EU Commission Postpones Plan to Impose CO2 Tolls on EU Commercial Road Traffic, As European Businesses Grieve Over Loss of 'Liberty to Travel'

http://www.euractiv.com/en/transport/eu-green-transport-plans-ignore-co2/article-173964

EU 'green transport' plans to ignore CO2

7 July 2008

Despite the bloc's ambitious goal to slash greenhouse gas emissions by 20% by 2020, Commission proposals due to be unveiled tomorrow (8 July) would effectively prohibit governments from including the cost of CO2 emitted by road transport in their toll tariffs.

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Background:

The EU's first attempt at addressing the wide range of negative 'external effects' produced by transport was in 1993, when it put forward a directive enabling countries to introduce tolls on motorways in order to finance the cost of infrastructure deterioration caused by heavy road vehicles.

Known as the 'Eurovignette Directive', the law was revised in 2006 with a view to extending its scope to more roads and vehicles and to making it possible for governments to integrate other costs – such as congestion, accidents, noise and air pollution – into toll prices (see our LinksDossier on Eurovignette).

[http://www.euractiv.com/en/transport/road-charging-eurovignette/article-117451]

However, due to strong disagreements between member states and Parliament, the final text of the Eurovignette de facto excluded this very possibility until a "common methodology for the calculation and internalisation of external costs that can be applied to all modes of transport" is agreed. The Commission had been due to present a model before 10 June 2008, but this date was postponed slightly due to the switch in commissioner portfolios, which saw the Italian Antonio Tajani take over from Frenchman Jacques Barrot in mid-June 2008.

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The proposals will be part of a broad package on 'greening transport', which will include a general Communication on 'greening transport', a proposal for a review of the Eurovignette Directive and a 'Strategy for the internalisation of external costs' for each transport mode.

The review of the Eurovignette Directive aims to enable governments to charge truck drivers for the costs they impose in terms of congestion, noise and air pollution. http://www.eurotoll.fr/static/en/pdf/Directive-eurovignette.pdf

According to the latest draft obtained by EurActiv, such 'external cost' charges could come on top of those already levied in some countries to finance construction and maintenance work.

No obligations

Member states would not be obliged to impose such taxes but could choose to do so for vehicles weighing more than 3.5 tonnes, on any part of their road network, as of January 2012. Charges would be capped at maximum levels and would have to vary according to the time of day, the distance travelled and vehicles' Euro emissions class type – which takes account of the amount of NOx and poisonous particulate matter emitted (see LinksDossier on Euro standards).

Tolls with barriers would no longer be permitted and the collection of charges would have to be based on an electronic system so as to avoid hindrances to the free flow of traffic, although there would be a transition period up till January 2014.

CO2 costs excluded

Charging trucks for the CO2 they emit would remain forbidden. Indeed, in the draft communication, the Commission explains that although levying a specific CO2 tax on top of the air pollution and noise charges "could deliver additional benefits, it should better be addressed through a more coordinated approach at EU level to reduce greenhouse emissions based on either the Emission Trading System or a common fuel tax element in the Energy Taxation Directive".

Nor would governments be allowed to include accident costs in their road taxes, as the Commission finds that accident risks "are related not only to the distance travelled but also to complex factors such as speeding, driving under the influence of alcohol or failure to use seat belts, hence instruments like insurance rates might be a more effective tool".

Money for sustainable transport

In what is likely to become the main contentious issue with national governments, the Commission is proposing that revenues generated by external cost charges be earmarked towards measures aimed at reducing road transport pollution at source, improving CO2 and energy performance of vehicles and developing alternative infrastructure for transport users, the communication states.

Governments would nevertheless remain free to allocate revenues raised through infrastructure charges as they choose.

A five year wait?

The Commission says it will review the situation in 2013 to determine whether the option of charging truck drivers for the costs they impose on society should become an obligation. "The review will also assess whether the cost of CO2 emissions should be allowed to be included in tolls," states the communication.

But debates in Parliament could see a change in the proposals, as MEPs appear to be far from convinced by the plans so far (see positions).

Positions:

According to the Commission's communication, "the advantages and disadvantages of mandatory versus optional charging schemes for road freight transport were compared. It was found that while there are clear and immediate benefits to be reaped in member states with a lot of traffic, the financial viability of charging systems for external costs in member states with low traffic requires further studies".

Johannes Ludewig, executive director of the Community of European Railway and Infrastructure Companies (CER), told EurActiv that, though the Commission's plans were rather unambitious, the most important part was the acceptance of the principle of internalisation of external costs.

He nevertheless lamented the exclusion of CO2 from the plans, saying: "We are seeing the argument from the Commission saying that from a scientific point of view CO2 should be better internalised by taxes on gasoline or diesel and our view is that theoretically I can follow that, but in reality, seeing the price level of gasoline and diesel today, it is unrealistic that in the forseeable future any taxes on these two will be increased." He further pointed to the contradiction between going for an optional approach and excluding certain pollutants, such as CO2.

While Ludewig would rather have seen an obligation, he said "I think that is simply unrealistic".
But Damian Viccars, in charge of social and fiscal affairs at the European office of the International Road Transport Union (IRU), insisted that a mandatory approach would go against subsidiarity.

He also welcomed the exclusion of CO2 from the plans, saying: "Don't forget that we already have a CO2 tax in the form of fuel taxation. In the majority of cases, we already pay over and above our infrastructure costs through fuel taxes and contribute hugely to government transport budgets," he stressed.

Viccars also felt that congestion charges would amount to another form of "double taxation". "We are already incurring the congestion cost simply by being forced to sit in traffic," he said, adding that the 'polluter pays' system proposed by the Commission is unlikely to have any real effect.

"We are not at liberty to travel when we want," he explained, pointing to consumer needs, night-time delivery constraints and working time restrictions. "The prescriptiveness of the approach will simply cause costs to be passed on to consumers," he said, arguing in favour of a 'Cheapest Cost Avoider Principle', under which it would be left to the party that can prevent or abate the damage at the lowest cost for the overall economy to take action.

Green MEP Michael Cramer told EurActiv that he was disappointed with the proposals: "The Commission's study excludes accident and CO2 costs – the climate costs which are 80% of all the costs that transport is generating," he lamented, adding that he hoped Parliament would vote to toughen up the directive.

"We want fair competition between the modes of transport at least," he said, saying railways were suffering from the fact that most roads are still not covered by the tolls although rail is, as well as the fact aircraft still do not pay kerosene tax despite rail having to pay diesel tax. "That is unfair competition in favour of the modes of transport that are harmful for the climate, and not the opposite," he lamented.

"I hope that the Parliament will vote in a strong way – stronger than the Commission, but the conservatives are against it," he concluded.

To read the interview with Michael Cramer in full, please click here.

But in fact, German MEP Georg Jarzembowski, spokesman on transport for the EPP-ED, told EurActiv that his group thought it was "strange" that the Eurovignette Directive would remain voluntary. "If you want to internalise external costs because of the climate change issue, then all countries should do it," he said.

He further expressed his discontent with the fact that the directive only covers road transport.

"We are a little bit shocked that the Commission only proposes something for the road and is not preparing anything for the other modes of transport," he said.

But he agreed with the Commission that the costs of CO2 need not be included. "We have already today a spreading of the tariff according to Euro One to Euro Six standards – so the more polluting a truck is, the more it has to pay. This is already a type of CO2 criteria in the directive, because the tariff varies according to the pollution," he said, insisting that excluding CO2 from the scope of the Eurovignette does not go against the EU's climate goals.
To read the interview with Georg Jarzembowski in full, please click here.

Next steps:

8 July 2008: Commission to present its package on 'Greening Transport'.

31 Dec. 2010: Proposed deadline for member states to comply with the directive.

31 Dec. 2013: Commission to review progress under the directive and determine whether to introduce binding obligations and allow for the inclusion of CO2 in tolls.

Congress Should Wake Up and Smell the Burnt Brussels Biofuels Brew Before Imposing Counterproductive & Harmful Renewable Energy Mandates in the US

http://euobserver.com/9/26454

EU Signals Retreat On Biofuels Target

By LEIGH PHILLIPS

EU Observer

July 7, 2008

European energy ministers have backed away from the EU's biofuels for transport target, admitting a gross confusion on their part in which they said they had been misreading policy documents since the target was initially proposed a year and a half ago.

The ministers, meeting in Paris for informal discussions, said that upon closer inspection, EU proposals that aim for a target of 10 percent of fuels for cars and lorries coming from biofuels by 2020 in fact only demand that 10 percent of fuels come from renewable sources, which may or may not be the controversial energy source.

