Hill Heat

Ian Bowles, Mass. Secretary of Energy & Environmental Affairs:

1. It is tempting to think that, if you make generators pay for the emissions they produce, it will drive electricity prices up, but if you give allowances away for free, it won’t. But it’s not true. The price impact is the same either way. . . As power generators determine the price at which it becomes economic for their plants to produce power, they have to decide whether to expend allowances in order to generate electricity, save those allowances for a time when electricity prices are higher, or sell allowances to other power producers who need to meet their compliance obligations. In any of these three scenarios, the market price of allowances becomes a component of the price of electricity.

2. While it is important that a federal program also give substantial new financial incentives to develop new clean energy technologies, energy efficiency gives the greatest near term return for the ratepayers.

Peter Zapfel, European Commission Directorate General for Environment:

3. Because the power generation sector is not exposed to competition from outside the EU, it can fully pass on the value of carbon allowances. Full auctioning should therefore be the rule from 2013 onwards for the power sector.

4. In order to underpin the energy and climate package of 23 January 2008 the Commission undertook a comprehensive (regulatory) impact assessment including an economic analysis of the effects of auctioning compared to free allocation of allowances. This analysis concluded that the full auctioning of allowances has no negative macroeconomic impact and is in fact preferable to other distribution methods in terms of efficiency of the emissions trading system and the elimination of any undesirable distributional effects of free allocation.

Dallas Burtraw, Senior Fellow, Resources for the Future

5. Unfortunately, free allocation to load serving entities comes with an important efficiency cost. When electricity customers do not see the increase in retail electricity prices they do not have the incentive to reduce electricity consumption. In the example we modeled it leads to a 15 percent increase in allowance price under the cap and trade program and requires greater emission reductions for the rest of the economy.. . Essentially, the free allocation to electricity customers is a subsidy to electricity consumption that is not received by users of natural gas or transportation fuels or by industry or commerce, except to the degree that they consume electricity.

6. Like any new regulation, climate policy imposes costs on households and firms and that cost acts like a virtual tax, reducing the real wage of workers . . . one of the most important findings in environmental economics and public finance in the last fifteen years is the recognition that the use of revenue raised through an auction (or an emissions tax), if dedicated to reducing other pre-existing taxes, can reduce this cost substantially. This so-called revenue recycling would have truly dramatic efficiency advantages compared to free distribution.

7. A key finding is that compensation has a significant opportunity cost, especially if the goal is to achieve full compensation. If the free allocation to achieve compensation is implemented at the federal level, we find the incremental cost of compensating for the last increment of harm in the electricity sector would cost ten times that amount in allowance value. Implemented at the regional/state level, that ratio falls, requiring the use of allowance value equal to about 4.5 times the harm.

Robert Greenstein, Executive Director of Center on Budget and Policy Priorities:

8. We estimate that a program designed according to the principles laid out later in this testimony, which would fully offset the impact on the poorest 20 percent of people and also provide some relief to many hard-pressed working families in the next 20 percent, could be fully funded with approximately 14 percent of the resources that would be generated by auctioning off all the allowances in a cap-and-trade system.

John Podesta, President and Chief Executive Officer, Center for American Progress, said that the federal government should pay for CCS investment:

Any cap and trade bill should also include an emission performance standard for all new coal-fired facilities equivalent to the best available carbon capture-and-store technology, and the provision of federal funds to help offset additional costs of implementing carbon capture-and-storage technology. Revenues from allowance auctions should pay for these incentives.

E&E Daily:

While most panelists agreed it was not likely that a full bill capping greenhouse gas emissions would pass this session, they said a great deal could be accomplished in laying the groundwork this year.

Tom Kuhn, president and CEO of Edison Electric Institute, predicted there will be a floor vote in the Senate this year on a climate bill. “No matter what happens on those votes, that will set the marker for what we do in the future,” he said, especially if there is White House involvement.

David Parker, president and CEO of the American Gas Association, agreed with Kuhn. Despite a general disagreement the energy industries have with the climate bill sponsored by Sens. Joe Lieberman (I-Conn.) and John Warner (R-Va.), he said, future legislation could be even harder on the industry.

“Warner is retiring this year, and then the question is, ‘Who comes into play?’” Parker said. Potentially, Sens. Barbara Boxer (D-Calif.) and Bernie Sanders (I-Vt.) – who both favor greater emission limits than those in the Lieberman-Warner bill – could lead the next attempt to pass climate change legislation under a Democratic president, he said.

“Who would you rather have writing a bill in the Senate? I might guess it may set a tone for business to fully work with the Senate this year,” he said.

Achieving workable legislation will require educating policymakers and the public a great deal more on energy markets, panelists said.

Parker said he was worried that “the polar bear habitat is going to really drive this [climate change] debate. We all have a big education job to do and I think we need to do it collectively.”

Sanders:

“With that kind of federal funding, sustainable energy will become far more widespread than is currently the case,” Sanders told The Burlington Free Press. A member of the committee, Sanders said the bill would spur “an incredible burst forward” toward greater use of cleaner sources of energy.

The bill also set more stringent emissions standards than an earlier version of the legislation.

“If we can overcome politics as usual, if we utilize the knowledge and technology that is available today, not only can we reverse global warming, but we can create millions of good-paying jobs,” Sanders said.

At the outset of what turned out to be a day-long the committee meeting, Sanders called the bill “an important step forward in the fight against global warming.” He continued:

What the leading scientists of the world are telling us in more and more urgent tones is that global warming is a catastrophic crisis facing our planet and that if we do not act boldly and aggressively our nation and the entire world face a very dire future impacting the lives of billions of people. It will be a future of massive floods, droughts, loss of drinking water and farmland, extreme weather conditions and international conflicts fought over limited natural resources. It will be a future of very significant economic dislocation. That is not my opinion. That is the opinion of the most knowledgeable scientists in this world, many of whom have just won the Nobel Peace Prize for their work on global warming.

