ExxonMobil, the world’s largest company by both revenue and market capitalization, has a place on the world stage comparable to a major nation-state (only 23 nations in 2006 had a GDP greater than Exxon’s revenues of $347 billion, which rose 7% in 2007). Only 31 nations exceeded its annual greenhouse gas emissions in 2004 [UN MDG indicators, ExxonMobil CDP response]. If end-use emissions of ExxonMobil’s products are included, its carbon footprint of 1 billion metric tons of CO2 equivalent is exceeded only by five nations.David Sassoon at Solve Climate asked Mario Lopez-Alcala, a senior analyst with Innovest Strategic Value Advisors, to estimate how the Kyoto Protocol impacts the company. Lopez-Alcala made some counter-intuitive discoveries.
Turns out that under Kyoto, Exxon is responsible for abating only 9 million out of the 138 million tons of its carbon footprint—about 6.9% of its absolute exposure. Mario arrived at this figure by compiling a weighted average of the emissions targets affecting all Exxon operations around the world. His estimate for what it costs Exxon to abate those emissions, assuming it had to purchase carbon credits? About $1 billion a year. (He calculated net present value for the 2008-2012 Kyoto compliance period and applied a standard oil industry discount rate to arrive at the figure, based on an expected price of $28 per ton of carbon. He also had to add in to the calculation, abatement costs for reducing emissions to a baseline year.)
$1 billion annually is not a terribly large liability for a $400 billion company.Furthermore:
There’s also another aspect to Exxon’s carbon footprint: the 129 million tons of emissions that it is not required to reduce. It is an enormous carbon asset in a world in which carbon has a price, and it presents a tangible opportunity for enhancing profitability – even beyond $40.6 billion. By reducing those emissions – most simply through reduced flaring, co-generation, heat recuperation, and carbon capture and sequestration – Exxon could reap profits from selling carbon credits it generates. Mario reports that BP is the leader in the sector in taking advantage of these opportunities, which are tangible and positive already.
Sassoon concludes that from an investor (as well as moral) standpoint, ExxonMobil’s storied resistance to the science of climate change is a poor corporate position.
NASA was given over $100 million in taxpayers money to build the Deep Space Climate Observatory (DSCOVR), a spacecraft designed to measure the energy budget of our warming planet from the unique vantage of a million miles away.
Even though it is fully completed over five years ago, DSCOVR is still sitting in a box at the Goddard Space Center – likely for political reasons.
In 2006, Anderson filed a FOIA request with NASA, receiving only letters from scientists to NASA concerned about the cancellation, but no documents about the internal decision-making process.
In 2007, NOAA proposed a joint NASA-NOAA mission with the private launch company Space Services Inc. using the DSCOVR satellite.Anderson now reports on his 2007 FOIA request to NOAA on the fate of DSCOVR:
My request was sent in November. I was told my documents would be emailed on December 11. Then I got call from NOAA General Counsel Hugh Schratwieser before Christmas telling me that it going to take longer than they thought but I should get the document package in early January. Mr. Schratwieser also assured me NOAA takes pride in their compliance with the Freedom of Information Act and that I shouldn’t worry.
I have since sent five unanswered emails to NOAA requesting updates on my request. Government bodies like NOAA have a legal obligation to respond to FOIA requests in 20 working days. It is now over three times that long and counting.
Since I was repeatedly told over the last two months that the package of documents was very close to being assembled, I can only assume that it is now complete but being held up for political reasons.
At yesterday’s Investor Summit on Climate Risk, McKinsey’s economic research arm, the McKinsey Global Institute, released the report The Case for Investing in Energy Productivity (lead authors Jaana Remes and Diana Farrell).
