Why Do Environmentalists Continue to Block Montana's Exploitation of Vast Inexpensive Coal Reserves That Could Be Made Greener With New Technologies?

http://www.boston.com/business/articles/2008/06/03/with_vast_reserves_montana_eyes_coal_expansion/

With vast reserves, Montana eyes coal expansion


By Adam Tanner


Reuters


June 3, 2008


ABSALOKA MINE, Montana (Reuters) - Underneath Montana lies an estimated $1.5 trillion of coal, but with uncertainty about future environmental rules, investors are wary about opening new mines in the rugged Western U.S. state.


Many say a big boost to Montana coal production can only follow November's national election, when a new president could lead the way in clarifying environmental laws and encouraging cleaner coal technology. Montana ends the long U.S. state-by-state presidential primary process on Tuesday.


"Nothing is going to happen until we have a carbon law, that's the bottom line," Montana Gov. Brian Schweitzer told Reuters. "It needs a new president."


"But what's happening right now is the partnerships are being formed, the capital is being raised, the coal is being acquired, so everybody is ready to move as soon as we have a carbon law."


The state produced 43.4 million tons of coal in 2007, up 3.7 percent on the year, the biggest growth rate of any state. That output is just a tenth of that in neighboring Wyoming, where coal is generally easier to extract and transport.


Yet Montana, which borders Canada, sits on America's greatest coal reserves: 120 billion tons, worth about $1.5 trillion at current prices, according to Jay Gunderson, a research geologist at the Montana Bureau of Mines and Geology.


"Coal demand is up all over the world," said John O'Laughlin, Westmoreland Coal Company's vice president, coal operations. "With the price for a barrel of oil, there's a lot of interest in Montana coal. But we've got to figure out a way to sequester the CO2. That's what is holding us back."


The company's 34-year-old Absaloka mine in southeast Montana reached a record 7.35 million tons output last year. In 2009, it plans to expand into adjacent Crow Indian reservation land for the first time.


All the presidential candidates back an expansion of some form of coal using more environmentally friendly technology.


"We're sitting on the world's largest supply of energy in our coal resources," presumed Republican nominee Sen. John McCain said recently. "That has to be one of the fundamental components of energy independence."


Among the Democrats, Sen. Barack Obama has said he would increase resources for commercialization and development of low-emission coal plants, and Sen. Hillary Clinton has called on industry to implement clean coal technology.


"It has been kind of refreshing to hear Hillary and Obama talk about clean coal," Westmoreland's O'Laughlin said. "There is at least a glimmer of acceptance."


INTEREST BUT CAUTION


Montana has not opened a new coal mine in decades.


"Companies are reluctant to invest billions of dollars in infrastructure not knowing what the government is going to do about CO2," said Gunderson at the Bureau of Mines and Geology.


At Absaloka, a single machine -- a dragline excavator that scoops out slabs of rolling countryside to get near the coal -- costs $120 million. Elsewhere, workers dynamite sections of earth and expensive trucks with wheels taller than people carry away coal to be crushed in a vast facility before transport.


Great Northern Properties is the largest private holder of U.S. coal reserves with 20 billion tons, mostly in Montana and North Dakota. Chuck Kerr, president of the Houston-based company, said the nation will eventually tap Montana's coal.


"It's not a matter of if, it's a matter of when," he said in an interview. "The silent majority back coal development because it's a very cheap source of fuel."


Gov. Schweitzer has long championed Fischer-Tropsch technology to convert coal into liquid fuels that can be burned in a greener way than traditional coal, but no one has yet invested the many billions needed for such a plant.


"It is incredibly expensive to deploy," Kerr said.


But there are signs of other new projects.


John DeMichiei, president and CEO of Bull Mountain Coal Mining Inc, expects to get private financing by July 15 for what he said could be the largest underground coal mine in the world, located 35 miles north of Billings, Montana.


"It takes extreme capital investment," he said. "With these sales prices starting to at least support this type of capital investment, I think you will see more investment in Montana in terms of coal."


DeMichiei hopes to begin large-scale production at Bull Mountain by September 2009, with production of 14 million tons a year. The mine, with 430 million tons in reserve, now produces just 40,000 tons a month, he said in an interview.


The company's main investor is Airlie Group of Greenwich, Connecticut. "We are in discussions with a number of parties to get the mine fully financed and build a railroad and get it to be one of the largest long wall mines in the United States, if not the largest," Airlie Managing Director Andy Dwyer said.


