Boxer-Kerry climate bill arrives amid praise, criticism

The US Senate’s latest effort to address global climate change emerged after several weeks of anticipation as Barbara Boxer (D-Calif.) and John F. Kerry (D-Mass.) introduced their bill on Sept. 30.

Nick Snow
OGJ Washington Editor

WASHINGTON, DC, Sept. 30 -- The US Senate’s latest effort to address global climate change emerged after several weeks of anticipation as Barbara Boxer (D-Calif.) and John F. Kerry (D-Mass.) introduced their bill on Sept. 30.

The measure immediately drew applause from environmental and other organizations, and fire from oil and gas associations and other business groups. It also provided a basis for the Senate to begin serious work in the next few weeks to create a final bill, which probably will have to go to conference. The House passed its own bill, HR 2454, by seven votes on June 26.

“This bill addresses major challenges of our generation: protecting our children and the Earth from dangerous pollution; putting America back in control of our energy future; creating the policies that will lead to millions of new jobs; and through our example, inspiring similar actions around the world to avoid an unstable and dangerous future,” said Boxer, who chairs the Senate Environment and Public Works Committee.

“Global warming is our challenge,” she urged during a press briefing with Kerry, adding, “Economic recovery is our challenge. American leadership is our challenge. Let's step up right now. Let's not quit until we have fulfilled our responsibility to our children and our grandchildren.”

Kerry said, “Our health, our security, our economy, our environment all demand we reinvent the way America uses energy. Our addiction to foreign oil hurts our economy, helps our enemies, and risks our security. By taking decisive action, we can and will stop climate change from becoming a ‘threat multiplier’ that makes an already dangerous world staggeringly more so.”

Party-line responses
Congressional responses generally followed party lines on both sides of the Capitol. US House Speaker Nancy Pelosi (D-Calif.) called the bill “a strong foundation for Senate action on our clean-energy future.” Senate Republican Conference Chairman LaMar Alexander (Tenn.) called it “fancy, complicated words for high-cost energy that sends jobs overseas looking for cheap energy” and suggested that Congress take “practical steps to produce low-cost, clean, carbon-free energy and create jobs” instead.

James M. Inhofe (R-Okla.), the Environment and Public Works Committee’s ranking minority member, said that hearings on the bill should be fair and open because the measure, as introduced, lacks several important details. “While I’ve noted that the Democrats have the votes to pass this bill through the committee, that does not mean Republicans will stand down. We will expose this bill and its contents throughout every step of this process,” he said.

In her remarks to reporters, Boxer said the first major part of the bill, formally known as Clean Energy Jobs and American Power Act, includes authorizations, all of which would be eligible for appropriations and some which are eligible for both appropriations and allowances.

“Some of these are enhanced from the Waxman-Markey bill; some are new,” Boxer said, referring to the House’s bill which was cosponsored by Energy and Commerce Committee Chairman Henry A. Waxman (D-Calif.) and Edward J. Markey (D-Mass.), who chairs the committee’s Energy and Environment Subcommittee.

Authorizations in the Senate bill include investments in natural gas, new electricity transmission infrastructure, nuclear research and development and worker training, and “green economic development; agricultural and forestry offset opportunities; investments in transit systems and incentives for efficient hybrid and electric motor vehicles; and “adaptation authorizations that include wildfire prevention, flood control, water infrastructure, and investments in coastal communities and wildlife protection,” Boxer said.

“Our bill gives a much stronger role to mayors and local governments,” she added.

Allowances, incentives
The bill’s second major section would set up what Boxer called “pollution reduction and investment incentives” containing “strong principles for market transparency and oversight” and setting up an offsets integrity office, she continued. “Allowances in this section will be detailed in the chairman's mark,” she said.

“We have put into this section a soft collar to address cost containment and limit speculation while maintaining the environmental integrity of the pollution cap. And our bill does not add one penny to the deficit,” Boxer added. Several witnesses at a Sept. 16 Senate Energy and Natural Resources hearing on a carbon cap-and-trade system’s potential economic impacts suggested that a ceiling, or collar, would be needed as well as a floor to price carbon credits for trading.

The incentives are designed to keep US businesses competitive as the country pursues the bill’s pollution reduction goals, the sponsors said. It would mandate carbon emission cuts of 20% by 2020 and 50% by 2050 from 2005 levels, according to an overview at the Environment and Public Works Committee’s web site. It said that the system would apply only to major polluters, initially about 7,500 facilities which account for nearly 75% of total US carbon emissions. “Over 98% of American businesses and all farmers are exempt,” it said.

Environmental leaders applauded the bill. Sierra Club Executive Director Carl Pope called it an important step forward, adding that he was pleased the measure would set a strong, short-term carbon reduction target and retain the US Environmental Protection Agency authority to regulate global warming emissions. Natural Resources Defense Council Pres. Frances Beineke said the goal of a 20% cut in carbon emissions by 2020 was “strong and achievable.”

American Petroleum Institute Pres. Jack N. Gerard was more critical. “Boxer-Kerry leaves unaddressed key elements of how it intends to constrain carbon emissions,” he said on Sept. 29 after examining an early copy of the measure. “Unfortunately, it appears to be following the pattern the House followed, which resulted in a political bidding process that picked winners and losers.”

‘Goes further’
National Petrochemical & Refiners Association Pres. Charles T. Drevna noted, “While the bill passed in the House was controversial enough given its ambitious reduction targets, the Senate bill goes even further in seeking more unrealistic reductions that will impose onerous regulatory burdens on domestic refiners amidst fierce global competition and increased costs on the driving public, farmers, and truckers.”

Drevna added, “The Senate proposal also fails to harmonize existing federal laws specifically by removing the preemption of New Source Performance Standards for capped sources, which means that large facilities will be subject to both the emissions cap and EPA [New Source Performance Standard] regulations. Like its House counterpart, this bill will only further weaken our nation’s energy security.”

America’s Natural Gas Alliance, which represents 28 of the country’s leading independent producers representing more than 40% of the nation’s total gas supply, took a more positive view. “The Clean Energy Jobs and American Power Act provides a starting point with ‘natural gas placeholder’ language. The placeholder establishes a new EPA program to provide financial incentives to power projects that reduce greenhouse gas emissions that are not otherwise eligible for tax credits,” explained ANGA Pres. Rod Lowman.

Lowman said the bill includes provisions that will let ANGA help develop language that effectively promotes gas as part of the national climate solution. “With the right policy incentives, natural gas can and should be the foundation of the solution for our energy future. Natural gas can provide dramatic decreases in greenhouse gas emissions and do so more quickly than any other currently viable options. Natural gas can also enhance our nation’s energy security through increased use of natural gas vehicles,” Lowman said.

The Industrial Energy Consumers of America, meanwhile, continued to urge Congress to develop global climate change legislation that does not include a carbon cap-and-trade program. Adopting one without the rest of the world doing the same would place the US at a significant economic disadvantage, IECA warned in a statement. “It is unreasonable to think that we or other countries could force countries to comply with GHG reductions in the event lower GHG emissions means slower economic growth or higher energy costs to their consumers,” the group indicated.

Contact Nick Snow at nicks@pennwell.com.

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