What these scientists are now telling us is that the problem is even more severe than they had previously believed and that if we, industrialized nations responsible for most of the emissions, do not cut greenhouse gas emissions by at least 80 percent by the year 2050 there is a 50 percent chance that we will reach a tipping point at which time massive damage will be unavoidable. That is the bad news.

But there is also some very good news. If we can overcome politics as usual, if we utilize the knowledge and technology that is available today, not only can we reverse global warming but we can create millions of good jobs in the process.

In other words, we are not helpless in this conflict. The tools and knowledge are there and, if we summon up the political courage, we can make great strides forward and lead the world in reversing global warming.

What should we be doing?

First, in terms of sustainable energy, there is almost unlimited potential. In that regard I want to thank Senators Boxer, Lieberman and Warner for revising the legislation that came out of the subcommittee and putting into the bill we’re considering today a suggestion that I made which will specifically provide, from the auction process, some $300 billion for sustainable energy – including wind, solar, and geothermal. With effective cooperation between the federal government and the private sector, a very substantial part of the energy needs of this country will, within the next few decades, come from such clear and sustainable technologies – and they will be less expensive than the conventional fuels we use today.

Second, the potential for cutting carbon emissions through strong energy efficiency efforts is extraordinary. If we raise CAFE standards for our vehicles and create a first-class rail and public transportation system, if we retrofit our homes, offices and factories and create strong energy efficient building standards for new construction, we can save massive amounts of energy and substantially cut greenhouse gas emissions.

Many of us on this committee have children and grandchildren. We owe it to them, and to all the children of this world, to reverse global warming and leave them a planet they can fully enjoy. The truth is that we now have the knowledge and technology to accomplish that goal. What has been lacking is the political will. I hope today that we can, in fact, develop that will. Thank you.

Voinovich:

Today, U.S. Senator George V. Voinovich (R-OH), Ranking Member of the Senate Environment and Public Works (EPW) Committee’s Subcommittee on Clean Air, offered several amendments that balanced the need to address global climate change while not losing sight of growing America’s economy to create high-paying jobs while protecting seniors and families from sky-rocketing natural gas, electricity and gasoline costs.

The amendments were offered during an EPW markup of America’s Climate Security Act of 2007 – legislation written by U.S. Sen. Joseph Lieberman (D-CT). The bill would touch nearly every segment of the economy, sending a tornado that would rip through America’s marketplace shuttering businesses, sending jobs overseas and sending energy costs through the roof for seniors and the most vulnerable.

“At a time when Congress should be looking to create an environment to grow our economy and create more high-paying jobs, some of my colleagues have chosen to take steps that would force jobs overseas while raising energy bills on seniors, families and our most vulnerable,” Sen. Voinovich said. “There is a way to harmonize our energy, economic and environmental needs – but this bill doesn’t do it. Some of my colleagues refuse to take a comprehensive view of the competing needs of the nation by harmonizing our energy, economic and environmental needs.”

Unfortunately, the full negative impacts of the Lieberman bill are still not completely known because the majority chose to rush the bill through committee without a non-partisan economic-impact analysis from the Energy Information Agency or the Environmental Protection Administration, which is the usual course of action for a bill of this magnitude.

Clinton:

The scientific consensus is clear: strong and swift action to reduce greenhouse gas emissions is needed to prevent catastrophic effects of climate change. Today the Senate Environment and Public Works Committee took a first step towards that goal by reporting the America’s Climate Security Act of 2007. This bill is a start. It makes steep reductions in emissions by 2020, encourages the development and deployment of clean energy technology, provides assistance for American families, and provides training for workers that the clean energy industry will demand. I congratulate Chairman Boxer for moving this bill through the committee. But as the bill moves forward, we have to do much better. I am firmly committed to reducing emissions by 80 percent below 1990 levels by 2050. And I think it is imperative that we auction 100% of greenhouse gas permits rather than giving them away for free to polluters. I cast votes in the committee today for amendments to move the bill towards these goals, including an amendment I offered with Senator Sanders to eliminate giveaways to utilities and other companies under the bill. Although these amendments failed, I voted for the bill because it is a step in the right direction, and Congress can no longer afford to wait. It’s time for the United States to show leadership on this issue by taking up and debating a global warming bill. Indeed, I believe Congress should be debating a cap-and-trade bill as part of a broad, comprehensive effort to combat global warming and reduce our dependence on foreign oil, including aggressive steps to improve energy efficiency and deploy renewable energy that would benefit our economy and help create millions of new jobs. But as this bill moves forward, it has to be improved to meet the enormous challenge that we face. As that process goes forward, I will continue my efforts to ensure that the final bill takes stronger action, ensures adequate assistance for American families, and ends unnecessary giveaways to corporations.

In his opening statement, Sen. Lieberman talked about the remarkable energy efficiency of the Temple of Jerusalem.

10 AM: Bond completes his opening statement by talking about what he believes are the insufficient economic protections and lack of focus on nuclear energy.

OFFRAMPS

10 AM: Craig introduces first amendment. #24. This amendment has four offramps. We want a confirmation that the cost-benefit is not more than $10 trillion per degree Celsius reduction. If we’re going to send our country in a long march into the future, let us take everyone with us. That is why the amendment has a sunset clause if China and India are not engaged.

10:07 Warner China positions itself as a developing nation. Nonsense. Wake up. They are no longer a developing nation. But on this the investment community has to have certainty in order to invest capital. With all due respect I forcefully oppose this amendment.

10:08 Lieberman This tries to address a real problem in a serious way. But I’m going to oppose it for the reasons Sen. Warner stated. I’m particularly struck by Ban Ki-Moon the statements that both US and China must act. What about the impact on businesses if China and India don’t act? We’ve included a provision from Bingaman-Specter that will impose a fee on Chinese businesses if they do not participate.

10:10 Inhofe I’m a cosponsor of this amendment and the main concern seems to be China and the developing nations. If this bill should pass, and it won’t, it would be the greatest boon to China. This amendment would restrict this boon to ten years.