The report finds that global investments on the order of $170 billion annually through 2020 ($38 billion in the US) in energy efficiency (what they call “energy productivity”) would deliver annual returns at a rate of 17 percent. Furthermore, these investments would reduce energy demand at half the cost of building out infrastructure to meet that demand. (For a sense of scale, $170 billion is 1.6 percent of global fixed-capital investment today.)MGI finds some key energy-market failures that block the needed capital outlays:
Fuel subsidies that directly discourage productive energy use; a lack of information available to consumers about the kind of energy productivity choices that are available to them; and agency issues in high-turnover commercial businesses.The report’s top-line recommendations for repairing these failures:
- Set energy efficiency standards for appliances and equipment
- Finance energy efficiency upgrades in new buildings and remodels (see Architecture 2030)
- Raise corporate standards for energy efficiency
- Invest in energy intermediaries (such as energy service companies aka ESCOs)
For more, read the full report.
The Sierra Club, until today, has stayed on the sidelines during the contretemps over Lieberman-Warner (S. 2191) fueled by a campaign by Friends of the Earth asking Sen. Barbara Boxer (D-Calif.) to “fix or ditch” the bill. The 1.3 million member organization has now made its position clear.
In an essay posted to Grist’s Gristmill blog this afternoon, Sierra Club executive director Carl Pope delineates clear principles for endorsing climate legislation, all of which Lieberman-Warner currently fails to satisfy:
- Reductions in total emissions on the order of 80 percent by 2050 and 20 percent by 2020
- All allowances should be auctioned or otherwise used to benefit the public
- Revenue should fund “highest-value solutions”, not coal or nuclear energy
- Ensure a just transition for workers, protect vulnerable groups, and help induce world action
He compares the current political situation to the one that led to the Clean Air Act in 1971, saying that “Maine Sen. Edmund Muskie, fearing that industry would block him on other points, acceded” to the industry insistence to grandfather old plants, and that environmentalists like the 25-year-old Pope went along.He then responds to Sen. Barbara Boxer and advocates of pushing a climate bill this year hell or high water:
Fast-forward to present day: the carbon industries are lobbying to get a deal done this year that would give away carbon permits free of charge to existing polluters – bribing the sluggish, and slowing down innovation. And politicians are telling us that while it would be better to auction these permits and make polluters pay for putting carbon dioxide into our atmosphere, creating that market unfortunately gets in the way of the politics. We are being urged to compromise – to put a system in place quickly, even if it is the wrong system.
On February 4, 2008, Transportation Secretary Mary Peters released the 2009 fiscal year (FY) budget request for the U.S. Department of Transportation (DOT) to fund construction, maintenance, and operation activities for the nation’s roadways, railways, and air transportation. The proposed $68.2 billion total represents a $2.13 billion decrease from the FY 2008 appropriations bill enacted in December 2007. Moreover, proposed budget rescission measures totaling $3.89 billion would further reduce the budgetary resources available to DOT in FY 2009 to $64.31 billion.
The Administration is again proposing dramatic cuts in federal support for Amtrak. Congress appropriated $1.3 billion for Amtrak in FY 2008 with $850 million going to capital and debt service and $475 million to operating subsidies. The Administration’s budget proposes a total of $800 million, a cut of $525 million or 40 percent. The Administration proposes $525 million for capital and debt service grants and $275 million for “efficiency incentive grants” which would replace direct operating subsidies and give the Secretary of Transportation discretion in how the funds are used.
Other highlights in the Department of Transportation (DOT) budget include:
- Congestion Mitigation and Air Quality Improvement Program (CMAQ) – $1.8 billion. CMAQ supports transportation projects that assist in meeting and maintaining national ambient air quality standards.
- Clean Fuels Grant Program – $51 million to support transit operators in transitioning to cleaner and more efficient buses and fuels, an increase of $2 million from $49 million appropriated in FY 2008.
- Transit Planning – $113.5 million to support the activities of regional planning agencies and states to plan for transit investments, an increase of $6.5 million from $107 million appropriated in FY 2008.
The Office of Special Counsel has concluded its investigation into EPA administrator Stephen Johnson’s March 9, 2006 appearance at a fundraiser for Rick O’Donnell, a Republican candidate for Colorado’s 7th District. In its press release, the OSC declared that Johnson did not violate the Hatch Act.