Bioethanol from Brazil, produced from sugar cane, does not compete with food staples (Photo: Wikipedia)

"The member states realised that the commission's plan specifies that 10 percent of transport needs must come from renewable energy, not 10 percent from biofuels," French energy and environment minister Jean-Louis Borloo told reporters at the conclusion of the meeting. [OOPS!!!]

Until now, it was believed that EU leaders last spring agreed that the EU should increase the use of biofuels in transport fuel to 10 percent by 2020, up from a planned 5.75 percent target to be achieved by 2010.

Jochen Homann, a state secretary in the German Ministry of Economics and Technology said he and his colleagues had "discovered" that the documents "do not speak of biofuels, but renewables," according to AFP.

"We have to decide if the quota can be kept," Mr Homann said. "It might be changed."

The retreat comes after months of pressure on the EU and US from environmental groups, development NGOs and international institutions such as the World Bank and the United Nations to adjust or abandon their biofuels policies.

Until a year ago, the alternative fuel source had widely been seen as a green alternative to petrol that also allowed European and developing world farmers to benefit from new markets for their crops.

At the international level however, there is now broad consensus that production of many biofuels releases as many greenhouse gases as the use of fossil fuels and that they have contributed to the global food crisis as farmers switch to growing crops for fuel instead of food.

The coup de grace for EU biofuels policy seems to have come on Friday, when a confidential internal World Bank report leaked to the UK's Guardian newspaper concluded that biofuels were responsible for 75 percent of the skyrocketing rise in food prices.

Mr Borloo said at the meeting that the policy could instead be interpreted to mean the deployment of hydrogen fuel cells or electric cars using electricity from alternative sources. [NICE ATTEMPT TO COVER UP YOUR BLUNDER!!]

Nonetheless, despite the re-reading, there has been no official policy change proposed. Meanwhile, the ministers are mulling over a proposal for a biofuels accord with Brazil.

Green MEP Claude Turmes, the deputy responsible for shepherding renewable energy legislation through the European Parliament, has suggested that the EU reach a bilateral agreement with the South American country, the biggest producer of bioethanol in the world.

"My analysis shows the only country where we can sustainably import substantial quantities of agri-fuels to the EU at the moment is Brazil," Mr Turmes said following the meeting, according to Reuters. [THAT IS, UNTIL YOU AND YOUR FELLOW BUREAUCRATS CAN FIND A WAY TO DECLARE BRAZILIAN SUGAR CANE-BASED ETHANOL UNSAFE, UNHEALTHY OR UNSUSTAINABLE IN ORDER TO BLOCK ITS IMPORTATION!!!]

Cap and Play: The New Carbon Emissions ('Hand is Quicker than the Eye') Game

http://www.rockymountainnews.com/news/2008/jun/04/cap-and-pay/


Cap and pay - Congress should reject uncertain promise of emissions crackdown

By Rocky Mountain News

Wednesday, June 4, 2008


We are fairly confident that the Climate Security Act, being debated this week in the U.S. Senate, will have at most a negligible impact on global warming.


For one thing, U.S. lawmakers cannot prevent China, India and other developing nations from expanding their industrial economies (nor should they); these growing societies are likely to produce much more carbon-based energy in the next two decades than the projected savings by the United States.


Though the bill is unlikely to pass, the Democratic and Republican presidential front-runners remain enthusiastic about the cap-and-trade process that is its cornerstone. A similar bill is almost certain to reappear next year.


Cap and trade is a recipe for energy rationing, big time. Washington would set a limit on national greenhouse gas emissions beginning at 2005 levels in 2012 and then going down by 2 percent a year from the same '05 base until 2050.

Since electricity production, transportation and manufacturing account for 81 percent of U.S. greenhouse gas emissions, the bill would target those activities - in other words, the heart and soul of our economy. Power plants, fuel refineries and manufacturers would get allowances under the cap (a permit to pollute, if you will) each year. Those seeking to exceed their government- imposed limits could buy credits from other permit holders that have not.
Under the legislation, emissions allowances would be forced downward every year, even as energy demand is expected to rise. As a result, allowances will get more expensive.

The cost of anything produced with fossil fuels will go up. Economists at MIT estimate that by 2015 the Climate Security Act would raise the price of gas by 29 percent, electricity by 55 percent and natural gas by 15 percent. The Congressional Budget Office is not as pessimistic, but still it predicts that a 15 percent cut in greenhouse gas emissions (which would be mandated within a few years of passage) would boost the average household's energy bill by $1,300 a year.
But the truth is that these models - and others that predict virtually no economic impact, or much worse - are educated guesswork. All that can be said with certainty is that carbon-based energy costs will steadily rise; that, after all, is the idea.


These higher consumer costs would percolate through the economy since nearly everything requires energy to be produced. Washington also stands to land a sizable windfall - between $3.3 trillion and $7 trillion over the next four decades, according to bill sponsors. The feds would get the money auctioning emission allowances each year.


Not only will Washington do well in terms of revenue; regulators' powers will be vastly expanded. American families won't be so lucky, since Congress hasn't planned offsetting tax cuts to cushion individuals and businesses from the financial blow.


A revenue-neutral plan pairing legislation with broad-based tax cuts would at least make the bill more palatable. For that matter, most economists will tell you that a straight carbon tax (also offset, we'd hope, with tax cuts elsewhere) makes more sense than cap and trade because the tax is visible and involves smaller transaction costs; a cap-and-trade system would be incredibly complex and its effects largely obscure to the average American.


Someday the United States will transition from a fossil fuel economy, and the ground for it is being laid right now through major investments in research into alternative technologies. But the needed breakthroughs are best fostered by policies that encourage economic growth, not retard it.


Proponents of this legislation are asking Americans to accept a reduction in their living standards for decades, perhaps a significant one, in exchange for an uncertain payoff many decades in the future. That's hardly a bargain.

© Rocky Mountain News

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http://online.wsj.com/article/SB121236237789236363.html?mod=opinion_main_review_and_outlooks

WALL STREET JOURNAL

REVIEW & OUTLOOK


Cap and Spend


June 2, 2008; Page A16


As the Senate opens debate on its mammoth carbon regulation program this week, the phrase of the hour is "cap and trade." This sounds innocuous enough. But anyone who looks at the legislative details will quickly see that a better description is cap and spend. This is easily the largest income redistribution scheme since the income tax.


Sponsored by Joe Lieberman and John Warner, the bill would put a cap on carbon emissions that gets lowered every year. But to ease the pain and allow for economic adjustment, the bill would dole out "allowances" under the cap that would stand for the right to emit greenhouse gases. Senator Barbara Boxer has introduced a package of manager's amendments that mandates total carbon reductions of 66% by 2050, while earmarking the allowances.


When cap and trade has been used in the past, such as to reduce acid rain, the allowances were usually distributed for free. A major difference this time is that the allowances will be auctioned off to covered businesses, which means imposing an upfront tax before the trade half of cap and trade even begins. It also means a gigantic revenue windfall for Congress.


Ms. Boxer expects to scoop up auction revenues of some $3.32 trillion by 2050. Yes, that's trillion. Her friends in Congress are already salivating over this new pot of gold. The way Congress works, the most vicious floor fights won't be over whether this is a useful tax to create, but over who gets what portion of the spoils. In a conference call with reporters last Thursday, Massachusetts Senator John Kerry explained that he was disturbed by the effects of global warming on "crustaceans" and so would be pursuing changes to ensure that New England lobsters benefit from some of the loot.


Of course most of the money will go to human constituencies, especially those with the most political clout. In the Boxer plan, revenues are allocated down to the last dime over the next half-century. Thus $802 billion would go for "relief" for low-income taxpayers, to offset the higher cost of lighting homes or driving cars. Ms. Boxer will judge if you earn too much to qualify.


There's also $190 billion to fund training for "green-collar jobs," which are supposed to replace the jobs that will be lost in carbon-emitting industries. Another $288 billion would go to "wildlife adaptation," whatever that means, and another $237 billion to the states for the same goal. Some $342 billion would be spent on international aid, $171 billion for mass transit, and untold billions for alternative energy and research – and we're just starting.


Ms. Boxer would only auction about half of the carbon allowances; she reserves the rest for politically favored supplicants. These groups might be Indian tribes (big campaign donors!), or states rewarded for "taking the lead" on emissions reductions like Ms. Boxer's California. Those lucky winners would be able to sell those allowances for cash. The Senator estimates that the value of the handouts totals $3.42 trillion. For those keeping track, that's more than $6.7 trillion in revenue handouts so far.


The bill also tries to buy off businesses that might otherwise try to defeat the legislation. Thus carbon-heavy manufacturers like steel and cement will get $213 billion "to help them adjust," while fossil-fuel utilities will get $307 billion in "transition assistance." No less than $34 billion is headed to oil refiners. Given that all of these folks have powerful Senate friends, they will probably extract a larger ransom if cap and trade ever does become law.