But he added: Wyoming's "Powder River Basin has established rail lines and transportation hubs and the ability to substantially expand. So if there isn't going to be any substantial increase in demand then quite frankly the Powder River Basin can meet a good deal of that demand."


Schweitzer said despite its greater reserves and plans for expansion, Montana may never surpass Wyoming in production. "The world of hydrocarbons will be over and we'll still have 90 percent of our coal in the ground," he predicted.


"Wind and solar and hydrogen -- they'll be the energy sources of the future. Forty, 50 years from now hydrocarbons won't be an energy source of any large quality."
(Editing by Braden Reddall)

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.

Ensuring U.S. Energy Security, NOT Climate Change Chastity Is Critical, Given the Worsening Impact Higher Energy Costs Are Having On the Economy

http://www.nytimes.com/2008/06/08/us/08oil.html?hp=&adxnnl=1&adxnnlx=1212945335-9fj4kod5eZsdcFZRafXfUA

Oil Prices Raise the Cost of Making a Range of Goods


By LOUIS UCHITELLE


June 8, 2008


Surging oil prices are beginning to cut into the profits of a wide range of American businesses, pushing many to raise prices and maneuver aggressively to offset the rising cost of merchandise made from petroleum.


Airlines, package shippers and car owners are no longer the only ones being squeezed by the ever-mounting price of oil, which shot up almost $11 a barrel on Friday alone, to $138.54, a record.


Companies that make hard goods using raw materials derived from oil, like tires, toiletries, plastic packaging and computer screens, are watching their costs skyrocket, and they find themselves forced into unpleasant choices: Should they raise prices, shift to less costly procedures, cut workers, or all three?


The Goodyear Tire and Rubber Company is trying to adapt. Its raw material of choice now is natural rubber rather than synthetic rubber, made from oil. To sustain profits, it is making more high-end tires for consumers willing to pay upwards of $100 to replace each tire on their cars.


These steps have not been enough, however, particularly now that the cost of natural rubber is also rising sharply, along with that of many other commodities. So Goodyear has raised the prices of its tires by 15 percent in just four months.


“Our strategy is to raise prices and improve the mix to offset the cost of raw materials,” said Keith Price, a Goodyear spokesman. “No one has predicted how long we can continue to do that.”
The sense that many companies may be hitting a wall is palpable. Corporate profits peaked last spring and have shrunk since then, Moody’s Economy.com reports, drawing on Commerce Department data.


The housing crisis and the weakening economy are big reasons, but oil prices are adding greatly to the pressure on profits as retailers fail to pass along higher prices to consumers. That helps to explain why expensive oil has not yet pushed up the inflation rate.


So far this year, the nation’s employers have been cutting jobs at an accelerating pace, particularly last month, when the unemployment rate jumped to 5.5 percent from 5 percent. But with the vise on corporate profits tightening and the price of oil continuing to climb, more dire action, including job cuts and higher prices, may be in store, economists say, although there is still room to avoid such steps.


“Companies came into this period with extraordinarily high profit margins,” said Edward McKelvey, chief domestic economist at Goldman Sachs, “and some of the surge in raw material costs will be absorbed by lowering those profits.”


Still, the prevailing attitude that the economy could just keep absorbing higher oil prices is being tested — for the first time in nearly 30 years. Adjusted for inflation, a barrel of crude is now more expensive than it was in 1980, the previous peak.


“The conventional wisdom a couple of years ago was that oil did not have that much leverage over the economy,” said Daniel Yergin, chairman of Cambridge Energy Research Associates. “But now it plainly does. People are suddenly paying much more attention to their energy costs and trying to figure out how to manage them.”


Goodyear has kept its head above water in part by passing along some of the higher prices to dealers. The dealers, however, have not been able to pass along all of those increases to consumers and are absorbing the difference in lower profits.


Since last spring, the average profits of the nation’s corporations — from behemoths like Goodyear to small neighborhood retailers — have declined at an annual rate of nearly 6 percent, government data show.


Even companies that have been performing well in the economic downturn are sounding notes of caution. Take Costco, the discount retail chain, which offers a wide array of consumer goods, food, wine, furniture, appliances, beauty aids and much more.