10:11 Boxer This is a killer amendment from the opinion of the coalition we’ve built.

10:12 Baucus This is clearly the big question, what we do about China. I opposed Kyoto Protocol. Virtually all the senators did. Why? Speaking for myself, the developing countries were excluded. And as Sen. Warner said, China is hardly a developing country. Neither is India. China meanwhile has lots of internal problems, including pollution. But it is time for the United States to lead. I’m not going to say this provision is perfect. It’s far from perfect. In future years I’m confident we’ll find better ways to deal with this problem. In the meantime we’ll be developing many new clean technologies. I feel strongly if we keep a steady course to get this bill out on the floor. If this amendment passes it will derail the bill and impede our progress.

10:17 Voinovich I think it’s interesting that a lot of senators have a perspective based on their states. I can’t ignore the 300% increase in heating bills in my state. If we think our action is going to affect China by osmosis. They’ve made it clear they’re not going to comply with this. If we continue to let our country’s economy to deteriorate.. I think this amendment is very reasonable. I think most Americans would think it’s very very reasonable.

10:19 Boxer I will never vote to hang our future and the future of our kids on China.

10:20 Cardin I’ve been waiting for a bill that would do something about the unfair advantage China has for not doing about the environment. This bill does. For the reason of showing international leadership and for embracing a provision that says international environmental standards should be standardized, I think this bill is the right way.

10:21 Vitter This amendment doesn’t change the message of leadership. It says we need to lead, and others need to follow. Ten years is a very generous amount of time to see if anybody follows. To Sen Boxer’s comment if you believe this is a major global issue, our future is tied to China. This amendment doesn’t put China in the driver’s seat but pushes them in the right direction.

10:22 Boxer We’re not going to let China lead on this, we’re going to lead on this.

10:22 Craig If we do this and China does nothing, no scientist in my opinion is seriously suggesting this will make a significant difference to CO2 in the atmosphere.

10:23 Roll call vote. The amendment is not agreed to (8 yea, 11 nay).

DOMESTIC LOW-CARBON MANUFACTURING INCENTIVES

10:25 Sanders This amendment includes a zero and low-carbon manufacturing component in the funding.

10:29 Carper There are many opportunities. This bill does a good job of providing incentives for zero- and low-carbon technologies. The only question is whose technology will be provided? China just signed a $5 billion nuclear deal with France. I think it would be terrible for us to have to rely on foreign manufacturers.

10:31 Boxer I just wanted to announce Sen. Warner supports this amendment.

10:31 Alexander Does this apply equally to nuclear? Does it permit carbon sequestration?

Carper Yes.

10:32 Klobuchar This lets people feel they’ve got some skin in the game.

10:33 Voinovich I think there should be a nuclear title.

10:34 Sanders My main concern is sustainable energy. Europe is now responsible for 85% of wind production. Japan represents 55% of solar production.

10:35 Alexander This seems like Davis-Bacon language.

10:35 Roll call vote. Passes 12-7.

AUTO INDUSTRY JOBS

10:38 Inhofe I came to the conclusion based on CRA International’s testimony that this bill will cost millions of jobs. I call up Inhofe amendment number 13. I’d like to single out one industry that may be a bigger loser than any other, the automobile industry. My amendment is perfectly reasonable. In case CRA is right, it requires the Secretary of Commerce to annually report on whether this bill will cut 10,000 jobs in the automotive industry in the upcoming year.

10:41 Boxer This bill already has a commission that looks at the economic impact, not just for one industry but for all industries.

10:42 Inhofe Yes, you have a commission. This amendment automatically triggers new allowances to be provided.

10:43 Lautenberg With all respect for our American auto industry, suppose that there are more efficient engines that come in from outside our country. Why should we make our industry less competitive? I think that if there are jobs lost, heaven forbid, we need the jobs. But if we have a chance to reduce toxic emissions, why shouldn’t we take it? Let the companies compete to hold those jobs.

10:45 Carper Sen. Inhofe raises a fundamental issue. Do we believe in our hearts that the opportunity for creating jobs is greater by reducing emissions or are we going to lose jobs? We confronted this with CAFE. The auto industry has said if we raise CAFE standards we would close plants, lose jobs. For 22 years we haven’t raised CAFE and we’ve closed plants, lost jobs.

10:47 Inhofe He brings up a good point. CRA International considered all these things and came up with a net loss.

10:47 Lieberman A few things. We’ve seen studies of McCain-Lieberman by two federal agencies that the costs of complying are quite manageable and they don’t even include the costs of not doing anything. Sen. Baucus said something in his opening statement. This climate change bill is a Manhattan Project for energy. It’s that big. I believe one of the reasons the auto industry hasn’t been doing as well as the foreign industry is that it hasn’t been as aggressive in fuel efficiency. Since 1990 Great Britain has reduced its emissions by about 15% while its economy has grown. I want to come back to the lookback. We require the NAS every three years to review the effect of this legislation. I think this amendment is not necessary.

10:50 Inhofe We’re going to have amendments dealing with our reliance on foreign oil. Just in case you’re wrong this puts into place something we have to do.

10:51 Sanders I’m glad Sen. Inhofe raised the question of job loss in the auto industry. It’s been decimated in recent years. If we don’t get trade policy right now in twenty years Detroit will have moved to China. What we do want to do is encourage Detroit to start producing energy efficient cars Americans want.

10:53 Voinovich I would say we’d all be better off if we had an EPA or EIA analysis of this bill.

10:54 Lieberman The Clean Air Task Force did use the model maintained by EPA/EIA and analyzed the subcommittee markup. It found only a 2% lower total growth over 23 years with enactment than business as usual, and did not take into account the costs of inaction. I think the bill’s going to create a lot of new jobs. Are there costs? Yes. But what are we buying? We pay taxes for our firemen. We’re buying protection.