The complaint, filed by Colorado Democratic Party chair Pat Waak, noted that an e-mail by former Colorado health department Doug Benevento had the subject line, “Fundraiser with Administrator of EPA Stephen L. Johnson for Rick O’Donnell,” with an attachment entitled “Fundraiser with Administrator of EPA.”
The act forbids fundraiser invitations that include the federal employee’s official title.However, the OSC found:
that while Mr. Johnson’s official title was used in an e-mail invitation for the fundraiser, the invitation was sent by an organizer of the event, who was not covered by the Hatch Act. Moreover, as the individual did not consult, or receive approval from the EPA or Mr. Johnson, he was not responsible for the use of his official title in the e-mail used to distribute the invitation.
OSC also found that the EPA staff, in approving Mr. Johnson’s participation in the fundraiser, had not reviewed the list of the attendees, nor informed him of who would be attending the fundraiser, or where they were employed. Therefore, OSC found no evidence that Mr. Johnson had knowingly solicited or discouraged the political activity of persons with business before the EPA.
While Mr. Johnson did not violate the Hatch Act, OSC found deficiencies in EPA staff review processes, and recommended that EPA staff be aware of all parties and their roles in political events, including the attendees, and consider this information when advising on participation. Also, OSC advised EPA staff to review the invitation, along with its cover letter or e-mail, to ensure it complies with the Hatch Act.
Following the second one-vote defeat of the renewable tax package in the Senate last week, House leadership let slip they planned to re-introduce the oil-for-renewables legislation some time this week, for passage before the President’s Day recess.Today Katherine Ling reports in E&E News that timeline is now in doubt:
The death of Rep. Tom Lantos (D-Calif.) and last-minute negotiations may delay House plans to take up a renewable energy tax incentive package later this week. Lantos died yesterday morning due to esophagus cancer complications. . .
The bill was expected to be introduced this morning, according to Matthew Beck, a spokesman for House Ways and Means Committee Chairman Charlie Rangel (D-N.Y.). Beck said the committee was writing the bill but had not completed it yet as they were waiting for decisions from the leadership.
Ed. —I would like to welcome the participation of the Environmental and Energy Study Institute on Hill Heat. EESI was founded in 1984 by a bipartisan group of members of Congress concerned about energy and environmental issues. Their initial series of guest posts will be drawn from their briefings on the president’s proposed FY 2009 budget.
The President’s FY 2009 Environmental Protection Agency (EPA) budget request remains relatively flat compared to the FY 2008 request and is down slightly from FY 2008 appropriations. The FY 2009 budget request is $7.14 billion, which is $56.9 million (0.80%) less than the FY 2008 budget request and $330 million (4.4%) less than FY 2008 appropriations.
The President’s FY 2009 budget request for Clean Air and Global Climate Change (EPA Goal 1) is $939 million. This is $33 million (3.4%) less than the FY 2008 appropriations.
Looking at the EPA budget by goals, the Reduced Greenhouse Gas Intensity program within Goal 1 has a FY 2009 budget request of $121 million, which is $9.0 million (6.9%) less than the FY 2008 appropriations of $130 million and $1.7 million (1.4%) less than the FY 2008 budget request of $123 million.
Looking at the EPA budget by program and project, the FY 2009 budget request for Climate Protection programs includes a Science and Technology component, requested at $11.4 million, and an Environmental Program and Management component, requested at $87.0 million. Taken together, these were cut $10.3 million (9.5%) from FY 08 appropriations. The Climate Protection Programs include Energy Star, SmartWay Transport, the Methane to Markets Partnership and Asia-Pacific Partnership. There were a number of cuts, as well as a few increases to the programs, as illustrated below:
Climate Protection Programs
- $10.3 million cut overall (9.5% cut from FY 08 appropriations)
- Zeroing out the Greenhouse Gas Reporting Registry (100% cut from $3.4 million in FY 08)
- $6.9 million cut in Climate Science and Technology program (38% cut from FY 08 appropriations)
- $4.0 million cut in Energy STAR (8.3% cut from FY 08 appropriations)
- $177,000 increase in Methane to Markets (4.1% increase from FY 08 appropriations)
- $5.0 million increase in Asian Pacific Partnership (no previous FY 08 appropriation amount)
Clean Air Rules
Clean Air Rules are a major component of EPA’s Clean Air and Global Climate Change Goal, and include the Clean Air Interstate Rule, the Clean Air Mercury Rule and the Clean Air Nonroad Diesel Rule. These rules work towards the improvement of the United State’s air quality. Additionally, reductions on particulate matter from diesel engines will continue to be addressed through the Diesel Emissions Reduction Grants program of the Energy Policy Act of 2005 (P.L. 109-58), which authorizes $200 million annually (2007-2011). However, the President requests just $49.2 million for the FY 09 EPA Clean Diesel grant, 25% of the authorized amount.