If Congress is really going to impose this carbon tax in the name of saving mankind, the least it should do is forego all of this political largesse. In return for this new tax, Congress should cut taxes elsewhere to make the bill revenue neutral. A "tax swap" would offset the deadweight taxes that impede growth and reduce employment. All the more so because even the cap-and-trade friendly Environmental Protection Agency estimates that the bill would reduce GDP between $1 trillion and $2.8 trillion by 2050.


Most liberal economists favor using the money to reduce the payroll tax. That has the disadvantage politically of adding Social Security into the debate. A cleaner tax swap would compensate for the new tax on business by cutting taxes on investment – such as slashing the 35% U.S. corporate rate that is the second highest in the developed world. Then there's the 2001 and 2003 tax cuts, which are set to expire in 2010 and would raise the overall tax burden by $2.8 trillion over the next decade. Democrats who want to raise taxes on capital gains and dividends are proposing a double tax wallop by embracing Warner-Lieberman-Boxer.


All of this helps explain why so many in Congress are so enamored of "doing something" about global warming. They would lay claim to a vast new chunk of the private economy and enhance their own political power.

EU Influences, Congressional Climate Change Chicanery and Environmental Extremists Continue to Hold U.S. Energy Security Hostage

http://news.aol.com/story/_a/bush-renews-call-for-offshore-oil/20080618093109990001

Bush Renews Call for Offshore Oil Drilling


By H. JOSEF HEBERT,


AP


June 18, 2008


WASHINGTON (June 18) -- With gasoline topping $4 a gallon, President Bush urged Congress on Wednesday to lift its long-standing ban on offshore oil and gas drilling, saying the United States needs to increase its energy production. Democrats quickly rejected the idea."There is no excuse for delay," the president said in a statement in the Rose Garden. With the presidential election just months away, Bush made a pointed attack on Democrats, accusing them of obstructing his energy proposals and blaming them for high gasoline costs. His proposal echoed a call by Republican presidential candidate John McCain to open the Continental Shelf for exploration.


"Families across the country are looking to Washington for a response," Bush said.


Congressional Democrats were quick to reject the push for lifting the drilling moratorium, saying oil companies already have 68 million acres offshore waters under lease that are not being developed. [???]


House Speaker Nancy Pelosi called Bush's proposals "another page from (an)... energy policy that was literally written by the oil industry — give away more public resources."


[MS. PELOSI PREFERS AN ENERGY POLICY WRITTEN BY THE EUROPEANS AND THE ENVIRONMENTAL EXTREMISTS]

Sen. Barack Obama, the Democrats' presumptive presidential nominee, rejected lifting the drilling moratorium that has been supported by a succession of presidents for nearly two decades.


[MR. OBAMA WOULD PREFER HIGHER GAS, OIL PRICES, AS THE EUROPEANS AND THE ENVIRONMENTAL EXTREMISTS WANT, SO THAT WE COULD JOIN WITH THEM IN CLIMATE CHANGE KUMBAYA!!]


"This is not something that's going to give consumers short-term relief and it is not a long-term solution to our problems with fossil fuels generally and oil in particular," said Obama. Senate Majority Leader Harry Reid, lumping Bush with McCain, accused them of staging a "cynical campaign ploy" that won't help lower energy prices.


"Despite what President Bush, John McCain and their friends in the oil industry claim, we cannot drill our way out of this problem," Reid said. "The math is simple: America has just three percent of the world's oil reserves, but Americans use a quarter of its oil."


[MESSRS. OBAMA AND REID: THE MATH IS SIMPLE - WINDMILLS, SOLAR PANELS AND ETHANOL ARE NOT GOING TO MEET CURRENT OR FUTURE U.S. ENERGY NEEDS ALONE. THE U.S. NEEDS TO EXPLOIT ALL ENERGY SOURCES AND TO DEPLOY CLEANER TECHNOLOGIES ALONG THE WAY TO ADDRESS OUR IMMEDIATE ENERGY CRISIS.]


Bush said offshore drilling could yield up to 18 billion barrels of oil over time, although it would take years for production to start. Bush also said offshore drilling would take pressure off prices over time.


[THIS IS TRUE, GIVEN THE PSYCHOLOGY OF THE MARKETS WHICH LOOK FOR POLICY DIRECTION AND POCKET BOOK RELIEF.]


There are two prohibitions on offshore drilling, one imposed by Congress and another by executive order signed by Bush's father in 1990. Bush's brother, Jeb, fiercely opposed offshore drilling when he was governor of Florida. What the president now proposes would rescind his father's decision — but the president took the position that Congress has to act first and then he would follow behind.


Asked why Bush doesn't act first and lift the ban, Keith Hennessey, the director of the president's economic council, said: "He thinks that probably the most productive way to work with this Congress is to try to do it in tandem."


Before Bush spoke, the House Appropriations Committee postponed a vote it had scheduled for Wednesday on legislation doing the opposite of what the president asked — extending Congress' ban on offshore drilling. Lawmakers said they wanted to focus on a disaster relief bill for the battered Midwest.


Bush also proposed opening the Arctic National Wildlife Refuge for drilling, lifting restrictions on oil shale leasing in the Green River Basin of Colorado, Utah and Wyoming and easing the regulatory process to expand oil refining capacity.


[WHILE ANWR IS NOT NECESSARY, THERE IS NO LOGICAL REASON WHY OIL SHALE LEASING IN THE GREEN RIVER BASIN OF COLORADO, UTAH AND WYOMING, AND EVEN COAL MINING IN MONTANA SHOULD NOT PROCEED IMMEDIATELY. THE ONLY REASON WHY THEY HAVE NOT PROCEEDED, IS BECAUSE OF ENVIRONMENTAL EXTREMIST OPPOSITION AND CONGRESSIONAL MAJORITY SUPPORT.]


[See: Why Do Environmentalists Continue to Block Montana's Exploitation of Vast Inexpensive Coal Reserves That Could Be Made Greener With New Technologies? , ITSSD Journal on Energy Security, at: http://itssdenergysecurity.blogspot.com/2008/06/why-do-environmentalists-continue-to.html ; Are Wall Street Carbon Credit Traders So 'Invested' That They Are Blocking Exploitation of Known U.S. Oil Reserves in Montana??, ITSSD Journal on Energy Security, at: http://itssdenergysecurity.blogspot.com/2008/06/are-wall-street-carbon-credit-traders.html ; Former Greenpeace Co-Founder Exposes 'Pop-Environmentalism' as the Root of Climate Change Hysteria, While Calmly Discussing Virtues of Nuclear Energy, ITSSD Journal on Energy Security, at: http://itssdenergysecurity.blogspot.com/2008/04/former-greenpeace-co-founder-exposes.html .]


With Americans deeply pessimistic about the economy, Bush tried to put on the onus on Congress. He acknowledged that his new proposals would take years to have a full effect, hardly the type of news that will help drivers at the gas stations now. The White House says no quick fix exists.Still, Bush said Congress was obstructing progress — and directly contributing to consumers' pain at the pump.


"I know the Democratic leaders have opposed some of these policies in the past," Bush said. "Now that their opposition has helped drive gas prices to record levels, I ask them to reconsider their positions.


"Bush said that if congressional leaders head home for their July 4 recess without taking action, they will need to explain why "$4 a gallon gasoline is not enough incentive for them to act. And Americans will rightly ask how high gas prices have to rise before the Democratic-controlled Congress will do something about it."


Bush said restrictions on offshore drilling have become "outdated and counterproductive.


"In a nod to the environmental arguments against drilling, Bush said technology has come a long way. These days, he said, oil exploration off the coastline can be done in a way that "is out of sight, protects coral reefs and habitats, and protects against oil spills."


Congressional Democrats, joined by some GOP lawmakers from coastal states, have opposed lifting the prohibition that has barred energy companies from waters along both the East and West coasts and in the eastern Gulf of Mexico for 27 years.


On Monday, McCain made lifting the federal ban on offshore oil and gas development a key part of his energy plan. McCain said states should be allowed to pursue energy exploration in waters near their coasts and get some of the royalty revenue.Obama retorted that the Arizona senator had flip-flopped on that issue.

Copyright 2008 The Associated Press.

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The following excerpts are taken from: Lawrence A. Kogan, ARCTIC ESCAPADES - Can The Precautionary Principle Be Invoked via UNCLOS to Undermine U.S. Polar Interests?, Prepared for the National Defense University Symposium "Unfrozen Treasures- National Security, Climate Change and the Arctic Frontier", (May 14, 2008, at pp. 47-48, at: http://www.itssd.org/Programs/KOGANIII.ppt .