10:56 Boxer The Clean Air Task Force modeled this bill based on the EIA model. The CRA model in contrast was not transparent. Secondly before we vote on this amendment I think it’s important to consider unintended consequences. This amendment may encourage layoffs—it pays companies with allowances if you lay off this many workers.

10:58 Voinovich The Clean Air Task Force is an environmental group. You may say CRA is an industry group. The Clean Air Task Force assumes 115 new nuclear plants in 30 years.

10:59 Inhofe This has been a good debate.

11:00 Vote. The amendment fails.

MULTIPLE POLLUTANT CAPS

11:02 Carper Amendment to cap multiple pollutants. I feel strongly about this but I will withdraw this amendment.

11:08 Warner I would have to oppose this amendment but I hope my colleague recognizes this bill goes toward his goals.

Carper I appreciate the changes but the language added is merely aspirational.

Cardin Ozone is a serious health issue in Maryland. As is mercury. Your leadership on this issue has shown us we have to do more.

11:09 Alexander He and I have worked on a four-pollutant bill since 2003. The only disagreement we have is the allocation system. I will continue to work with Sen. Carper on this issue. At the very least I hope we will include mercury.

11:11 Sanders This is definitely an issue that needs to be addressed.

Voinovich Sen. Carper and I worked to come a compromise on Clear Skies legislation. Unfortunately we could not. There are many people who think this bill will eliminate coal. I think we ought to continue to burn coal in this country. The other point I’d like to make on the mercury number. For the first time EPA put out a number on mercury. Many people said it wasn’t the right number.

11:13 Lieberman I know Sen. Carper will not go quietly into the night on this issue. We’ve got to use coal. It is our most abundant natural energy resource. We’re making a significant investment to make sure we burn coal clean.

11:14 Inhofe I wonder where all of us were during the Clean Skies debate when the president proposed significant SOX and NOX reductions.

11:15 Carper A tough underlying issue for us to grapple is how we allocate credits to those who are polluting. Do we award those allowance to pollute based on producing the most electricity for the least pollution or to those who pollute the most? We need to deal with that, not today, but on the floor.

LOW AND FIXED-INCOME FAMILIES COST RELIEF

11:16 Bond Low and fixed-income families are particularly vulnerable to higher heating bills. This bill does not do enough. This amendment makes automatic cost relief for low and fixed-income families.

Boxer The amendment: The board would make weekly assessments on cost relief or require immediate cost relief measures to be applied if costs become unmanageable.

Bond The likelihood is that the burden will fall disproportionately on regions dependent on coal. You could have booming economies on the coasts and the middle of the country could suffer. In the absence of a nationwide crisis, we need to deal with the coal-dependent areas.

Whithouse I agree with Bond’s concern in this area. I have an amendment that I have been working on with Sen. Bond and Sen. Baucus that is not ready today. I am going to vote against his amendment but I think he’s got a very good point.

11:23 Bond Let me respond thanking him for his amendment. I question his amendment would do enough but I appreciate the kind words.

Sanders With or without this legislation home heating prices are soaring today. Many of us are working on increasing LI-HEAP funding so that families do not go cold today.

Bond You have my support.

Baucus This is another off-ramp. It’s very prescriptive. Surprising to me coming from that side of the aisle. We’re working on coming up with other methods of assistance. I think it’s better to keep the basic structure of the bill but not have as many prescriptive off-ramps.

11:26 Boxer It is a command-and-control kind of amendment and would make your chart, Sen. Bond, more complicated.

Bond I’m surprised that my colleagues in support of this Rube Goldberg machine are calling support for low-income families too prescriptive.

11:28 Baucus I have a chart indicating the billions of dollars going to various parts of our economy. Low-income families get $838.8 billion. That’s not a small amount.

11:29 Voinovich Why do we have LI-HEAP? We’ve encouraged the use of natural gas but limited the supply.

11:31 Boxer Many of my colleagues who are talking so passionately have voted against LI-HEAP. Let’s not just discover there are poor people.

11:32 Lieberman The amendment has two good goals but they’re accomplished already. The Energy Information Adminstration already does weekly analysis.

11:33 Bond I’m always happy to work with my colleague from Connecticut. I support more money for LI-HEAP but the formula is weighted to the Northeast. I’m a show-me guy.

11:35 Lautenberg I didn’t hear any voices raised when oil companies were going for ever higher profits. We’re talking about an issue that has an opportunity to obfuscate what we’re doing. This is a vote to get us off track.

11:36 Craig Idaho residents pay 60% of their household budget on heat. There’s no question in my mind we’re going into fuel switching and we’re going to see fuel prices out of sight. Ask the average poor person that drives a car. We’re seeing dramatic run ups in the costs of fuel. The reality is obvious. We ought to be dealing with this in a clear and obvious way.

11:38 Sanders I appreciate Sen. Bond’s legitimate concern about low-income families. If you look at the chart we’re talking a major increase in LI-HEAP and weatherization assistance and rural energy. It would be wrong to suggest we are not being aggressively attentive to low-income citizens.

11:39 Klobuchar We’re not talking about the costs to low-income people if we do nothing. I come from a state where we believe in science.

Whitehouse I know they are practical people and I look forward to working with them but I don’t think this is the moment.

Lautenberg Perhaps it’s been forgotten the president vetoed a bill that have $600 million more for LI-HEAP.

11:40 Roll call vote: amendment fails 8-11.

DECOUPLING

11:43 Lautenberg Amendment 1. Increases support for decoupling. Supported by NRDC, UCS, Sierra Club.

11:45 Lieberman I support this amendment. This amendment doesn’t upset the overall structure of the bill.

Sanders I want to express my strong support for this amendment. There is unbelievable potential for energy efficiency.

11:46 Amendment adopted by unanimous voice vote.

NUCLEAR

11:47 Isakson If we don’t encourage nuclear energy we’ll never be able to achieve the goals we want.

11:50 Warner Nuclear is absolutely an essential part of our energy portfolio. At this juncture in this markup regrettably I’ll have to oppose your amendment but I will join you on the floor.

