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National Energy/Climate Bills


National Energy/Climate Bills – PowerPoint PPT presentation

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Title: National Energy/Climate Bills

(No Transcript)
  • Basic elements of Model Rule
  • applicability applies to fossil fuel-fired
    electric generating units gt25MW
  • (covers 25 of regional GHG emissions)
  • 2) size structure of cap
  • a) states must stabilize power sector CO2
    emissions at 2009 emissions during
    implementation (2009-2014)
  • b) then reduce emissions by 2.5/yr for
  • (total reductions of 10 below 2009 levels by
  • 3) permitting each CO2 source must have
    approved CO2 budget emission monitoring plan
    (EMP) developed by state energy regulators
  • 4) allowance allocation most CO2 allowances
    auctioned off (vs. ETS)
  • 25 allowances to support consumer benefit
  • 5) temporal flexibility mechanisms
  • facilities can bank or rollover CO2
  • early reduction allowances granted for early
    demonstrated reductions
  • extended compliance period
  • 6) price triggers
  • stage 1 if CO2 allowance cost gt7, CO2 offsets
    can increase
  • stage 2 if CO2 allowance cost gt10, CO2
    offsets increase more,
  • compliance period extended, international CO2
    credits allowed

  • Basic elements of Model Rule (cont)
  • emissions monitoring CO2 unit must install and
    certify monitoring system, report
    quality-controlled data (borrows from EPA acid
    rain program)
  • offsets awards CO2 offset allowances to
    projects outside capped sector that
    sequester/reduce CO2 emissions (limited to 3.3
    of units total compliance obligation
  • - must prove additionality
  • Who stands to gain here?
  • Who stands to lose?
  • Or is it that simple?
  • What would you do as a power company in a RGGI
  • What is leakage? and how does it impact RGGI?

  • There could be a shift of electricity generation
    from capped sources subject to RGGI to
    higher-emitting sources not subject to RGGI.
  • -impossible to predict ahead of time (market and
    political forces unknown)
  • -RGGI proposes to
  • track load vs. generation
  • monitor C-intensive nature of non-RGGI power
  • policy options 1) reduce electricity demand
    (efficiency), so indirectly reduce leakage
  • 2) limit the amount of CO2 (ltxx lbs CO2/MWh) that
    could be emitted through long-term purchasing
    agreements between RGGI utilities and regional
    power plants
  • 3) emissions portfolio standard

How did the states dole out allowances?
- different than ETS, most allowances auctioned
How much money did they make?
Across three past CO2 allowance auctions, cost
How much did it cost the average customer?
Distributing the CO2 allowance costs around the
ratepayers in those States, RGGI costs added
0.73/month to the average electric utility bill.
Where did all this money go?
Has RGGI reduced emissions? does it matter?
National Energy/Climate Bills
  • How does the legislative process work?
  • What bills have been considered?
  • What are the pros and cons of each? Who stands to
    win and who stands to lose?

The legislative process how does a bill become
Step 1 Bill is introduced by sponsor (and
co-sponsors) assigned a (S. for Senate
bills and H.R. for House bills), printed and
posted on web ? http//
Step 2 Committee consideration referred to one
or more House or Senate committees must receive
a majority vote from committee members in order
to move to the floor for a full vote
Step 3 Subcommittee consideration some bills
sent to special subcommittee for further study or
public hearings subcommittee may mark up bill
by adding amendments and making changes must
receive a majority vote to send back to committee
or it dies
Step 4 Bill reported by committee published
Step 5 Floor action legislative calendar bill
scheduled for debate, or floor action majority
party decides order
Step 6 Debate House members typically limited
to 1-5 minutes each, if at all Senators have
unlimited speaking time ? opponents can
filibuster until either a) back-door agreement
reached b) 60 senators move to end debate and
call a vote
Step 7 Voting either electronic or verbal
Step 8 Bill referred to other chamber other
chamber can approve, reject, amend, or ignore the
Step 9 Conference committee ? towards
reconciliation members from House and Senate
work to compromise on differences in passed
bills changes must be approved by House and
Senate, else bill dies
Step 10 Signature by President if President
vetoes bill, 66 of House and Senate members
needed to override
Bill Name Status
HOUSE H.R. 2454 American Clean Energy and
Security Act Passed 6/25/09 Waxman, D-CA
Markey, D-MA 219 to 212 SENATE S. 1462
American Clean Energy Leadership Act
Passed Comm. Bingaman, D-NM (chairman) S. 1733
Clean Energy Jobs and American Power Act
Passed Comm. Kerry, D-MA Boxer, D-CA Cardin,
D-MD Kirk, D-MA 9/30/09 S. ???? Kerry, D-MA
Graham, R-SC Lieberman, I-CT working to
introduce comprehensive climate/energy bill
that will muster 60 votes needed to block
predictable Republican filibuster
  • H.R. 2454 American Clean Energy and Security
  • Key Provisions
  • Clean Energy
  • -renewable electricity/efficiency standard, CCS,
    new rules for new coal
  • plants, RD for electric vehicles, for smart
  • Energy Efficiency
  • - building, lighting, appliance, and vehicle
    efficiency programs
  • Cap and Trade Program
  • Transitioning to a Clean Energy Economy
  • -preserve domestic competitiveness, support
    workers and consumers,
  • support for domestic and international adaptation
  • Agriculture and Forestry-related offsets (tied to