►The U.S. oil & gas industries support US ratification of the UNCLOS & its application in the Arctic because U.S. environmental activists have thus far left the OCS in [the northern shores of] Alaska as the only place within the U.S. to undertake new drilling. Wouldn’t it be rational for the USG to reopen OCS drilling along the eastern & western U.S. coastlines, and to enable U.S. coastal states to share in the revenues, to ensure US energy security in the short-medium term while newer cleaner technologies are being developed???


§“Oil and gas leasing has been prohibited on most of the outer continental shelf (OCS) since the 1980s. Congress has enacted OCS leasing moratoria for each of fiscal years 1982-2006 in the annual Interior Appropriations bill, allowing leasing only in the Gulf of Mexico (except near Florida) and parts of Alaska. President George H.W. Bush in 1990 issued a Presidential Directive ordering the Department of the Interior not to conduct offshore leasing or preleasing activity in areas covered by the annual legislative moratoria until 2000. In 1998 President Clinton extended the offshore leasing prohibition until 2012. Proponents of the moratoria contend that offshore drilling would pose unacceptable environmental risks and threaten coastal tourism industries, while supporters of expanded offshore leasing counter that more domestic oil and gas production is vital for the nation’s energy security.” (See: Marc Humphries, Outer Continental Shelf: Debate Over Oil & Gas Leasing and Revenue Sharing, CRS Issue Brief for Congress (April 7, 2006) at p. CRS-1).


►U.S. environmental activists effectively invoke the Precautionary Principle – they recently sued to block ALL OCS oil & drilling around Alaska, alleging that “the Minerals Management Service did not fairly evaluate the potential effects if offshore petroleum fields were developed in the lease area...


§“Earthjustice attorney Eric Jorgensen said the lawsuit does not seek an injunction to block the sale, but asks the court to declare leases invalid if they are sold improperly. He said the groups hope federal authorities will cancel the sale based on the lawsuit and pending legislation. On Tuesday, U.S. Sen. John Kerry, D-Mass., introduced legislation to prohibit oil and gas exploration in the Beaufort and Chukchi seas until the full effect on polar bear populations was understood. Jorgensen said the lawsuit seeks a more thorough environmental review.” (See: Environmentalists, Natives Sue Feds to Halt Petroleum Lease Sale in Alaska, Associated Press (Feb. 1, 2008)).



§“Environmental groups and Alaska Natives who harvest whales, seals, walrus and salmon said not one acre should have been opened for drilling until oil companies prove they can overcome a basic environmental hurdle: cleaning up a major spill in sea water that's partially covered by broken ice. No oil spill responders have demonstrated that they can clean up oil in broken ice that ranges from slush to cakes, said Margaret Williams of the World Wildlife Fund in Alaska...The same conditions that contribute to oil spill risk — darkness during the long Alaska winter, extreme cold, moving ice, high wind and low visibility — would make spill response difficult or ineffective, according to the WWF...The stakes are enormous as federal policy makers look to find new sources of domestic oil and conservation groups turn to lawsuits to protect northern marine mammals and birds already facing habitat loss from the effects of global warming on sea ice... Williams said the MMS pushed ahead with the Chukchi sale despite information gaps, including an agreement for spill cleanup with Russia. The burden to prove risk continues to fall on conservation groups, she said. The Arctic and vulnerable wildlife already are undergoing stresses with global warming and don't need more from seismic activity, marine traffic and the potential for petroleum spills, she said. (See: Icy Area Opens to Drills, But What About Spills, Associated Press (April 13, 2008)).


... ►Apparently, Ted Stevens, the U.S. Senator from Alaska, sought administration support for OCS drilling to bring jobs & economic growth to the State of Alaska, and suggested that Alaska be cited as an example of how USG OCS licensing could be structured elsewhere in the U.S. (See: Senator Stevens Asks for Bush Administration Support for OCS Revenue Sharing for Alaska, Opening ANWR, Press Release, Office of United States Senator Ted Stevens for Alaska (April 15, 2008)).

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U.S. environmental extremist groups have been notorious over the years for blocking the exploration and drilling for oil and natural gas along U.S. coastlines and up to 200 miles therefrom. However, many Americans have only begun to realize how U.S. environmental extremist groups, now backed by the 110th Congressional Majority, have long blocked the construction of use of nuclear power, clean coal technology using plants, hydroelectric power stations and of liquified natural gas terminals (even if the gas is not drilled in the US). Without any exploration and drilling over the past several decades, this type of policymaking has left the United States in an extreme energy security quandary.


The political debate seems now to be focused only on what the environmentalists will let the country do or not do. This sounds pretty similar to what occurs in the European Union, and has practically left the EU with high fuel and home heating & airconditioning costs and dependent on natural gas imports from volatile, unfriendly and/or unreliable regimes.


Is this what we want for the U.S.? Who will step into the current political leadership vacuum??


How much do Americans have to suffer before something is done??


How can the president and the congress permit the environmental extremists to kidnap and hold hostage to their demands our country's energy security and the well being of the U.S. economy???


Don't our leaders understand that the market prices of oil, gas and other energy sources is largely psychological, and that their policies and prescriptions must prudently address that psychology?


Why hasn't the president tapped the U.S. Strategic Petroleum Reserve to relieve the pressure on oil prices??


Is it prohibited from doing so by the International Energy Agency??


"According to the United States Energy Information Administration, approximately 4.1 billion barrels (650,000,000 m³) of oil are held in strategic reserves, of which 1.4 billion is government-controlled. The remainder is held by private industry. At the moment the US Strategic Petroleum Reserve is one of the largest strategic reserves, with much of the remainder held by the other 26 members of the International Energy Agency.[1] Recently, other non-IEA countries have begun creating their own strategic petroleum reserves, with China being the largest of these new reserves. According to a March 2001 agreement, all 26 members of the International Energy Agency must have a strategic petroleum reserve equal to 90 days of oil imports for their respective country...In addition to maintaining a domestic stockpile of petroleum, several countries also have agreements to share their stockpiles in the event of an emergency...The United States has the largest reported Strategic Petroleum Reserve with a total capacity of 727 million barrels. If completely filled, the US SPR could theoretically replace about 60 days of oil imports." See Global Strategic Petroleum Reserves, Wikipedia at: http://en.wikipedia.org/wiki/Global_strategic_petroleum_reserves .


Apparently, the U.S. cannot touch its Strategic Petroleum Reserves because of the European Union dominated and climate change-focused Organization for Economic Cooperation and Development (OECD) International Energy Agency Treaty by which it is bound:


"The International Energy Agency (IEA, or AIE in Romance languages) is a Paris-based intergovernmental organization founded by the Organisation for Economic Co-operation and Development (OECD) in 1974 in the wake of the oil crisis. The IEA was initially dedicated to preventing disruptions in the supply of oil, as well as acting as an information source on statistics about the international oil market and other energy sectors. Recently, they have expanded their mandate to include energy security, economic development, and environmental protection. The latter has focused on mitigating climate change.[1] [Environment (HTML). OECD/IEA. Retrieved on 2007-12-23. ] They have a role in promoting and developing alternate energy sources, rational energy policies, and multinational energy technology co-operation. Until recently, it did not study nuclear power in detail, except as a contribution to the overall energy balance and economy. Nuclear power is also covered by the Nuclear Energy Agency of the OECD and the International Atomic Energy Agency of the United Nations.


IEA member countries are required to maintain total oil stock levels equivalent to at least 90 days of net imports. At the end of June 2007, IEA member countries held a combined stockpile of almost 4.1 billion barrels of oil, 1.5 billion of which governments control for emergency use." See International Energy Agency, Wikipedia at: http://en.wikipedia.org/wiki/International_Energy_Agency .


One last question for our leaders: How much longer will you permit the EU-dominated and climate change focused IEA determine U.S. emergency needs???

Expensive Precautionary Principle-Based Global Warming Fears Block Deployment of Promising New Technologies Needed to Achieve Energy Security

http://www.nytimes.com/2008/06/08/weekinreview/08wald.html

Running in Circles Over Carbon


By MATTHEW L. WALD


New York Times


June 8, 2008


WASHINGTON— Cutting carbon dioxide emissions is a fine idea, and a lot of companies would be proud to do it. But they would prefer to be second, if not third or fourth.


This is not a good way to get started in fighting global warming.


As efforts to pass a global warming bill collapsed in the Senate last week, companies that burn coal to make electricity were looking for a way to build a plant that would capture its emissions. There is a will and a way — several ways, in fact — to do just that.