11:52 Isakson Instead of offering twenty piecemeal amendments was to bring an inclusive title to the committee. I thought I’d put the whole cafeteria on the table at once.

11:53 Boxer I want to say one thing about the delicate balance. I so appreciate my colleagues understanding the delicate balance necessary to get this bill on the floor.

11:54 Inhofe I have four nuclear amendments. We’re going to have to face this and I think it would be better to deal with this in committee.

Cardin I think nuclear has to be part of our energy solution. I hope there will be a new reactor built in Maryland soon. There are other sources of energy I think we need to encourage. This bill will have a positive impact on the nuclear industry already. This is not the appropriate vehicle.

11:55 Craig I’m going to support the Isakson amendment.

11:57 Lieberman In Connecticut we’ve relied for a long time on nuclear much to our benefit. Nuclear power needs to have a resurgence in our country. I’m very pleased this bill may provide, I think will provide, such a great incentive for nuclear energy. 100s of billions of dollars in the zero- and low-carbon fund may be directed to nuclear. We’re not going to reach the goals this bill sets without more nuclear power.

11:59 Voinovich I think this bill really should have a nuclear title. Nuclear power’s renaissance is in the process of being launched. What’s contained in this proposal is absolutely essential if we are to address greenhouse gas.

12:01 Carper I want to thank Sen. Isakson for bringing up how important nuclear energy is. Sen. Isakson raises the issue of spent nuclear fuel. I know many people think of it as a hazard. I think of it as a possibility. The greatest threat to a renaissance would be an accident. I want to make sure as we go into the run-up for nuclear applications to make sure the NRC crosses every t and dots every i.

12:02 Barrasso I have a second-degree amendment.

12:03 Isakson I accept that amendment. I asked VP Gore how can we as a nation argue whether we should rejuvenate the nuclear industry? There’s a lot of politics in the nuclear issue. The nation of France generates 84% of its electricity from nuclear but their waste is 10 percent of ours due to recycling.

12:05 Craig When the government holds a stockpile you knock the legs out of the domestic production. I think we need to be careful with what we do about creating distortions.

12:06 Boxer People have differing views and the managers of the bill would appreciate it if we don’t adopt this amendment.

12:07 Roll call vote: amendment fails.

GOOD GOVERNMENT

12:08 Cardin Amendment 1.

12:09 Amendment passed by voice vote.

AVAILABLE TECH REQUIREMENTS

12:10 Voinovich Amendment 8. It requires a certification of technology available to allow cap reductions.

12:14 Boxer This is another command-and-control amendment.

Lieberman To wait the technologies to be certified before the caps go into effect is just this side of voluntary. If you give American entrepeneurship a clear goal, they’ll do it. It creates some subsidies to help businesses reach those caps.

12:21 Roll call vote: amendment fails.

BONUS ALLOWANCES FOR RENEWABLE ENERGY

12:24 Klobuchar There’s already a bonus system for CCS in the bill. CCS is essential, but this amendment makes an equal bonus for renewable. The second-order amendment changes the allocation to be just a study.

12:27 Craig Hydro is not included?

Klobuchar We are trying to develop new technologies.

Craig There are new hydro technologies that could be introduced.

12:30 Boxer There are no Congressional earmarks involved in this bill.

12:33 Roll call vote: amendment passes 11-8.

NUCLEAR OFF-RAMP

12:36 Inhofe Amendment 23. Cap is frozen if nuclear capacity doesn’t meet the schedule in the CATF model.

12:38 Lautenberg How do we know about the permitting process? I think nuclear has to be included in the search for alternative sources. I know not too long ago nuclear was considered a dirty word. But now we’re stepping up to the reality it needs to be considered.

12:40 Boxer This is another command-and-control bill. We don’t do this for solar, wind. For us to command and control any of these technologies is not how to do it. I think this undermines the real free market qualities of the bill.

12:41 Inhofe We are commanding that there will be 115 gigawatts of nuclear in the future by this bill. If we’re assuming there’s going to be that number of gigawatts there we ought to do something about it.

12:42 Lieberman I’m going to respectfully oppose this amendment. It would break the basic structure of the bill. We parcel out some auction proceeds, but how the cap is reached is determined by the marketplace. I’m for nuclear, but this would have the negative effect because people would know if not enough nuclear comes on line the cap would be frozen. The certainty of the cap is what makes the proposal effective on global warming and what drives the market. If we tinker in this way it will remove the certainty. “If the sound of the trumpet become uncertain, who will follow into battle?”

12:44 Craig I would like to offer two second degree amendments with respect to nuclear. Amendment 27 and 28.

12:46 Inhofe I have a chart. It requires a very aggressive construction rate. Nuclear provides 73% of non carbon-emitting electricity in this country.

12:47 Boxer Let’s consider these three amendments en bloc. Is that all right?

Inhofe, Craig yes.

12:48 Craig I have a concern about fuel-switching and a run-up on natural gas and will block the production of hydrogen fuel cells. If we ramp up the cost of natural gas we crimp dramatically the ability of the auto industry to bring in hydrogen fuel cell technology. New-generation high-temperature plants can generate hydrogen through electrolysis.

12:54 Roll call vote: amendments are rejected 11-8.

AVIATION GREENHOUSE GAS EMISSIONS

12:55 Lautenberg Amendment 2. Authorizes NAS to study aviation greenhouse gas emissions.

12:57 Isakson Dr. Flannery wrote Weather Makers. After 9/11 there was a marked increase in the temperature over the United States due to reduction in cloud cover due to contrails. Sometimes there are good processes.

12:59 Inhofe There’s been an attempt to bring general aviation into this jurisdiction. I’m going to oppose the amendment.

1:00 PM Boxer Everyone I meet with want to be part of the solution. The main thing is not to put the burden on one sector. To make it sound like pilots don’t want to be part of the solution. I think much higher of pilots.

Lautenberg 3% of all emissions are from aviation. There are no mandates, just a study.

