Commission Recommends Increasing Gas Tax and Paying Per Mile
A congressional commission released a report on Thursday calling for a 10 cent per gallon increase in the federal gas tax, as well as transitioning to a system by which motorists are charged for how much they drive, rather than how much gas they consume.
The bipartisan National Surface Transportation Infrastructure Financing Commission noted that the current 18.4 cent per gallon gas tax is too small and unsustainable to support necessary transportation infrastructure projects. Since concerns about climate change and dependency on foreign oil are motivating consumers to move towards more fuel efficient vehicles, the commission predicted that gas tax revenues will continue to be insufficient in the future. As a result, the commission proposed that the country move to a system of charging motorists for how much they drive, rather than how much gas they consume.
While this plan would more accurately connect the amount drivers’ pay for transportation infrastructure to the amount they actually use that infrastructure, it would do relatively little to discourage increased gas consumption and consequential emissions. However, in fairness to the committee, it is their duty to figure out how to pay for infrastructure, not how to fight climate change.
The Tides Are Turning: Obama to Increase Taxes on Offshore Drilling
Offshore drilling would become more expensive under President Obama’s proposed budget. The proposal would levy “a new excise tax on offshore oil and gas production in the Gulf of Mexico to close loopholes that have given oil companies excessive royalty relief.”
Additionally, new revenues, along with funds from the stimulus bill, would be directed towards clean energy research and development. The proposed budget calls for “significant increases” in spending for renewable energy, carbon sequestration, and power transmission projects. The stated goal of these measures is to position “the United States as the world leader in climate change technology.”
Sen. Reid Proposes to Rapidly Grow Transmission Lines
Senate Majority Leader Harry Reid (D-Nev.) announced on Monday that he will introduce legislation this week to redevelop the nation’s electric transmission lines. Reid made the announcement while attending the National Clean Energy Project with other green giants like Al Gore, T. Boone Pickens, and Bill Clinton.
The intent of the bill is to make it easier to carry renewable energy from the remote areas where renewable energy is often generated to the urban population centers.
“My legislation will require the President to designate renewable energy zones with significant clean energy generating potential. Then, a massive planning effort will begin in all the interconnection areas of the country to maximize the use of that renewable potential by building new transmission capacity. If that process falters, then the federal government would be given clear authority to keep it going and get that new transmission built on schedule,” Reid said.
Obama May Support Single National Standard for Vehicle Efficiency
While early indications appeared that the Obama Administration was going to grant California its waiver to independently regulate greenhouse gas emissions from vehicles, it now looks like they are considering a single national standard. On Sunday, Obama’s assistant for energy and climate, Carol Browner said “The hope across the administration is that we can have a unified national policy when it comes to cleaner vehicles.”
The impact of such a policy shift would depend entirely on how strict any national standard is crafted. Historically, car companies and anti-environmentalists have supported national emissions standards because Congressional legislation is invariably weaker and more watered down than legislation that comes out of liberal states like California. And if federal pre-emption is followed, states are locked out of creating their own standards.
While federal standards, in theory, could be just as strong, if not stronger than state laws, this is never the case. Current federal law aims to have a national average of 35 mpg by 2020, while California’s proposed rule would be 42 mpg. It seems unlikely, especially having seen the extreme partisanship with the stimulus package, that Obama would have the political capital and votes in Congress to buck this historic trend and push-through a meaningful national standard.
Pickens Enthusiastic About Renewable Components of Stimulus Bill
One of the biggest private proponents of clean energy, T. Boone Pickens, has weighed in on the $787 billion stimulus bill and appears to be generally excited about its provisions. In a letter to supporters of his Pickens Plan he highlighted the following provisions as being key to growing our wind energy capacity:
- A 3-year Production Tax Credit (PTC) extension through the end of 2012;
- An option to elect a 30% Investment Tax Credit (ITC) in place of the PTC;
- An option to convert the Investment Tax Credit into a grant for projects placed in service in 2009, or 2010, or placed in service before 2013 provided construction begins in 2009 or 2010;
- A new $6 billion Department of Energy renewable energy and transmission loan guarantee program, which should fund around $60 billion in principal amount of guaranteed loans;
- Authority for the Western Area Power Administration to borrow up to $3.25 billion from the Treasury to build renewable transmission lines in the western United States, including western Texas.