Costco’s profit was up in the first quarter, but James D. Sinegal, the chief executive, says he is “starting to be confronted with unprecedented price increases” for the merchandise that Costco buys to stock its stores. His first response has been to buy in extra large quantities so that he has stock on hand to carry him through subsequent price increases.
“We just made a big purchase of Tumi luggage,” Mr. Sinegal said.


Procter & Gamble finds itself in a similar predicament. For its fiscal year beginning next month, it expects to spend an additional $2 billion on oil-based raw materials and commodities. That is double last year’s increase, and it is carved from total revenue of just under $80 billion.


Price increases have helped to offset this cost. They have averaged nearly 5 percent for paper towels, bath tissues and diapers, all made with chemicals derived from oil, said Paul Fox, a company spokesman.


Natural oils have been substituted for ingredients made from petroleum; for example, palm oil now goes into a variety of laundry soaps. But like rubber, the cost of palm oil and other natural commodities is rising.


Trying to hold down raw material costs, Procter & Gamble has resorted to “compacting” a few laundry products, Mr. Fox said, so that the same amount of detergent fits into smaller and less costly containers made of plastic, which is derived from oil.


Still, the company’s operating profit edged down to 20.1 percent of revenue in the first quarter, from 21.9 percent in each of the two previous quarters. “That 20.1 percent was down, but it was an improvement on the advance guidance we had given for that quarter,” Mr. Fox said.


No business in America produces more of the oil-based ingredients that go into the nation’s products than the Dow Chemical Company, based in Midland, Mich. From Dow’s petrochemical operations come the basic ingredients of a wide variety of plastic bottles and packaging, including numerous containers once made of glass or tin.


Indeed, paint, computer and television screens, mobile phones, light bulbs, cushions, paper, mattresses, car seats, carpets, steering wheels and polyesters are all made with ingredients that Dow and other chemical companies refine from oil and natural gas.


Dow normally raises prices piecemeal. Last month, though, the surge in the cost of oil and natural gas, the company’s principal raw materials, produced a rare across-the-board price increase of as much as 20 percent.


“We have taken out head count, automated, been very diligent on cost control,” said Andrew Liveris, Dow’s chairman and chief executive, “but these surges in energy prices are just one surge too many.”


Dow’s sweeping price increases will probably have a domino effect, resulting in higher prices or, more likely, shrinking profits, analysts say. Constrained by the weak economy and fewer wage earners among their customers, the nation’s retailers have so far not been able to pass on to consumers much of the rising cost of products that depend on oil. The Consumer Price Index, minus food and energy, is barely rising.


“One of the surprises,” said Patrick Jackman, a senior economist in the consumer price division of the Bureau of Labor Statistics, “is that the oil price surges of the 1970s passed through fairly quickly into consumer prices, and this time that is not happening.”

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.

Political CO2 Emissions Threat in US Capitol Extinguished At Least For Now, as Disingenuous Climate Change Bill is Withdrawn From Senate Debate

http://www.foxnews.com/story/0,2933,363642,00.html


Climate Change Bill Heads for Vote, But GOP Opposition Could Prevail


June 06, 2008


Associated Press


Senate Republicans on Friday blocked a global warming bill that would have required major reductions in greenhouse gases, pushing debate over the world's biggest environmental concern to next year for a new Congress and president.


Democratic leaders fell a dozen votes short of getting the 60 needed to end a Republican filibuster on the measure and bring the bill up for a vote, prompting Majority Leader Harry Reid to pull the legislation from consideration.


The Senate debate focused on bitter disagreement over the expected economic costs of putting a price on carbon dioxide, the leading greenhouse gas that comes from burning fossil fuels.


Opponents said it would lead to higher energy costs.


The 48-36 vote fell short of a majority, but Democrats produced letters from six senators — including both presidential candidates Barack Obama and John McCain — saying they would have voted for the measure had they been there.




"It's just the beginning for us," proclaimed Sen. Barbara Boxer, D-Calif., a chief sponsor of the bill, noting that 54 senators had expressed support of the legislation, although that's still short of what would be needed to overcome concerted GOP opposition.


"It's clear a majority of Congress wants to act," Boxer said at a news conference.


She and other Democrats said this now lays the groundwork for action on climate change next year with a new Congress and a new president that will be more hospitable to mandatory greenhouse gas reductions.


Both Obama and McCain have called for capping carbon dioxide and other emissions linked to climate change. President Bush has opposed such measures and said he would have vetoed the Senate bill if he had received it.


