had to be coaxed back into any action on the legislation by a series of pleas from congressional Democrats and a meeting with former Vice President Al Gore. Even after action on the proposed Kerry-Lieberman climate bill started up again—this time with a lucrative offshore drilling expansion aimed at luring the support of the oil industry and its more sympathetic supporters in Congress—the article says that the Obama administration has been reluctant to advocate for it.

Rather than using the recent Gulf oil disaster as a rallying cry for comprehensive energy reform, the administration is said to have actually decided that the spill made any further action untenable. With the drilling expansion no longer politically feasible, the White House reportedly decided that it no longer had the bargaining chips it needed to bring Republicans to the table.


Posted in Environment, Incentives and Laws, News, Oil Dependence
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  • Samie

    Democrats sometimes turn ordinary people into skeptics of government & can actually promote ideas spread by 24-hour cable TV networks, thus delegitimizing their message without much needed help. This can happen because they can not effectively balance special interests (that sometimes makes legislation or regulations weak or pointless), with long-turn benefits that could actually benefit most of the American populous. Our political arena makes any legit comprehensive energy legislation an impossibility right now, unfortunately, and promotes only lazy short-term thinking among voters and special interest groups.

    Sorry for being pessimistic but dealing away say more deep sea oil leases (w/ no real risk management or contingency plans) for a few billion in EV subsidies is not wroth it.

    Any comprehensive legislation uses a smart mix of government incentives. Case in point, the government should require private insures to underwrite risk/liability for any future offshore oil leases instead of the silly and ridiculous regulations that are in place and continued to be promoted by this administration. On the other hand you create a step-down in subsidies given to the ethanol industry by phasing out all tax breaks in say ten years. You could also create a jobs package by extending government grants/ incentives in retro fitting private and public buildings, power grids, creating higher standards for the energy star program, promotion of light rail (long-term funding), & encourage Leed certification standards for universities, government buildings & use by private contractors.

    So the point is any legislation with the political silliness that is in play now should not focus on the environment or CO2 reduction but a small package of incentives that promotes jobs, energy efficiency, and private risk &/or innovation, which is harder to attack as waste and does not threaten the business-as-usually crowd (except big oil,sorry..) with mandates or “change”.

  • DutchInChicago

    My Obama, “yes we did” poster is coming off the wall tonight.

    I can not believe that after 30 years of acknowledging that energy needs to be addressed by every single president we can not even pass Cap and Trade.

  • BulgarianBull

    Cap and Trade is the worst bill ever made and should never be pasted!same with carbon tax! What a bunch of horse crap!

  • Charles

    Beep the Republicans and the global warming doubters. We need to burn less fossil fuel! There are very few ways to get Americans to change their carbon heavy ways. One is cap and trade, another is to just tax carbon. Americans (like me) are a big part of the problem. We use a lot of fossil fuel per capita. We need to be much more efficient and use less carbon based fuels. We can do it, but it will take government forcing us with the whip of taxation and the carrot of tax credits for green energy.

  • Samie

    Charles I agree with your comments but any Apollo 11 mission type of American ingenuity/planning will be deemed as “socialism” or “taxpayer waste” and we will go on with short-term irresponsible/lazy business-as-usually ideas.

    My concern is with the political theater that we live in and it is not just Republicans that are the problem…

    I am surprised no funny & misrepresented Al Gore comments have shown up yet or the typical “I agree that something needs to be done but the economy is so fragile, now is not the right time.” This theroy also applies when the economy is good, the no time is a good time approach, or business as usually thinking.

    So my comments are based on the political realities and concerns of getting sucked into another misguided bill that does nothing. …

  • koodaaa

    what a douche!

  • JamesDavis

    “Samie”, anything that comes out of the Obama administration that steers away from the Bush administration is blocked by the Republicans. Republicans want business as usual, no matter how destructive or how stupid the Bush plans are, as long as it is a continuation of the Bush plans, and the Republicans have made it perfectly clear that they will vote ‘No’ on everything that veers away from the Bush’s promotion of fossil fuels and breaks to the rich. Even though the Bush plans of “Drill Baby Drill” and “It’s A Free Enterprise – get everything you can no matter how or who you screw in the process” plunged this country into one of the worst recessions since the Depression of 1929, the Republicans want to continue down that same ol’path.

    Obama should do like Bush did – Wait until Congress recesses and then push everyone of his bills through. That got so common with Bush that the Democrats would send a Senator back in Congress for 15 minutes to stop the practice. Some of the silly and right out stupid bills Bush pushed through like that was so dangerous that they collapsed our whole economy and took away our 1st Amendment Right and Ten Million jobs. Everyone of the Republicans who was in office during the Bush administration, or Reign, should be impeached and put in prison.

  • Samie

    koodaaa

    –douchy when someone is being difficult or just plan stank. “Douche bag-ish” if you will.–

    Not sure why having liberal & conservative views is a bad thing but for some reason people always insist on veering into talking point ideas and making out the other party as the enemy without actually being critical of their own party, especially when they control both the House and Senate.

    JamesDavis remember that there is a legislative branch of government. Obama can not simply dictate the details of what gets written & passed by the House & Senate. The amount of special interests and revolving door employment opportunities in Washington DC is shameful but that is how it works. So NO Obama can not simply pass a cap and trade bill without it being seriously watering down by stupid permit giveaways or major loopholes that will deem market controls a failure.

    JamesDavis I disagree with your assertions about the current economic problems that started well beyond that days of Bush Jr., (though he was a cheerleader for big government and short-term thinking) Also, how is this administration different from Bush Jr’s lax and absurd off-shore drilling regulations?

    Oh by the way I usually vote for Democrats in our two-party system, but I demand more than silly talking-point ideas for my vote. Guess that is a douchy thing to do……

  • Andrew B.

    You don’t have to be a liberal to want our nation to achieve energy independence and better stewardship of our planet. Most of my views would be considered “conservative”, and I usually vote Republican. At the same time, I am eager to drive an EV, and will likely install rooftop solar at some point. One thing is clear: We need better, more sensible politicians in touch with the American people!

  • Joe

    Al Gore has been discredited and the actual effect of green house gas is overblown or unproven!

    WE cannot afford your “SKY-ROCKETING ENERGY”, OBAMA, why even give Al Gore the time of day.

    Because it is really about Redistrubution of Wealth, Not saving the planet!

  • tom h

    Interesting timing as this happens in the same week as news on greenhouse effect on the base of ocean foodchain, i.e. phytoplanton. I’m sure that there were a lot of people in denial or ignorance in the many other societies destroyed by ecological changes+over use of resources (Easter Island, the Moche…). It’s not about saving the planet- see George Carlin’s take on that. It’s not only about re-distributing wealth- the only way out is for the consumerism addiction to be broken. Good luck on that when american identity and politics is about “preserving our way of life”, don’t read “way of life”=”democracy” (a big lie!), but rather feeding the buy/possess addiction. Americans and their “democracy” can barely get a health-insurance reform bill passed. Who’d be naive enough to think they’d go for voluntary simplicity. Don’t blame Obama or even all the right wing fascists, God knows who’ve got enough of them, but yourselves!

  • Joe

    Carbon global warming is B.S. Prove it, You Cant!!!!!!!!!!!!!!

  • Sienna

    Joe,

    you’re a smart guy, I’m eager to hear your proof that global warming is B.S.

  • Joe

    Sienna prove that it is real!

  • Joe