Waxman-Markey Cap Trade Covers 1) stationary
sources emitting gt25,000 tons of GHG/yr 2) oil
refineries 3) importers of petroleum 4) natural
gas distributors 5) F-gas producers (CFCs,
HCFCs, HFCs etc) separate cap Targets -3 of
2005 by 2012, -17 by 2020 -83 by
2050 Distribution of Allowances 20 allowances
auctioned at first, 70 by 2030 funds to go to
1) protecting consumer (esp. low income) from
rising electricity and gas prices 2) fund
technological advances
Where does the money from allowances go to?
E-intensive, trade-vulnerable industry
low income consumers
natl gas consumers
big coal
consumers as energy divident
electricity consumers for price protection
  • Waxman-Markey Cap Trade (cont.)
  • Offsets
  • - allows 2 billion tons of offsets system-wide (1
    billion domestic
  • 1 billion international) President can
    recommend increase or decrease
  • creates Offsets Integrity Advisory Board to
    oversee and qualify offsets
  • involves domestic offset program using
    agriculture and forestry
  • Costs to Consumers
  • - Congressional Budget Office cost of
    175/yr/household on average
  • net benefit of 41/yr/household for low-income
  • - EPA estimates cost of 80-111/yr/household
  • Carbon Market Oversight
  • Federal Energy Regulatory Commission Commodity
    Futures Trading
  • Commission no over-the-counter trading of
  • Interaction with State and Regional Cap-and-Trade
  • State programs put on hold 2012-2017

  • Waxman-Markey on Coal
  • Focuses on CCS (Carbon Capture and Storage)
  • creates Carbon Storage Research Corporation (1
    billion/yr for 10 years funded from small tax on
    electricity rates) oversee 5 large commercial
    CCS operations
  • -for 10 years, gives bonus allowances to
    companies that do CCS (equivalent to 100/ton of
    CO2) second 10 years bonus allowances are

ACES gives 250 billion in CCS incentives by
  • Waxman-Markey on Nuclear and low-C Energy
  • Creates sustained federal funding for low-C
  • creates Clean Energy Deployment Administration
    (initially funded by 7.5 billion in green
    bonds granted by US Treasury) 20yr charter
    oversee distribution of allowances granted to
    clean energy projects
  • Removes regulatory and financing hurdles for
  • places sole responsibility for nuclear permitting
    and financing in the DOE heavy oversight by
    Energy Secretary 19 billion available in
    financing right now

Electricity generating capacity by 2050 in BAU
and with ACES
Climate Change and Energy
Remaining slides from Dr. Ken Mitchell, EPA 2010
  • An EPA Priority
  • Reducing greenhouse gases (GHG) is a top priority
    for Administrator Jackson
  • Some key actions taken
  • Endangerment Finding
  • Mandatory Reporting
  • Renewable Fuels Standard
  • Light-Duty Vehicle GHG Emissions
    Standards and CAFE Standards
  • GHG permitting requirements on
    large industrial facilities
    (Tailoring Rule)
  • Carbon Capture Sequestration
  • A variety of voluntary and other initiatives