The bill would have capped carbon dioxide coming from power plants, refineries and factories, with a target of cutting greenhouse gas emissions by 71 percent by mid-century.


"It's a huge tax increase," argued Republican Senate leader Mitch McConnell of Kentucky, a prominent coal-producing state. He maintained that the proposed system of allowing widespread trading of carbon emissions allowances would produce "the largest restructuring of the American economy since the New Deal."



Supporters of the bill accused Republicans of muddying the water with misinformation.


"There is no tax increase," Sen. Barbara Boxer, D-Calif., one of the bill's chief sponsors said. She said the emissions trading system would provide tax relief to help people pay energy prices. And supporters disputed that it would substantially increase gasoline prices.


[THIS IS A BOLD-FACED LIE BY A U.S. SENATOR WHO IS SWORN TO UPHOLD AND PROTECT THE U.S. CONSTITUTION.]


Four Democrats joined most Republicans in essentially killing the bill.



Obama and McCain, as well as Sen. Hillary Rodham Clinton, D-N.Y., and Sen. Edward Kennedy, D-Mass., who is recovering from cancer surgery, were absent, although they each sent a letter supporting the bill.

-----------------------------------------------------------------------------------------------

http://www.nytimes.com/2008/06/07/washington/07climate.html?ref=environment

After Verbal Fire, Senate Effectively Kills Climate Change Bill


By David M. HERSZENHORN


New York Times


June 7, 2008


WASHINGTON — Before the anticlimactic demise on Friday of legislation to combat global warming, the Senate majority leader, Harry Reid, Democrat of Nevada, called climate change “the most important issue facing the world today.” Senator George V. Voinovich, Republican of Ohio, a critic of the bill, nonetheless called it “the most significant piece of legislation to ever come out of the Environment and Public Works Committee.”


Senator Barbara Boxer, Democrat of California, said the effort to limit heat-trapping gases was “one of the greatest challenges of our generation.” Senator Barack Obama of Illinois, the presumptive Democratic presidential nominee, said in a statement, “The future of our planet is at stake.”


[DISCERNING READERS WILL NOTE THAT THIS IS 'AL GORE LANGUAGE'. AFTER ALL, AL GORE IS ADVISING BARACK OBAMA'S PRESIDENTIAL CAMPAIGN...].


And even Senator James M. Inhofe, Republican of Oklahoma, the leading opponent of the legislation, called it “probably the largest bill ever considered by the Senate in its impact on the economy and our way of life.”


And so it was, with a chorus of Senate voices having proclaimed the urgency and importance of the issue that the Great Climate Change Debate of 2008 ended on Friday morning, after three and a half days, with a procedural vote that effectively shelved the bill until next year. A motion by Democrats to end debate and move to a final vote, requiring 60 votes to succeed, fell far short, with 48 senators in favor and 36 against.


The bill would cap the production of heat-trapping gases and force polluters to buy permits to emit carbon dioxide. Critics, including many Republican senators, said it would raise energy prices, including the cost of oil, at a time when Americans are struggling with record gasoline prices.


But there were also critics at the other end of the political spectrum who said the bill’s limits on carbon emissions were not strict enough. They said the legislation would allow some industries to prosper while forcing average Americans to pay higher energy prices.





The result left lawmakers pointing fingers at one another. Democrats said Republicans had obstructed their efforts to address a most crucial issue, while Republicans said the Democrats were never serious about passing the bill, as evidenced by their unwillingness to allow a serious and lengthy debate over amendments.


Environmental groups, meanwhile, were left struggling to read the tea leaves of yet another procedural step by the Senate, which has been called the world’s greatest deliberative body but can also be its most mercurial and maddening.



In a speech on the Senate floor on Thursday, the Republican leader, Mitch McConnell of Kentucky, mocked the Democrats as trumpeting the magnitude of the climate change but then seeking to cut off debate and move swiftly to a final vote.



“What are they afraid of?” Mr. McConnell asked. “Why don’t they want to consider amendments to a bill addressing what they call ‘the most important issue facing the world today?’ If it is the most important issue facing the world today, it certainly deserves a lot longer debate than a few days.”



[THIS IS AN EXCELLENT QUESTION. WHAT ARE THEY AFRAID OF?? TELLING THE TRUTH??? WHY DO THEY SEEK TO DENY AMERICANS THEIR CONSTITUTIONAL DUE PROCESS RIGHT TO KNOW??]