Capturing carbon from these plants may become a lot more important soon. Emissions from coal-fired power plants already account for about 27 percent of American greenhouse emissions, but as prices for other fuels rise, along with power demand, utilities will burn more coal. And if cars someday run on batteries, a trend that $4-a-gallon gasoline will accelerate, then the utilities will burn even more fuel to generate the electricity to recharge those batteries.


This could be good news, because controlling emissions from a few hundred power plants is easier than controlling them from tens of millions of house chimneys, or hundreds of millions of tailpipes. And in the laboratory, at least, there are three very promising systems for capturing carbon dioxide before pumping it underground.


But supplying electricity is not like most other businesses. Unlike the companies that make microchips, clothing for teenagers or snack foods, the companies that make electricity can see no advantage in going first. This is true for the traditionally regulated utilities that can charge everything to a captive class of customers (if regulators approve), and it is also true for the “merchant generators,” who build power plants and sell their output on the open market.


“No one wants to go into the new world,” said Armond Cohen, executive director of the Clean Air Task Force, a nonprofit group that favors stringent controls on power plant emissions. “We have very few takers because of the price premium.”


By price premium, Mr. Cohen meant not only the costs of going first, with the high probability of mistakes that others can learn from, but the costs of the new technology itself. The problem is, the premium is of unknown size, which makes everyone in the industry especially wary.


[IF THIS IS THE CASE, HOW CAN U.S. SENATOR BARBARA BOXER HONESTLY SAY THAT THE 'CAP & TRADE' CLIMATE CHANGE BILL SHE SUPPORTS WILL NOT RAISE ENERGY, GOODS & SERVICES PRICES???].


The point was illustrated by a recent decision by the Virginia State Corporation Commission, which regulates utilities, to turn down an application by the Appalachian Power Company to build a plant that would have captured 90 percent of its carbon and deposited it nearly two miles underground, at a well that it dug in 2003. The applicant’s parent was American Electric Power, one of the nation’s largest coal users, and perhaps the most technically able. But the company is a regulated utility and spends money only when it can be reimbursed.


The Virginia commission said that it was “neither reasonable nor prudent” for the company to build the plant, and the risks for ratepayers were too great, because costs were uncertain, perhaps double that of a standard coal plant. And in a Catch-22 that plagues the whole effort, the commission said A.E.P. should not build a commercial-scale plant because no one had demonstrated the technology on a commercial scale.


Thus an approach that makes collective sense — trying out technologies that could be helpful over the long term — is unattractive to individual participants.


That is not the only where-to-get-started problem. Another is that building a plant might make sense to a utility regulator, or to a company that builds power plants on speculation, if it generated pollution credits that the company could then sell to other polluters, for instance, or could help the plant meet emissions quotas. But there are, as yet, no credits to buy or sell and no quota to meet.


When Congress debates the idea, one of the drawbacks is that no one is sure where to set the caps on emissions, because no one is sure what the carbon regulation would cost. So there is no regulation, no plant built to meet the regulation, and thus no plant for lawmakers to look at to determine how strict a regulation to pass.


Carbon capture is not the only field in which nobody wants to go first; another is nuclear power. Builders in that industry also recognize that the first to build a next-generation reactor (the last one ordered that was actually built was in 1973) will pay a lot more than the builders who follow. But Congress has tried, at least, to solve that problem by offering generous loan guarantees and risk insurance for the first few reactors. There was a plan to heavily subsidize a single capture-and-storage coal plant, but when the estimated construction price nearly doubled, to $1.8 billion, the Energy Department dropped the plan.


And without full-scale tests, nobody knows what all this would cost.


“The estimates are accurate to within plus 20 percent to plus 100 percent,” said John Rowe, the chief executive of Exelon, which burns coal and also operates nuclear reactors, and leans toward the latter for new projects. “These are very complicated projects, with a great deal of both science and engineering and of public acceptability tests that have simply not happened yet,” he said. In contrast, he argued, nuclear is easier.


While others differ, or argue that solar or wind would be a better bet, the failure to get started does have a certain circularity to it. Companies will not run to build plants that sequester their carbon because Congress has not set a price for emitting the pollutant. Without the early plants, Congress has little clue how many tons the economy can afford to capture and sequester.


[CONGRESS NEEDS TO INCENTIVIZE THE TECHNOLOGY & INNOVATION CYCLE, NOT PENALIZE IT.]

Religious Environmentalists Must Yield to Pragmatic Energy & Economic Concerns

http://news.aol.com/story/_a/g-8-to-fight-oil-prices-with-efficiency/n20080608085309990011

G-8 to fight oil prices with efficiency, tech


By JOSEPH COLEMAN,


Associated Press


June 8, 2008


AOMORI, Japan (AP) - The world's top industrialized nations and leading oil consumers pledged Sunday to fight skyrocketing energy prices by increasing efficiency and accelerating investment in new technologies, while urging producers to expand production.


Energy ministers from the Group of Eight countries, joined by China, India and South Korea, voiced concerns over record oil prices and said both producers and consumers would benefit from greater market stability.


Ministers, meeting in the northern Japanese city of Aomori, focused Sunday on how they could diversify their energy sources to both control rising demand for oil and rein in emissions of greenhouse gases blamed for global warming.


"We simply must increase the level and breadth of investment all around the world," said U.S. Energy Secretary Samuel Bodman. "That means promoting aggressive investment in renewable energy and other alternative energies technologies, as well as the development of traditional hydrocarbon resources."


The 11 nations, which account for 65 percent of the world's energy consumption, grappled with oil prices that have hit record highs. Prices made a massive 8 percent gain Friday to $138.54 on the New York Mercantile Exchange.


The G-8 countries - the United States, Russia, Japan, Germany, France, Italy, Canada and Britain - laid out in a statement ways of cutting their dependence on oil.


They pledged to launch 20 demonstration projects by 2010 on so-called "carbon capture and storage," which would allow power plants to catch emissions and inject them into underground storage spaces.


While that technology is still in its infancy, proponents say it could eventually allow the expanded exploitation of the world's abundant supply of cheap coal without polluting the environment and speeding global warming.


There were clear rifts, however, on how to approach the expansion of nuclear energy. The carefully worded joint statement called for assurances on safety and security of nuclear materials, but several nations said they were enthusiastic about building new reactors.


The International Energy Agency, in a report issued last week, estimated the world would have to construct 32 new nuclear power plants each year from now until 2050 as part of an effort to cut global greenhouse gas emissions by 50 percent.


"I think we're on the verge of a new nuclear age and that will be a positive thing for the world," said John Hutton, British secretary of state for business enterprise and regulatory reform.


Germany, however, said it would not join the effort. Jochen Homann, Germany's economics minister, said Berlin was sticking to its decision to phase out nuclear power.


The G-8, China, India and South Korea also established the International Partnership for Energy Efficiency Cooperation to promote best practices in conserving energy.


While the participants called for more oil production, it could take months to get a response. Production levels have been flat for three years and Chakib Khelil, the president of the Organization of Petroleum Exporting Countries, has said the group will make no new decision on output until a Sept. 9 meeting in Vienna.


The ministers met amid rising concerns that soaring oil prices could trigger global economic troubles. Fanning such fears, both Japan and the United States have announced higher unemployment rates in recent weeks.


"The situation regarding energy prices is becoming extremely challenging," warned Akira Amari, Japan's trade and energy minister. "If left unaddressed, it may well cause a recession in the global economy.


"The Sunday meeting followed a joint statement by five top energy consumers - the U.S., Japan, China, India and South Korea - that warned high prices were a menace to the world economy and more petroleum should be produced to meet rising demand. They argued the unprecedented prices were against the interests of both producers and consumers, and imposed a "heavy burden" on developing countries.


The group, however, diverged over oil subsidies. The International Energy Agency has estimated that oil subsidies in China, India and the Middle East totaled about $55 billion in 2007.


The United States urged countries such as China to lower oil supports, which buoy demand, while poorer developing nations said removing subsidies could trigger political and economic unrest.