1:02 Inhofe Right now we’re trying to do something with the FAA reauthorization.

1:03 Roll call vote: amendment passes 11-8.

ENERGY COST OFF-RAMP

1:05 Voinoivich Amendment 4. Mandates Board to take action in case of steadily increasing energy prices.

1:14 Boxer The president has the authority to step in. In the long run people are going to be spending less.

1:17 Sanders I applaud the concern for increases in costs in years to come. I look forward to them working with them to deal with increases in energy costs today.

Inhofe Every time we try to increase supply it gets killed on partisan lines.

Cardin This is the first time we’re making these kinds of provisions in legislation.

Voinovich The Clean Air Act just deals with human health. I’d like there to be some guidelines that trigger board action. If anyone believes it won’t cost a lot of money to put this in action they’re not being honest with the American people. It’s going to cost a ton of money.

1:23: Roll call vote: amendment fails 11-8.

1:24: Boxer 15 minute adjournment for pizza.

ADVANCED TECH VEHICLES

1:58 PM Sanders Amendment 1. Modifies advanced tech vehicle language.

2:00 PM Amendment passes by voice vote.

OUTPUT-BASED ALLOCATION

2:06 PM Carper Amendment 2. Changes giveaways of permits to be based on output of electricity instead of historical emissions. I’m going to withdraw it.

2:11 Warner I have to oppose this amendment.

2:12 Boxer I look forward to dealing with this on the floor.

Craig I’m in support of this legislation. The Pacific Northwest gets little to nothing. We ought to be rewarding all who do. I think Sen. Carper has struck the right kind of balance. You really can’t pick winners and losers.

WTO OFF-RAMP

2:15 Voinovich Amendment 1. This amendment repeals the act if the WTO finds it incompatible with trade rules.

Boxer I don’t think we should give the WTO power to repeal U.S. legislation.

2:21 Baucus We’ve looked at this provision. We do believe it is consistent with the WTO. If the WTO says the act is inconsistent with the WTO, then the offended countries have the right to retaliate in kind. Then we work it out. I do not think the act should be automatically repealed. We don’t want to tie our hands.

2:25 Lieberman If we feel so confident about this bill being consistent with the WTO then why do we oppose this amendment? It would be a kind of capital punishment for a system that would have been in place for a dozen years. Every time we make this law uncertain we weaken it.

2:29 Voinovich I would love to have a hearing about this.

Warner I endorse that proposal. The fundamental purpose of this bill is to put a solid base to allow the technology companies to get the necessary finances.

Voinovich I’m hoping that if this legislation passes we understand we’ve got to bring in the rest of the world.

2:31 Whitehouse I think the penalty this amendment proposes is self-injurious.

Voinovich I’m willing to withdraw the amendment if you’re willing to have a hearing on this.

2:26 Baucus We’re entering a new era. I’ve already scheduled a hearing on December 20 on the implications of climate change legislation.

Voinovich I will withdraw my amendment.

COASTAL IMPACTS

2:37 Whitehouse Amendments 1 and 2.

Boxer These amendments allow states to use allowances to deal with coastal impacts and requires the federal government to model such impacts.

Voinovich Is there an organization of coastal states working on this?

Whitehouse This would be consistent with their efforts.

2:40 Voice vote: amendments pass by unanimous voice vote.

OFFSHORE DRILLING

2:41 Vitter Amendment 1. There’s an abundant supply of offshore natural gas. This amendment would pass the Warner Outer Continental Shelf proposal on this bill. In addition it would only be available if natural gas prices reach $30 per 1000 cubic feet.

Boxer This is an energy committee bill. It does not belong here. It is a nonstarter for a lot of us on the coastal states. It will be handled by the energy committee. It increases domestic fossil fuel production.

2:48 Vitter Many other amendments are under energy or commerce jurisdiction. This bill is going to dramatically increase energy costs, including natural gas. I appreciate the delicate balance. I’m more concerned about the balance of policy.

Boxer This is not a subject we want to get into, like Yucca Mountain. It’s a dealbreaker for this bill.

2:52 Warner I’m darn proud of this OCS bill. Georgia, you voted against me. North Carolina voted against me. Sen. Lautenberg conducted the filibuster. This shouldn’t go on this bill. I commend you for bringing it up.

2:53 Lieberman This is obviously a controversial amendment. You have every right to bring it up. When Sen. Carper withdrew his four-pollutant bill he knew it would kill any chance of passage. Let these be argued out separate.

2:54 Craig Here is the No Zone. I am tremendously concerned that we will see the kind of fuel-switching that sends all over our chemical industry offshore. We just rejected creating hydrogen through a new kind of nuclear industry. So natural gas is our source for hydrogen.

2:57 Voinovich You encouraged energy companies to go to natural gas. The cost of natural gas escalated. We know that we are going to see fuel switching to natural gas, which will drive the cost up even higher. The recession in our state began when the cost of natural gas spiked in 2001. 300% increase, folks. 300%. This needs to be dealt with. We need to make it easier to get natural gas.

Boxer The whole purpose of this bill is to ease this transition you’re talking about. Sens. Lieberman and Warner have put literally billions into easing this transition. I would urge a no vote.

3:00 PM Vitter You’re certainly right. This matter is energy committee jurisdiction. So is the Sanders amendment. The Whitehouse amendment we just passed is commerce committee jurisdiction.

3:04 Boxer I personally think the American people want us to attack this issue.

Roll call vote: Alexander votes no, Warner votes present. Amendment is rejects 7-11.

CCS BONUS ELIGIBILITY

3:07 Sanders Amendment 3. Returns CCS bonus eligibility to 85% reduction. Supported by FOE, LCV, Sierra Club, US PIRG, UCS, Greenpeace.