Endangerment Finding
  • Endangerment Finding Current and projected
    concentrations of the six key well-mixed GHGs in
    the atmosphere threaten the public health and
    welfare of current and future generations
  • Cause or Contribute Finding The combined
    emissions of these well-mixed GHGs from new motor
    vehicles and new motor vehicle engines contribute
    to the greenhouse gas pollution which threatens
    public health and welfare
  • Final Rule published in Federal Register December
    15, 2009
  • Greenhouse Gases (GHGs)
  • Carbon Dioxide (CO2)
  • Methane (CH4)
  • Nitrous Oxide (N2O)
  • Hydrofluorocarbons (HFC)
  • Perfluorocarbons (PFC)
  • Sulfur Hexafluoride (SF6)

GHG Reporting Rule
Upstream Sources Suppliers of Coal-based Liquid Fuels Suppliers of Petroleum Products Suppliers of Natural Gas and Natural Gas Liquids Suppliers of Industrial GHGs Suppliers of Carbon Dioxide (CO2)
Downstream Sources General Stationary Fuel Combustion Sources Electricity Generation Adipic Acid Production Aluminum Production Ammonia Manufacturing Cement Production Ferroalloy Production Glass Production HCFC-22 Production and HFC-23 Destruction Hydrogen Production Iron and Steel Production Lead Production
Mobile Sources Vehicles and engines outside of the light-duty sector (light-duty in NPRM to Establish Light-Duty Vehicle Greenhouse Gas Emission Standards and Corporate Fuel Economy Standards)
  • Covered GHGs
  • Carbon Dioxide (CO2)
  • Methane (CH4)
  • Nitrous Oxide (N2O)
  • Hydrofluorocarbons (HFC)
  • Perfluorocarbons (PFC)
  • Sulfur Hexafluoride (SF6)
  • Nitrogen Trifluoride (NF3)
  • Hydrofluorinated Ethers (HFE)

Expressed in metric tons of carbon dioxide
equivalent (mtCO2e) First report for CY10 Final
Rule Published in Federal Register on October
30, 2009
We delayed inclusion of certain source
categories as we consider comments and options
Renewable Fuels Standard (RFS2)
  • Revision to current RFS (RFS1) as required by the
    Energy Independence and Security Act (EISA)
  • Significant increase in
    renewable fuels to displace
    consumption (36 billion gallons by 2022)
  • CO2 Lifecycle analysis
  • Final Rule Signed 2/3/2010

Lifecycle GHG Thresholds Specified in EISA Lifecycle GHG Thresholds Specified in EISA
(percent reduction from 2005 baseline) (percent reduction from 2005 baseline)
Renewable fuela  20
Advanced biofuel 50
Biomass-based diesel  50
Cellulosic biofuel  60
a The 20 criterion generally applies to
renewable fuel from new facilities that commenced
construction after December 19, 2007.
Mobile Source GHG/CAFE Proposed Rule
  • First national GHG emissions standards under the
    Clean Air Act
  • Satisfies requirements under both Federal
    programs and the standards of California and
    other states
  • Applies to passenger cars, light-duty trucks, and
    medium-duty passenger vehicles, covering model
    years 2012 through 2016
  • Meet an estimated combined average emissions
    level of 250 g CO2 per mile in model year 2016,
    equivalent to 35.5 mpg if the automotive industry
    were to meet this CO2 level all through fuel
    economy improvements
  • Proposed in Federal Register September 28, 2009

Proposed Tailoring Rule
  • Focused on large facilities emitting over 25,000
    tons of CO2e/year
  • Facilities required to obtain construction
    permits that would demonstrate they are using the
    best practices and technologies to minimize GHG
  • The rule proposes new thresholds for greenhouse
    gas emissions (GHG) that define when Clean Air
    Act (CAA) permits under the New Source Review
    (NSR) and title V operating permits programs
    would be required for new or existing industrial
  • Would cover nearly 70 percent of the national GHG
    emissions that come from stationary sources,
    including those from the nations largest
    emittersincluding power plants, refineries, and
    cement production facilities.
  • Small farms, restaurants and many other

    types of small facilities would not be subject

    to these permitting programs
  • Proposal in Federal Register on 10/27/09