A Reverse Senate 'Boxer Rebellion' Previously Sought to Enhance Foreign (European) Regulatory Influence in U.S.

http://epw.senate.gov/public/index.cfm?FuseAction=Majority.PressReleases&ContentRecord_id=ae230690-802a-23ad-4b41-cfdc0d90bac6&Region_id=&Issue_id=

Boxer Introduces Bill to Reverse EPA Global Warming Waiver Decision


U.S. Senate Committee on Environment and Public Works


January 24, 2008


[THE REFERENCE ABOVE TO A REVERSE 'BOXER REBELLION' IS INTENTIONAL, AS IT IMPLIES HOW SENATOR BARBARA BOXER IS ENDEAVORING TO IMPORT EUROPEAN NON-SCIENCE & NON-ECONOMICS-BASED PRECAUTIONARY PRINCIPLE CLIMATE CHANGE REGULATIONS INTO THE UNITED STATES AS U.S. LAW. THE 'BOXER REBELLION' IS ACTUALLY AN HISTORICAL EVENT THAT TOOK PLACE AT THE BEGINNING OF THE 20TH CENTURY IN CHINA. UNLIKE SENATOR
BOXER'S INVITING FOREIGN INFLUENCES INTO THE U.S., THE CHINESE BOXER REBELLION REFLECTED CHINESE PEASANT'S REPULSION OF FOREIGN INFLUENCES. "The Boxer Rebellion, or Boxer Movement, was an uprising by members of the Chinese Society of Right and Harmonious Fists against foreign influence in areas such as trade, politics, religion and technology. It took place in China from November 1899 to 7 September 1901, during the final years of the Manchu rule (Qing Dynasty). The members of the Society of Right and Harmonious Fists were simply called 'Boxers' by the Westerners due to the martial arts and calisthenics they practiced. The uprising began as an anti-foreign, anti-imperialist peasant-based movement in northern China. They attacked foreigners who were building railroads and violating Feng shui, as well as Christians, who were held responsible for the foreign domination of China." See Wikipedia at: http://en.wikipedia.org/wiki/Boxer_Rebellion ].


UPDATED: This release has been revised to include quotes from Senators Olympia Snowe (R-ME) and Robert Menendez (D-NJ) as original cosponsors.


Washington, DC - U.S. Senator Barbara Boxer (D-CA), Chairman of the Senate Committee on Environment and Public Works, introduced legislation today that would direct the U.S. Environmental Protection Agency (EPA) to grant California a waiver under the Clean Air Act to cut global warming pollution from motor vehicles.


Cosponsors of the bill include Senators Dianne Feinstein (D-CA), Joseph Lieberman (ID, CT), Hillary Clinton (D-NY), Frank Lautenberg (D-NJ), Benjamin Cardin (D-MD), Bernie Sanders (I-VT), Sheldon Whitehouse (D-RI), Edward Kennedy (D-MA), Patrick Leahy (D-VT), Christopher Dodd (D-CT), John Kerry (D-MA), Barbara A. Mikulski (D-MD), Olympia Snowe (R-ME), Susan Collins (R-ME), Bill Nelson (D-FL.) Barack Obama (D, IL), and Roberts Menendez (D-NJ).


Senator Boxer said, "Administrator Johnson's decision to deny the waiver was not supported by the facts, by the law, by the science, or by precedent. I will use every available tool to ensure that California and the nation are able to reduce the pollution that causes global warming. One of those tools is legislation that essentially overturns Mr. Johnson's actions."


Senator Feinstein said, "It's become clear that Administrator Johnson's denial of California's waiver was based on politics, not science. Even the EPA's own experts have said that there was a compelling need for action. So, today, Senator Boxer and I have introduced legislation to take this decision out of the hands of the EPA - and allow California to move ahead with curbing tailpipe emissions. Bottom line: I'm committed to protecting California's landmark global warming efforts - and will do everything in my power to ensure that this Administration doesn't stand in the way."


Senator Lieberman said, "The vision and leadership of California, Connecticut, and the other states that have moved to curb global warming pollution from cars should be rewarded by the grant of authority to implement the states' programs. In the wake of the Bush administration's failure to follow federal law and deliver the needed authority, we in Congress must step in with legislation that gives the states the go-ahead to fight climate change."


Senator Clinton said, "It is outrageous that the Bush Administration chose to block the efforts of New York, California and many other states that want to reduce greenhouse gas emissions from vehicles. Chairman Boxer's continued oversight on this issue is critically important, and I am proud to join with her in introducing legislation to overturn EPA's wrongheaded decision and allow states to move forward on global warming."


Senator Lautenberg said: "It's bad enough the Bush Administration has been sitting on its hands and done virtually nothing to fight global warming, but now it's trying to block states from taking strong action on their own. Our legislation would work to overturn this misguided decision and allow states like New Jersey and California to continue their efforts to reduce greenhouse gases and combat global warming."


Senator Cardin said, "The EPA has clearly chosen to ignore the issue of global warming. It's time that States are allowed to take meaningful action to protect the health of their citizens by reducing greenhouse gas emissions."


Senator Sanders told the EPA administrator, "If you can't do the right thing, at least get out of the way of California, Vermont and other states. If we do not move aggressively, this planet is in danger."


Senator Whitehouse said, "Allowing Rhode Island and all these states to set tough vehicle emissions standards is one of the strongest and most common-sense steps we can take to begin to tackle the enormous challenge of global warming. But once again, this administration has put blind ideology before science; once again, this administration has let politics govern policy; and once again, this administration has taken an action that will directly undermine our efforts to protect our environment and safeguard public health. I applaud Chairman Boxer's commitment to addressing this issue and am proud to cosponsor this important bill."


Senator Kennedy said, "It's extremely unfortunate that the Administration has stood in the way of states' efforts to reduce greenhouse gas emissions from vehicles. I commend Senator Boxer for her leadership in filing this bill, which is so vital to states like Massachusetts and California which are ready to do the things necessary to curb global warming in spite of the obstacles EPA has set."


Senator Leahy said, "The Bush Administration has been AWOL or worse on air quality issues, and now they even want to undermine states like California and Vermont that are trying to pick up the slack. They won't lead and they won't follow, so the Boxer bill would force them at least to get out of the way and stop obstructing states like ours that are trying to lead on clean air policy."


Senator Dodd said, "The EPA's decision in December to deny the request by California, Connecticut, and 15 other states for the authority to regulate greenhouse gas emissions from motor vehicles was a politically-motivated roadblock erected to stop responsible solutions to the growing problem of global warming. Indeed, evidence suggests that EPA Administrator Stephen Johnson ignored the advice of his own climate experts, who recommended that this request be approved. This bill restores those efforts to address one of the most pressing issues of our day. I thank Senator Boxer for her leadership on this issue and am committed to seeing this important piece of legislation passed."


Senator Kerry said, "If the Bush Administration refuses to combat climate change, they at least need to get out of the way when the states do. California needs this waiver, and deserves a lot of credit for meeting an environmental challenge with the reform it demands."


Senator Mikulski said, "The world is facing a climate crisis and we must act now. Maryland and a number of other states have already joined California in setting a higher bar to reduce greenhouse gas emissions from vehicles than the federal government has. The country is looking to us for leadership. As we continue to assist our manufacturing industries in making this transition, we need to set the standard so states can do the right thing."


Senator Snowe said, "I am deeply disappointed that the Administration failed to follow the statute outlined in the Clean Air Act that allows California to adopt distinct environmental laws. This is a setback for Maine and as well as our national environmental stewardship. Although I am confident that the court system will ultimately overturn this decision, I am troubled that this Administration has unnecessarily delayed enactment of a strong curtailment of greenhouse gas emissions. This legislation will allow the states to move forward with enacting strong reductions in green house gas emissions filling the void of federal action."


Senator Collins said, "Climate change is one of the most daunting challenges we face and we must develop reasonable solutions to reduce our greenhouse gas emissions. If states, like my home state of Maine, establish reasonable standards to help address this serious problem, the federal government should not stand in the way."


Senator Nelson said, "The failure of the Bush administration to allow states to clean up auto emissions means that Congress is going to have to step in and pass this legislation."
Senator Obama said, "Effectively tackling global warming demands bold and innovative solutions, and given the failure of this Administration to act, California should be allowed to pioneer. I commend Chairman Boxer for her leadership on this bill and on working to eliminate the damaging consequences of climate change around the world."


Sen. Menendez said: "Our planet is in peril and this administration simply refuses to let anyone do very much about it. Under this administration, the EPA is acting like the ‘Environmental Pollution Agency'. Since they won't act, states that want to undertake serious efforts to clean our air should not have their hands tied. New Jersey is one of those states, and I will stand up for our right to help save our planet. I applaud Chairwoman Boxer for her leadership on this issue."


The bill introduced today directs the Administrator of the Environmental Protection Agency to grant California's request for the waiver, which will allow California to implement its greenhouse gas emissions standards for motor vehicles. The waiver will also permit other states to adopt California's emissions standards.


Fourteen other states have adopted California's standards, or are in the process of adopting them. Another four are moving toward adopting the California standards. All together, those 19 states represent more than 152,000,000 Americans - a majority of the U.S. population.


[THE EPA ADMINISTRATOR WAS DOING WHAT WAS CALLED FOR. THE EPA CANNOT GRANT A WAIVER FROM A FEDERAL STANDARD THAT DOES NOT YET EXIST. THAT IS PRECISELY WHAT THE EPA WAS TRYING TO DEVELOP - A FEDERAL STANDARD. THE PROBLEM HERE, IS THUS, THAT THE PROPONENTS OF THE BILL DO NOT WISH TO GRANT THE EPA THE OPPORTUNITY TO DEVELOP A FEDERAL STANDARD THAT CAN WITHSTAND LEGAL CHALLENGE FROM WHICH IT COULD THEN GRANT A WAIVER.]