3:12 Lieberman Senator Barrasso said the 85% requirement was too high. He proposed an amendment that was too low. The NRDC folks came forward and said they wanted to come into this process. This was an agreement between Sen. Barrasso and them. To state very briefly coal is our most abundant natural energy resource. We’ve got to figure out how to use coal in a way that’s not destructive to our environment. CCS is a very hopeful way to do that. This is going to be a major transition and the bonus allowances will facilitate that transition.

3:15 Boxer I’m going to vote against it with a pang in my heart.

3:20 Carper Personally I think the compromise that’s come out of the markup, I call it a third way. We make sure we incentivize the utilities to do better. The better you do, the more credits you get.

3:22 Barrasso I think we have standards that are achievable, a stretch, but achievable.

3:23 Warner I would have to join the chairman in opposing you.

Roll call vote: Amendment is rejected 6-13.

COAL PROPAGANDA

3:31 Barrasso Amendment 2: rename Wyoming and Montana university coal R&D centers. Agreed to by voice vote.

RECYCLING

3:32 Carper Amendment 3. We can do a whole lot better on recycling.

3:39 Amendment passes by voice vote with Boxer second-order amendment.

HFCs

3:41 Carper conducts a colloquy on hydrofluorocarbons. I appreciate Sen. Boxer’s willingness to work with me to deal with the unique realities of HFCs. We want to make sure we continue to have refrigeration when we need it and to drive greenhouse gases down.

80% TARGET

3:50 Sanders While it is fine that we reach a political agreement here, the scientific community is telling us that the agreement we are reaching here does not do the job that has to be done.

3:57 Inhofe I oppose the amendment.

Boxer I know each of us could write this in his her own own way. I will support this if I can. The 2020 cuts are stronger than anywhere else in the country.

3:59 Klobuchar I’m a cosponsor of this amendment. While I support this standard it’s more important to me that we act now.

4:01 Lieberman I took science for non science majors. I do respect the science and I think we have an urgent problem here. The most important thing to do is get something passed, and to make the early goals as tough as possible. If we could get 80% politically I would be all for it. Once we create this new reality by law it’s going to take off by a kind of a virtuous cycle. I am pleased we are well within the IPCC threshholds. It’ll keep us well below 500 PPM. With a sympathetic understanding of Sen. Sanders’ goals I’m going to vote against it.

4:03 Sanders My appeal is to my friends on the other side of the aisle who are intelligent people, who have children, grandchildren. I appeal to you to change the political dynamic and listen to the scientists.

4:04 Roll call vote: Baucus, Carper vote against. Amendment fails 7-12.

FORESTRY AND BIOLOGICAL SEQUESTRATION

4:07 Craig Amendment 10, with second degree agreed to by Sen. Warner. We know our forests do have phenomenal capacity for sequestration.

4:13 Boxer I know of no objection to this.

4:14 Amendment passes by unanimous voice vote.

PUBLIC TRANSIT

4:14 Cardin withdraws his amendment 2. I look forward to working with the chair in the future on this issue.

2-DEGREE LIMIT

4:16 Sanders Amendment 5. Supported by NRDC, UCS, CAP, Sierra Club, LCV, NWF, FoE. This is a be safe rather than sorry amendment.

4:20 Inhofe The temptation is to support it because this would be a dealkiller I could like. There is no recognition here that US has been overtaking by China’s emissions. Soon we’ll be passed by India. Last time I checked these are sovereign countries not under the jurisdiction by the EPA and lawsuits by NRDC.

4:21 Lieberman I’m going to oppose this amendment because it delegates to an unelected official extraordinary powers.

4:23 Sanders I share your concern. That is why in this amendment have added an explicit reference to Congressional review of EPA decisions. It does not give all responsibility to an independent agency.

4:24 Lieberman EPA would act and then Congress would act affirmatively to stop that action.

Sanders Congress can act any time it wants, you know that.

Lieberman And it usually doesn’t.

Roll call vote: Baucus, Klobuchar vote no. Amendment is rejected 7-12.

SODA ASH MINE METHANE EMISSIONS

4:26 Barrasso Amendment 6. Soda ash mines are required to vent methane emissions. This amendment would exempt these mines from being a covered facility and would provide funding to capture the methane.

Boxer Capture of these emissions would be considered an offset and there is further funding for to capture the emissions.

4:28 Inhofe I think this is a health and safety issue.

4:29 Roll call vote: amendment fails 8-11.

SMALL REFINER GIVEAWAYS

4:31 Barrasso Amendment 10. Unlike larger refiners, small refiners will be unable to absorb costs.

Boxer Refiners are already given allowances.

4:34 Inhofe It would be necessary in Oklahoma. This chart shows the amount of emissions compared to allowances given away.

Boxer Sen. Baucus and Klobuchar would like to work with you on this.

Barrasso I will withdraw the amendment.

NO INDUSTRY GIVEAWAYS

4:35 Sanders Clinton amendment 1. 2015 auction percentage would be 68.5%. This goes to the heart of the right to pollute. The government can either give the permits for free or it can auction the permits. Giveaways hand the value of the permit at no cost to the industry. I’m pleased we have made some progress. The mark we are considering ends the free allowances by five years but cuts the amount of free allowances only by the equivalent of two years. I believe that the giveaways will hurt consumers. According to the CBO could yield windfall profits. Some of the giveaways are in the neighborhood of the trillions of dollars. Even in Washington that’s a lot of money. We should auction these permits. Meeting these needs through an auction would lower the costs to the economy. I would hope that we can move forward in the direction I’ve outlined.

4:40 Inhofe I support the amendment. It’s the closest thing in the structure to a tax. I’ve often said that I would prefer a tax. It’s like choosing between cancer and diptheria. I think this is the closest thing to a free-market system.

4:41 Lieberman I’m surprised he’s supporting this. This is a poison pill. I think it’s substantively wrong. We’re asking a lot of power plants. They’re called free allowances, I guess they are. But transitional allowances is a better way of thinking of them. Power plants are going to charge their customers a lot more money. I may have asked ALCOA what’s the most important thing to support the bill, if you eliminate the transitional allowances we couldn’t support the bill. I’m strongly opposed to this amendment.