A table reviewing changes in the Goal I and overall EPA budget is below the jump.
General Motors Corp. CEO Rick Wagoner urged a group of auto dealers Saturday to lobby against individual states trying to set their own limits on greenhouse gas emissions.GM is the official vehicle provider for the Democratic National Convention, a decision highlighted as part of the DNC’s “green” mission:
Wagoner, speaking to the National Automobile Dealers Association convention in San Francisco, said several states want to go beyond requirements passed by Congress.
If that happens and automakers must focus on state regulations, they won’t be able to focus as much on alternative fuel vehicles to reduce oil consumption and pollution, he said.
“We’re not going to be able to accomplish everything that we otherwise could,” Wagoner said. . .
“We need to work together to educate policymakers at the state and local levels on the importance of tough but national standards,” Wagoner told the dealers group.
He also said dealers and automakers should push for infrastructure to handle new technologies including hydrogen and ethanol fueling stations and charging stations for electric vehicles.
“GM’s leadership in this area will play a critical role in our event – helping us make this the ‘greenest’ political convention our country has ever seen, while providing our guests with yet another convenient option for getting around Denver.”– Leah Daughtry, DNC CEO
Once we talked to them about how we really wanted to push the environmental piece, they were 100 percent on board.– Cameron Moody, the DNCC’s director of operations
This will be a great showcase to change perceptions about GM and to show we are taking leadership.– GM spokesman Greg Martin
Escalating the fight over the decision, Rep. Henry A. Waxman (D-Beverly Hills), chairman of the House Oversight and Government Reform Committee, directed the EPA to provide uncensored copies of its staff recommendation to agency Administrator Stephen L. Johnson before he rejected California’s request to enact tailpipe emission standards stricter than the federal government’s. The EPA was told to respond by noon Tuesday.
“The committee is simply trying to understand if the decision to reject California’s plan was made on the merits, so I’m especially disappointed that EPA is refusing to provide the relevant documents voluntarily,” Waxman said. “But we will to try to get to the bottom of this.”
The EPA has also turned over some documents, but they were heavily redacted, so much so that some pages were largely blank. The agency has resisted turning over nonredacted documents to Congress, contending that they are protected under attorney-client privilege. California and more than a dozen other states that want to enact similar laws have sued to overturn Johnson’s decision.
The agency has also argued that releasing the documents could have a “chilling effect” on candid discussions within the EPA. Vice President Dick Cheney also cited the need to keep internal deliberations private in fighting congressional efforts to force him to disclose details of private meetings he held as the White House drafted its energy policy, an initiative sparked in part by another California issue – the 2000-01 electricity crisis.
Waxman’s deadline isn’t the only one EPA must meet this week. Senator Barbara Boxer (D-CA) has given it until Friday to turn over documents related to potential White House involvement, and she has now spearheaded a call for the Government Accountability Office to look into factors influencing the waiver decision.
Johnson’s spokesman stood by the decision and said he wouldn’t be changing his mind anytime soon, but that hardly seems to be the California delegation’s point here. They’re building a careful case for congressional intervention via Senator Boxer’s legislative remedy overturning the decision, and both the slow pace of legal proceedings (which California is trying to hasten)and EPA’s foot-dragging play right into their hands.