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http://www.greencarcongress.com/2007/12/epa-denies-cali.html


EPA Denies California Vehicle GHG Waiver; State Will Sue to Overturn Decision


Green Car Congress


December 19, 2007


The US Environmental Agency (EPA) today denied the state of California the waiver required to enable the state to regulate tailpipe greenhouse gas emissions from passenger cars and light trucks. Sixteen other states—Arizona, Colorado, Connecticut, Florida, Maine, Maryland, Massachusetts, New Jersey, New Mexico, New York, Oregon, Pennsylvania, Rhode Island, Utah, Vermont and Washington—have adopted or are in the process of adopting the California regulations.


In announcing the rejection of the waiver, EPA Administrator Stephen Johnson said, “The Bush Administration is moving forward with a clear national solution—not a confusing patchwork of state rules—to reduce America’s climate footprint from vehicles. President Bush and Congress have set the bar high, and, when fully implemented, our federal fuel economy standard will achieve significant benefits by applying to all 50 states.”


The EPA is relying upon the new CAFE standard of an average 35 mpg by 2020 to deliver reductions in greenhouse gas emissions from cars and trucks. President Bush signed the CAFE legislation—contained with the larger energy bill—into law today. The California standards call for 205 g CO2/mile for passenger cars (about 43 mpg for a gasoline vehicle) and 332 g/mile for light trucks (about 27 mpg for a gasoline vehicle) by 2016.


The EPA said that California’s current waiver request is distinct from all prior requests, which covered pollutants that predominantly impacted local and regional air quality. The agency asserted that greenhouse gases are fundamentally global in nature, unlike the other air pollutants covered by prior California waiver requests. Since these gases contribute to the challenge of global climate change affecting every state in the union, the EPA argued, according to the criteria in section 209 of the Clean Air Act, it did not find that separate California standards are needed to “meet compelling and extraordinary conditions.”


In reaction, California Governor Arnold Schwarzenegger vowed to appeal the decision and pursue every legal opportunity to obtain the waiver.


While the federal energy bill is a good step toward reducing dependence on foreign oil, the President's approval of it does not constitute grounds for denying our waiver. The energy bill does not reflect a vision, beyond 2020, to address climate change, while California's vehicle greenhouse gas standards are part of a carefully designed, comprehensive program to fight climate change through 2050.


It has been nearly two years since we requested the waiver and, now, sixteen other states are following our lead to reduce our dependence on foreign oil, increase fuel efficiency and help reduce harmful greenhouse gases. A ruling from the US Supreme Court earlier this year made it clear that the US EPA has the authority to limit greenhouse gas emissions from motor vehicles.

It is disappointing that the federal government is standing in our way and ignoring the will of tens of millions of people across the nation. We will continue to fight this battle. California sued to compel the agency to act on our waiver, and now we will sue to overturn today’s decision and allow Californians to protect our environment.

—Gov. Schwarzenegger


[GOVERNOR SCHWARZENEGGER HAS FAILED TO CONSIDER THE VIEWS OF TENS OF MILLIONS OF PEOPLE ACROSS THE NATION THAT DO NOT BELIEVE IN THE GLOBAL WARMING CRISES, LET ALONE, THE RECOMMENDED EUROPEAN REGULATORY CAP & TRADE LEGISLATION SITTING IN CONGRESS OR IN CALIFORNIA. THE CALIFORNIA CAFE STANDARD IS BUT THE TIP OF THE REGULATORY ICEBERG. WHILE HIGHER MPG REQUIREMENTS ARE NECESSARY TO HELP SECURE U.S. ENERGY INDEPENDENCE BASED ON REDUCED ENERGY USE /EFFICIENCY, IT DOES LITTLE TO ADDRESS CO2 EMISSIONS. EUROPEAN-STYLE CLIMATE CHANGE CAP & TRADE REGULATIONS ARE REALLY WHAT THESE DEMOGAGUES ARE AFTER, SINCE THEY WOULD COVER ALL U.S. ECONOMIC SECTORS...]


Under the Federal Clean Air Act, California has the right to set its own tougher-than-federal vehicle emission standards, as long as it obtains a waiver from US EPA. Over the past 30 years the US EPA has granted California more than 40 such waivers, denying none.


The original request for a waiver of federal preemption of California's Motor Vehicle Greenhouse Gas Emissions Standards was made by the California Air Resources Board (ARB) on December 21, 2005. The waiver, allowing California to enact and enforce emissions standards to reduce greenhouse gas emissions from automobiles, was requested after the Air Resources Board developed regulations based on a 2002 California law, AB 1493 by Assemblymember Fran Pavley.


That law required California to establish new standards for motor vehicle greenhouse gas emissions beginning in model year 2009. The ARB-adopted regulations will phase in and ramp up over eight years to cut global warming emissions from new vehicles by nearly 30% by model year 2016.


In letters sent on April 10, 2006 and October 24, 2006 to President Bush, the Governor reiterated the urgency of approving California's request to address global warming. On April 25, 2007, 16 months after the original waiver request, Governor Schwarzenegger sent a letter to Administrator Johnson informing him of California’s intent to sue after 180 days under the Clean Air Act and Administrative Procedure Act, which provides mechanisms for compelling delayed agency action.


California’s request has been supported by recent judicial decisions.

EIA & EPA Both Find S.2191 Climate Change Bill Would Cost $Trillions in Added Expense: How Could US Senators Conscientiously Do This to Americans?

The U.S. Energy Information Administration & the U.S. Environmental Protection Agency Both Find S.2191 Climate Change Bill Would Impose $Trillions in Added Cost of Living Expenses. How Could U.S. Senators Conscientiously Do This to Americans?












http://www.eia.doe.gov/oiaf/servicerpt/s2191/execsummary.html

Energy Market and Economic Impacts of S. 2191, the Lieberman-Warner Climate Security Act of 2007 (Exec. Summ.)


Energy Information Administration


April 29, 2008


[The Energy Information Administration (EIA), created by Congress in 1977, is a statistical agency of the U.S. Department of Energy.]


This report responds to a request from Senators Lieberman and Warner for an analysis of S. 2191, the Lieberman-Warner Climate Security Act of 2007 and a subsequent analysis request from Senators Barasso, Inhofe, and Voinovich. S. 2191 is a complex bill regulating emissions of greenhouse gases (GHG) through market-based mechanisms, energy efficiency programs, and economic incentives.


...Key Findings


...S. 2191 increases energy prices and energy bills for consumers. Relative to the Reference Case, the price of using coal for power generation, including the cost of holding allowances, is between 161 percent and 413 percent higher in 2020 and between 305 percent and 804 percent higher in 2030 in the S. 2191 cases. The price of electricity is between 5 percent and 27 percent higher in 2020 and between 11 percent and 64 percent higher in 2030 in the S. 2191 cases. Under S. 2191, average annual household energy bills, excluding transportation costs, are between $30 and $325 higher in 2020 and $76 to $723 higher in 2030.


...S. 2191 increases the cost of using energy, which reduces real economic output, reduces purchasing power, and lowers aggregate demand for goods and services. The result is that projected real gross domestic product (GDP) generally falls relative to the Reference Case. Adverse economic impacts generally increase over time as higher cost emissions abatement options are required as emissions caps become more stringent while population and economic activity levels continue to grow. Total discounted GDP losses over the 2009 to 2030 time period range from $444 billion (-0.2 percent) to $1,308 billion (-0.6 percent) across the S. 2191 cases (Table ES3). Similarly, the cumulative discounted losses for personal consumption range from $546 billion (-0.2 percent) to $1,425 billion (-0.6 percent). GDP losses in 2030, the last year explicitly modeled in this analysis, range from $27 billion to $163 billion (-0.1 to -0.8 percent) while consumption losses in that year range from $58 billion to $149 billion (-0.4 to -1.1 percent). Economic impacts are largest when it is assumed that key low-emissions technologies including nuclear, fossil with CCS, and various renewables are not developed and deployed in a timeframe consistent with the emissions reduction requirements and international offsets are not available.


...S. 2191 impacts industrial activity, including manufacturing, to greater extent than it affects the overall economy. Industrial shipments in 2030, excluding services, are reduced by $233 billion to $589 billion (-2.9 to -7.4 percent), with the largest impacts occurring in the Limited Alternatives/No International Case.