It is clear from the above list that Pickens has made some significant progress on the wind energy half of his Plan. However, his more controversial natural gas proposals were not directly addressed by the stimulus.
Stimulating Renewable Energy…
The massive $787 billion stimulus bill was signed into law on Tuesday and people are beginning to digest what was inside it. According to Recovery.gov, in general, the bill is allocated in the following manner:
- Tax Relief $288 billion
- State and Local Fiscal Relief $144 billion
- Infrastructure and Science $111 billion
- Protecting the Vulnerable $81 billion
- Health Care $59 billion
- Education and Training $53 billion
- Energy $43 billion
- Other $8 billion
Of course what is of interest to us is the $43 billion allocated for energy. With $22 billion in tax relief also going towards energy, the total investment in energy is actually $65 billion. This stimulus money allocated for energy is broken-down as follows: READ MORE
EPA Rejects Bush Administration Position on Coal Emissions
EPA Administrator Lisa Jackson said on Tuesday that the agency would reconsider regulating CO2 emissions from coal-fired power plants, in opposition to the previous administration’s position laid out by former Administrator Stephen Johnson in December.
Jackson noted that the Bush Administration’s position is not “the final word on the appropriate interpretation of the Clean Air Act,” but she stopped short of issuing a stay of former Administrator Johnson’s memorandum. Jackson’s position brings the Obama Administration’s position closer to that expressed by the EPA Appeals Board in November, which held that the permitting process for new coal plants must consider the use of “best available controls” by that plant to limit CO2 emissions.
Environmental groups are optimistic that this is the first step towards implementing an emissions regime for coal-fired plants. Already, many coal energy projects have been put on hold over fears that impending regulations could make these projects unfeasible since carbon sequestration techniques are extremely expensive and unproven.
Places to Visit Before Climate Change Ruins Them
CNN has a list from author Bob Henson of the Five places to go before global warming messes them up:
(1) Great Barrier Reef, Australia
“Many of the world’s reefs already are experiencing “bleaching” in which algae living in the coral die and leave behind whitened skeletons.
“The Great Barrier Reef — which is composed of about 2,900 individual reefs and is off the northeast coast of Australia — is seeing limited bleaching now, and the Great Barrier Reef Marine Park Authority expects the problem to grow in coming decades.”
“But for cities near the coast such as New Orleans, which already sits below sea level, rising waters could spell trouble for tourists and residents alike, even in the relative near term.
“Henson doesn’t expect New Orleans to be underwater anytime soon. But travel to the Louisiana city may become more difficult in the future, he said. Scientists expect floods to become more frequent.” READ MORE
Pickens Discusses Energy Components of the Stimulus Package
T. Boone Pickens appeared on CNBC on Monday and discussed the stimulus plan. Pickens seemed to be generally enthusiastic about the energy policies the plan contains, noting “We got a lot in on wind and renewables. You’re going to have the grid in it, and that’s important to the whole system; that’s the infrastructure that we need.”
[Note: unfortunately CNBC doesn't allow this video to be embedded so you need to click through to view it.]
U.S. Takes Baby Steps While Oil Price Spike on the Horizon
It has been about three years since gas prices jumped over $3 during the most recent spike, yet we seem no less materially dependent on this volatile, polluting, and corrupting resource today than we were before the price run-up.
Underlining the idiocy of our failure to take transformative action, the International Energy Agency warned on Monday that there could be another oil supply crunch beginning in 2010 if the global economy recovers. Yes, this is about as insightful as noting the ‘sky is blue,’ but given the little baby steps we are taking on this issue, it seems even awareness of the obvious isn’t enough to motivate the American public to fundamentally change.
While the IEA’s solution to the problem is, of course, to increase capital investment in oil production, real change will only occur when we fundamentally change the way we live and power our transportation needs. Nothing less than a big tax on gasoline, coupled with massive investment in public transportation, urban planning, and alternative fuels research, is what is needed. Unfortunately, it looks like we may need the shock of another price spike before we make these hard choices.
