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