Dana Perino, the White House press secretary, echoed Mr. McConnell’s remarks at her daily briefing.


The Democrats insisted that comments by Mr. McConnell and other Republicans were disingenuous because Republicans never intended to allow an open and honest debate, never intended to allow the bill to come to a final vote, never intended to support it regardless of what amendments were made, and had no intention of pressuring President Bush, who had made clear that he would not sign the bill.


“They do not want to address the most important issue of the day, so they stalled,” Mr. Reid said, noting that Republicans insisted on having the entire nearly 500-page bill read aloud on Wednesday. “They are doing everything they can to maintain the status quo.”



Some lawmakers and experts on the national debate on climate said there was merit in bringing the bill to the Senate floor for what amounted to a trial run, drawing out supporters and opponents and their particular concerns.



“We have a road map as to where our colleagues are,” said Mrs. Boxer, who was a main sponsor of the bill with Senator John W. Warner, Republican of Virginia, and Senator Joseph I. Lieberman, independent of Connecticut. “We will give the road map to the next president so he knows where our colleagues are and where are the consensus areas and where are the difficult areas.”


But even after the vote, it was hard to discern where many lawmakers stood, with 10 Democrats among the 48 senators who voted to close debate saying they would have opposed the bill had it come to a final vote.

-------------------------------------------------------------------------------------------------

http://www.dallasnews.com/sharedcontent/dws/dn/opinion/editorials/stories/DN-carbon_08edi.ART.State.Edition1.460958e.html

Climate bill meets disappointing end

Editorial


Dallas Morning News


June 8, 2008


For a moment, the climate appeared to be changing in the U.S. Senate.


Last week's decision to bring landmark global warming legislation to the Senate floor signified the start of a long overdue discussion about the most important environmental and energy issues facing this country. And while the bill faced long odds from the get-go – and a likely presidential veto – this was an opening to begin tackling tough questions and to establish a baseline for future dialogue.


Unfortunately, opponents weren't satisfied with simply voting the bill down. They viewed this as an opportunity to avenge past political defeats and impede debate.


Minority Leader Mitch McConnell of Kentucky forced Democrats to have all 492 pages of the legislation read aloud – a nearly nine-hour ordeal that he said was prompted by residual anger over judicial nominations. On Friday, filibuster was the Republicans' weapon of choice, as they effectively killed the bill before a scheduled vote.


These obstructionist tactics were unnecessary political ploys that only served to further delay urgently needed action on climate change. Much to our disappointment, Texas Sen. Kay Bailey Hutchison joined Republican colleagues in thwarting the vote.


For both parties, this was a missed opportunity.


Reducing greenhouse gas emissions and putting a price on carbon will be a difficult and complex process. Whether Congress chooses to begin what inevitably will be a long negotiation now or next year, it's not going to get any easier.


Scientific evidence, though, makes clear that lawmakers can't afford to dally with nine-hour dramatic readings while the planet warms. Opponents of the bill passed up the chance for a serious debate that should include a full airing of their concerns about the proposal's economic impact.


[SCIENTIFIC EVIDENCE TO DATE ONLY DEMONSTRATES A CORRELATIVE, NOT A CAUSAL RELATIONSHIP BETWEEN GLOBAL WARMING AND ECONOMIC ACTIVITY - POLITICIANS ARE EXPLOITING PUBLIC IGNORANCE OF THIS KEY DISTINCTION.]


Sadly, just advancing the bill to the Senate floor was progress. But moral victories will not move the country closer to shedding its distinction as a global warming laggard.


[IT IS SOMETIMES BETTER TO DO NOTHING THAN TO DO HARM. IN THIS CASE, THE PROPOSED BOXER-SUPPORTED CLIMATE CHANGE CAP & TRADE LEGISLATION WOULD HAVE SEVERELY HARMED THE U.S. ECONOMY AND ADVERSELY AFFECTED AMERICANS' STANDARD OF LIVING. THE DEFEAT OF THIS BILL IS NOT ONLY A MORAL VICTORY, IT IS ALSO A VICTORY OF: 1) COMMON SENSE OVER 'FEAR-MONGERING & POLITICAL OPPORTUNISM; and 2) INDIVIDUALISM OVER COMMUNALISM.]

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).