Energy Secretary Chu: Progress Needed in Batteries, Solar and Biofuels
Energy Secretary Steven Chu discussed the ways the U.S. should fight climate change in an interview with the New York Times. Chu noted that while President Obama and much of Congress has endorsed a cap-and-trade system similar to that in-place in Europe, alternatives could still emerge like a simple tax on carbon emissions or a modified cap-and-trade.
Chu highlighted three fields in particular that would require significant scientific breakthrough to combat climate change: electric batteries, solar power, and biofuels. Of course, batteries and biofuels are keys to shifting our automobiles off of petroleum, and solar could eventually replace dirty coal.
However, (taking a page from Friedman’s playbook) Chu noted that countries like India and China, which have large coal reserves, will not abandon that cheap energy source, so the U.S. better lead the world in finding a way to burn it cleanly.
Chu noted that while the technology may not be there yet, these feats are far from impossible. He analogized the situation to the turn of the nineteenth century when European scientists Fritz Haber and Carl Bosch made scientific discoveries that allowed the development of cheap nitrogen fertilizers that saved Europe from starvation.
UK Looks to Weatherize Every Home by 2030
British Energy and Climate Change minister Ed Miliband proposed a comprehensive scheme to dramatically increase the energy efficiency of all UK homes by 2030. If implemented, the plan could help cut carbon emissions from households by a third by 2020. Heating and powering of households currently accounts for 27% of the UK’s overall carbon emissions. Under a very progressive plan, the UK aims to reduce overall emissions by 80% by 2050.
The weatherization and other efficiency measures proposed on Thursday would retrofit 7 million homes by 2020 and every home by 2030. All households would be eligible to apply for a loan from energy companies, in order to pay for insulation or renewable sources of heating. The loan would be repaid from the resulting energy savings and from cash payments households would receive in return for cutting carbon emissions.
Miliband could just as easily have been describing America’s problem when he stated, “We need to move from incremental steps forward on household energy efficiency to a comprehensive national plan.”
Although the U.S. is increasing its attention on weatherization efforts under Obama, and the stimulus bill does include $5 billion to weatherize modest-income homes, there is no comprehensive plan on the table equivalent to that proposed by the UK.
Southern California to Get Major Boost in Solar Energy
Southern California Edison (SCE) and BrightSource Energy announced an agreement on Wednesday that would bring seven new solar thermal projects online, producing a total of 1,300 MW of renewable energy– enough to power nearly 845,000 homes.
BrightSource, which has Google as an investor, uses a proprietary “power tower” technology that focuses thousands of small mirrors towards a boiler sitting atop a tower in order to produce high temperature steam. The super heated steam is used to spin a conventional turbine which generates electricity. The steam is then cooled back into water and reused by the system. READ MORE
Northern Ireland Environmental Minister Bans Climate Change Ad
Reminding us that “leadership” is a flexible word that is often more synonymous with “ignorance” than its traditional meaning, Northern Ireland’s environmental minister on Monday announced that he is blocking an ad on climate change because it claims the problem is man-made, instead of a god-made. This shining example of rational thought is named Sammy Wilson and is a hard-line protestant and leading member of the Democratic Unionist Party.
The banned advertisement is part of the British “Act on CO2” campaign that encourages the public to reduce the use of electricity and fossil fuels.
[Note: the above ad is just one from the Act on CO2 campaign.]
Google Jumps Into the Smart Meter Industry and Debate
Google has weighed-in on the debate regarding the proposal in the federal stimulus that all smart meters should be required to use open standards and protocols. Not surprisingly, they have come out on the side in-favor of open standards, noting “open protocols and standards should serve as the cornerstone of smart grid projects, to spur innovation, drive competition, and bring more information to consumers as the smart grid evolves.”
Google has an interest in this debate since they are currently developing a free web service called PowerMeter that is a type of smart meter technology that can help consumers track energy use in their house or business. The graphic above illustrates how the service works.
Google notes that the current situation where consumers have no idea how much they are paying for electricity at different times is akin to “stick[ing] to a budget in a store with no prices.” But that with smart meter technology, people “could find all sorts of ways to save energy and lower electricity bills.” Google notes that studies estimate that this price savings could range from 5-15%. However, once smart meter technologies are widely installed, utilities should be able to create tiered pricing based upon supply and demand, thereby further reducing electricity bills, as well as the burden on the entire grid.