4:42 Voinovich The CBO numbers you quoted Sen. Sanders ring a discordant note. Everyone has said the allowance cost is going to be substantial. One company, Duke Energy indicated that in 2012 that they’ll see increase in energy costs in Indiana by about 53%. If we don’t have some of these transition things out there it will absolutely kill this bill. It’s already going too fast. It’s already doing fuel switching. To do what you’re suggesting will cause everybody in this country to rise up against this legislation.

4:44 Carper When the bill was reported out of subcommittee when the allowances to pollute was 23-24% auction, by 2036 we went to a full auction.

4:45 Lieberman When we submitted the first proposal we started at 52% of free allocations and never fell below 24% by 2050. In the subcommittee mark the free allowances end at 2036, now they end at 2031. If the bill passes with this amendment, it will kill a lot of companies.

Carper I thought the bonus was a prudent way of incentivizing sequestration. I called it a third way approach. Would that third way approach go away under this amendment?

Lieberman This amendment would eliminate all bonus allowances for sequestration.

Carper All of us who think clean coal have to be part of the solution, this takes it away. I would hope we would not do that.

4:48 Boxer We’ll withhold proxies following the first roll call. No: Alexander, Barrasso, Bond, Baucus, Carper, Lieberman, Vitter, Voinovich, Boxer, Klobuchar. Aye: Inhofe, Clinton, Sanders. Aye after passing: Cardin, Lautenberg, Whitehouse.

All the Democratic amendments are over. Topics addressed include more nuclear discussions, low-carbon fuel standard, state and Clean Air Act preemption, high-altitude coal.

6:33 Boxer I now move that that S. 2191 as amended be reported favorably out of committee.

6:34 S. 2191 is reported favorably by a vote of 11 to 8. (Democrats/Independents plus Warner).

Clinton proposed two amendments:

Amendment 1 (with Sanders) eliminates allowance giveaways Amendment 2 restricts CCS funding to those determined necessary to commercialize such technology

Sanders proposed nine amendments:

Amendment 1 tweaks the the advanced-tech vehicles incentive program Amendment 2 allows auction proceeds for zero/low carbon tech to go to domestic manufacturing of components Amendment 3 restores the subcommittee markup language that makes only CCS projects that meet an 85% reduction eligible for bonus allowances Amendment 4 changes the 2050 target to an 80% reduction Amendment 5 requires EPA to strengthen cap if global average temperature increase not likely below 2 degrees Celsius Amendment 6 replaces the 1/3 state allocation based on fossil fuel activities with energy efficiency efforts Amendment 7 limits total offsets allowed instead of 15% per entity Amendments 8 and 9 restore definition of “leakage” and “reversal” to subcommittee markup language

Carper proposed four amendments:

Amendment 1 caps pollutants such as sulfur dioxide, nitrous oxide, and ozone. Amendment 2 bases emissions permit giveaways on electricity output, not historical emissions (a change requested by PG&E). Amendment 3 supports recycling. Amendment 4 expands and modifies the transit allocation

Whitehouse proposed four amendments:

Amendments 1 and 2 deal with coastal impacts Amendment 3 proposes a tax rebate system for low- and middle-income households Amendment 4 restricts states’ use of free allowances to investment in energy efficiency

Lautenberg proposed five amendments:

Amendment 1 increases the decoupling incentive in permit allocations to states from 1% to 2% Amendment 2 calls for a study on aviations emissions Amendment 3 creates a set aside in auction revenues to fund local energy efficiency efforts Amendment 4 is intended to protect scientific integrity Amendment 5 directs 0.5% of auction proceeds for intercity rail

Barrasso proposed 11 amendments:

Amendments 2 and 3 support Wyoming and Montana coal R&D. Amendment 8 eliminates the Climate Change and National Security Fund Amendment 11 overrides the Endangered Species Act

Vitter proposed 14 amendments:

Amendments 1 and 5 allow offshore and on-land natural gas drilling, respectively Amendments 2 and 3 require studies on industry displacement Amendment 4 allows renewable fuel program credits to qualify as emissions credits Amendments 6 and 9 removes various sources from coverage Amendment 7 removes injury liability from CCS activities Amendment 8 prevents implementation if other environmental regulations are found to be adversely impacted Amendment 10 restricts permit banking to 18 months on non-covered entities (a change requested by the AFL-CIO) Amendment 11 modifies transportation fuel coverage Amendments 12-14 make “technical” corrections

Isakson proposed four amendments, three of which support nuclear energy. Amendment 3 prohibits the enactment of a cap without sufficient known technology, an amendment which failed in subcommittee.

Klobuchar proposed four amendments:

Amendment 1 establishes bonus allocations for renewable energy Amendment 2 reduces allowance giveaways to the power sector Amendment 3 establishes a RES Amendment 4 supports low-income consumer energy costs

Bond proposed eight amendments. 1-6 are designed to protect consumers and industry against economic harm through various means of limiting emissions reductions. Amendment 7 provides a liability system for carbon sequestration. Amendment 8 supports CCS technology.

Cardin proposed three amendments:

Amendment 1 funds the management activities of the federal agencies involved by selling allowances. Amendment 2 increases allowance allocations reserved for mass transit support from one to two percent. Amendment 3 directs auction proceeds to a Global Environmental Monitoring Systems Fund.

Inhofe proposed approximately 45 amendments, some of which are joke amendments (#12 “directs 20% of all auction proceeds be used to build homeless shelters for families without shelter as a result of job displacement due to this Act”). Amendments #23-#28 are pro-nuclear. Amendment #32 increases the auction percentage to 100% by 2029. Amendment #38 overrides the Massachusetts vs. EPA decision.

Craig proposed 46 amendments, many of which add other legislation into the bill. Amendments 2-10 deal with forestry provisions. Amendments 11-20 are “technical” corrections. Amendment #36 allows offshore natural gas drilling. Various amendments scattered throughout deal with nuclear power.