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http://www.eia.doe.gov/oiaf/servicerpt/s2191/economic.html

Energy Market and Economic Impacts of S. 2191, the Lieberman-Warner Climate Security Act of 2007 (EIA)


Economic Impacts


Implementing the S. 2191 GHG allowance program will affect the economy through two key mechanisms. First, the cost of using energy, particularly fossil fuels and electricity, will be increased by the requirement to lower total emissions and submit allowances for any ongoing emissions. Second, the auctioning of allowances together with the free distribution of allowances to non-emitting sources will generate revenue that will be spent on programs designed to help businesses and consumers reduce their emissions or ameliorate the impacts associated with higher energy prices.5 However, as the share of allowances auctioned and the price of allowances grow over time in the S. 2191 cases, the revenue to the government that could be redistributed also grows, while the economy slows.


...Real GDP and Consumption Impacts


The higher delivered energy prices lower real output for the economy. They reduce energy consumption, but also indirectly reduce real consumer spending for other goods and services due to lower purchasing power. The lower aggregate demand for goods and services results in lower real GDP relative to the Reference Case (Figure 26 and Table 4). Relative to the Reference Case, real GDP in 2030 is $163 (0.8 percent) lower in the Limited Alternatives/No International Case and $27 billion (0.1 percent) lower in the No International Offsets Case. In the S. 2191 Core Case, real GDP is 59 billion (0.3 percent) lower in 2030. Over the entire forecast period, the cumulative present value GDP loss reaches $444 billion in 2000 dollars (0.2 percent) in the S. 2191 Core Case. The Limited Alternatives/No International Case shows the largest real discounted GDP loss between 2009 and 2030, reaching $1.3 trillion (0.6 percent).


While real GDP is a measure of what the economy produces, the composition of GDP may change considerably between the major components: consumption, investment, government, and net exports. Consumer expenditures, one indicator of consumers’ welfare, show larger relative losses compared to GDP. Figure 27 depicts consumption impacts over time and the cumulative discounted percent change in consumption over the 2009 to 2030 period compared to the Reference Case. The cumulative losses of real consumption are between $558 billion (0.4 percent) in the S. 2191 Core Case and $1.4 trillion (0.6 percent) in the Limited Alternatives/No International Case. By 2030, real consumption losses reach $68 billion (0.5 percent) in the S. 2191 Core Case. The Limited Alternatives/No International Case shows the highest consumption loss, reaching $149 billion (1.1 percent) in 2030.


Industrial Impacts


Industrial energy prices increase more than consumer energy prices since 11 percent of the allowance revenue received by industry is aimed at ameliorating energy price impacts for consumers, 9 percent to electricity load-serving entities and 2 percent to natural gas distributors. As a result, industrial impacts show substantial losses. As energy prices increase, the energy-intensive sectors, including food, paper, bulk chemicals, petroleum refining, glass, cement, steel and aluminum, show greater losses compared to the rest of the industrial sectors, reaching 3.6 percent below the Reference Case by 2030 in the S. 2191 Core Case, and 5.0, 5.3, 6.4 and 10.2 percent in the No International Offsets, High Cost, Limited Alternatives, and Limited Alternatives/No International Cases, respectively. Figure 28 highlights manufacturing industries’ impacts across the S. 2191 cases, separately showing the energy-intensive and non-energy-intensive manufacturing industrial sectors.


Figure 29 shows industrial sector (all non-service industries) and employment impacts for the S. 2191 Core, Limited Alternatives, No International Offsets, High Cost, and Limited Alternatives/No International Cases. In the S. 2191 Core Case, industrial output is down by 2.9 percent compared to the Reference Case in 2030 as higher prices and lower demand leads industrial output to fall. Manufacturing employment changes mirror industrial impacts.


Uncertainty


All long-term projections engender considerable uncertainty. It is particularly difficult to foresee how existing technologies might evolve or what new technologies might emerge as market conditions change, particularly when those changes are fairly dramatic. Under S. 2191, this analysis finds energy providers, particularly electricity producers, will increasingly rely on technologies that currently play a relatively small role or have not been built in the United States in many years. Sensitivity analyses suggest that the economic impacts can change significantly under alternative assumptions regarding the cost and availability of new technologies and the availability of offsets.

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http://epa.gov/climatechange/downloads/s2191_EPA_Analysis.pdf

EPA Analysis of the Lieberman-Warner Climate Security Act of 2008 S. 2191 in 110th Congress


March 14, 2008


On November 9, 2007 Senators Lieberman (Ind) and Warner (Rep) requested that EPA estimate the economic impacts of the S. 2191, the “Climate Security Act of 2007” (the “Lieberman-Warner Climate Security Act of 2008”). S. 2191 places declining greenhouse gas (GHG) emission caps upstream on petroleum, natural gas, as well as manufacturers of fluorinated gases (F-gases) and N2O and downstream on coal facilities...The analysis was conducted by EPA’s Office of Atmospheric Programs.


The main conclusions are as follows:

The US economy is robust enough to withstand the high oil prices, the credit crises and other similar hurdles. By 2030, GDP and consumption are projected to increase 97% from 2007 levels in the Reference Scenario. By 2050, the projected increase in GDP and consumption from 2007 levels is 215% (see page 3).


However, the US economy cannot elude the adverse impacts of S. 2191. Under S.2191, GDP is modeled to be between 0.9% ($238 billion) and 3.8% ($983 billion) lower in 2030 and between 2.4% ($1,012 billion) and 6.9% ($2,856 billion) lower in 2050 than in the Reference Scenario. Consumption is modeled to be between 0.9% ($180 billion) and 1.4% ($233 billion) lower in 2030 and between 2.1% ($670 billion) and 3.3% ($843 billion) lower in 2050 than in the Reference Scenario. The average annual growth rate of consumption is ~0.08 percentage points lower than the reference case. In 2030 per household average annual consumption is ~$1,375 lower and gasoline prices increase ~$0 .53 per gallon. In 2050 per household average annual consumption is ~$4,377 lower and gasoline prices increase ~$1.40 per gallon. Electricity prices are projected to increase 44% in 2030 and 26% in 2050 (see page 3).


...Key Results & Insights


...Under S.2191, GDP is modeled to be between 0.9% ($238 billion) and 3.8% ($983 billion) lower in 2030 and between 2.4% ($1,012 billion) and 6.9% ($2,856 billion) lower in 2050 than in the Reference Scenario. Consumption is modeled to be between 0.9% ($180 billion) and 1.4% ($233 billion) lower in 2030 and between 2.1% ($670 billion) and 3.3% ($843 billion) lower in 2050 than in the Reference Scenario.


The average annual growth rate of consumption is ~0.08 percentage points lower than the reference case. In 2030 per household average annual consumption is ~$1 ,375 lower and gasoline prices increase ~$0 .53 per gallon . In 2050 per household average annual consumption is ~$4,377 lower and gasoline prices increase ~$1.40 per gallon.


Electricity prices are projected to increase 44% in 2030 and 26% in 2050, assuming the cost of allowances can partially be passed on to consumers (as is the case in a full auction). If allowances are given directly to power companies, the cost of those allowances would not be passed on to consumers in regulated electricity markets, so electricity price increases would be smaller in much of the country. (p. 3).


...If international credits are not allowed (or are more expensive than U.S. GHG allowances), and domestic offsets are still limited to 15%, then allowance prices increase by 34% compared to the bill as written.


If domestic offsets and international credits are not allowed, and the caps must be met solely through emissions reductions in covered sectors, then allowance price increases by 93% compared to the bill as written.
(p.6).


...Fuel Prices (ADAGE)


...S. 2191 electricity prices are 44% higher than in the Reference Scenario in 2030 and 26% higher in 2050, reflecting a shift in fuel mix from coal to gas in the earlier years, the adoption of carbon capture and storage technology in la ter years, and the in creased prices the consumers of coal and gas face due to th e price of allowances.


...Electricity prices in the S. 2191 case under alternative reference assumptions are 35% higher in 2030 and 28% higher in 2050 than the Alternative Reference Scenario prices.

• With assumptions that limit the growth of nuclear, biomass, or carbon capture and storage technologies, meeting the cap becomes more expensive, resulting in larger reductions in demand and increases in the costs of traditional fossil fuels as generators must purchase additional allowances. If all three technologies are constrained, electricity prices in 2030 are 79% higher and 2050 prices are 98% higher than the reference scenario prices.
(p. 57).

...The cost of the carbon content increases the price of gasoline by 21%, increases the price of oil by 47%, increases the price of natural gas by 57%, increases the price of coal by 360%, and increases the price of coal used with CCS by 36%.
(p. 58 - "Results: Scenario 2 - S. 2191 Fuel Price Adders for 2030 ( ADAGE)").

...[SEE ALSO:] Appendix 4: Additional Information
(pp. 153-164).