Transcript National Energy/Climate Bills

Basic elements of Model Rule:
1)applicability: applies to fossil fuel-fired electric generating units >25MW
(covers 25% of regional GHG emissions)
2) size & structure of cap:
a) states must stabilize power sector CO2 emissions at 2009
emissions during implementation (2009-2014)
b) then reduce emissions by 2.5%/yr for 2015-2018
(total reductions of 10% below 2009 levels by 2018)
3) permitting: each CO2 source must have approved CO2 budget
emission monitoring plan (EMP); developed by state energy
regulators
4) allowance allocation: most CO2 allowances auctioned off (vs. ETS)
25% allowances to support consumer benefit programs
5) temporal flexibility mechanisms:
facilities can “bank” or “rollover” CO2 allowances
early reduction allowances granted for early demonstrated reductions
extended compliance period
6) price triggers:
stage 1: if CO2 allowance cost >$7, CO2 offsets can increase
stage 2: if CO2 allowance cost >$10, CO2 offsets increase more,
compliance period extended, international CO2 credits
allowed
Basic elements of Model Rule: (cont)
7) emissions monitoring: CO2 unit must install and certify monitoring
system, report quality-controlled data (borrows from EPA acid rain
program)
8) offsets: awards CO2 offset allowances to projects outside capped
sector that sequester/reduce CO2 emissions (limited to 3.3% of unit’s total
compliance obligation
- must prove “additionality”
Who stands to gain here?
Who stands to lose?
Or is it that simple?
What would you do as a power company in a RGGI state?
What is leakage? and how does it impact RGGI?
LEAKAGE
There could be a shift of electricity generation from capped sources
subject to RGGI to higher-emitting sources not subject to RGGI.
-impossible to predict ahead of time (market and political forces unknown)
-RGGI proposes to:
1) track load vs. generation
2) monitor C-intensive nature of non-RGGI power
policy options:
1) reduce electricity demand (efficiency), so indirectly reduce leakage
2) limit the amount of CO2 (<xx lbs CO2/MWh) that could be “emitted”
through long-term purchasing agreements between RGGI utilities and
regional power plants
3) emissions portfolio standard
How did the states dole out allowances?
- different than ETS, most allowances auctioned off
How the
much
money
didofthey
make?
able 2 shows
total
amount
proceeds
yielded from the sale of RGGI CO2 allowance
e and for the entire 10-state RGGI region, through December 31, 2010.
Table 2: CO 2 Allowance Proceeds by State through Dec 31, 2010
STATE
Proceeds –
Auctions 1-10
Connecticut
Delaware
Maine
Maryland
Massachusetts
New Hampshire
New Jersey
New York
Rhode Island
Vermont
REGION
$44,900,580
$18,858,578
$23,544,204
$147,530,363
$123,229,478
$28,215,274
$90,913,275
$282,272,683
$12,340,209
$5,701,535
$777,506,180
Proceeds –
Direct Sale
(’09-’10)
$441,094
n/a
n/a
n/a
n/a
n/a
$11,310,356
n/a
n/a
n/a
$11,751,450
Total Allowance
Proceeds
Across three past CO2 allowance auctions, cost ~$3/ton
g in a Clean Energy Economy
$45,341,674
$18,858,578
$23,544,204
$147,530,363
$123,229,478
$28,215,274
$102,223,631
$282,272,683
$12,340,209
$5,701,535
$789,257,630
y Economy
How much did it cost the average customer?
Distributing the CO2 allowance costs around the ratepayers in those
e has developed
its own
for$0.73/month
investing itstoshare
of CO2electric
allowance
States, RGGI
costsplan
added
the average
utility bill.
ts its own investment strategy, overall, states have allocated proceeds
Where did all this money go?
y
ergy
y bill
g
of
s to
carbon
Has RGGI reduced emissions? [does it matter?]
National Energy/Climate Bills
• How does the legislative process work?
• What bills have been considered?
• What are the pros and cons of each? Who
stands to win and who stands to lose?
The legislative process:
how does a bill become law?
Step 1: Bill is introduced by sponsor (and co-sponsors)
assigned a # (S.#### for Senate bills and H.R.#### for House bills), printed and
posted on web  http://www.govtrack.us
Step 2: Committee consideration
referred to one or more House or Senate committees; must receive a majority
vote from committee members in order to move to the floor for a full vote
Step 3: Subcommittee consideration
some bills sent to special subcommittee for further study or public hearings;
subcommittee may “mark up” bill by adding amendments and making changes;
must receive a majority vote to send back to committee or it dies
Step 4: Bill “reported” by committee; published
Step 5: Floor action – legislative calendar
bill scheduled for debate, or “floor action”; majority party decides order
Step 6: Debate
House members typically limited to 1-5 minutes each, if at all
Senators have unlimited speaking time  opponents can filibuster until either
a) back-door agreement reached
b) 60 senators move to end debate and call a vote
Step 7: Voting
either electronic or verbal
Step 8: Bill referred to other chamber
other chamber can approve, reject, amend, or ignore the bill
Step 9: Conference committee  towards “reconciliation”
members from House and Senate work to compromise on differences
in passed bills; changes must be approved by House and Senate, else bill dies
Step 10: Signature by President
if President vetoes bill, 66% of House and Senate members needed to override
Bill Name
Status
HOUSE
H.R. 2454: American Clean Energy and Security Act
Waxman, D-CA; Markey, D-MA
Passed 6/25/09
219 to 212
SENATE
S. 1462: American Clean Energy Leadership Act
Bingaman, D-NM (chairman)
Passed Comm.
S. 1733: Clean Energy Jobs and American Power Act
Kerry, D-MA; Boxer, D-CA; Cardin, D-MD; Kirk, D-MA; 9/30/09
Passed Comm.
S. ????: Kerry, D-MA; Graham, R-SC; Lieberman, I-CT working to introduce
comprehensive climate/energy bill that will muster 60 votes needed to
block predictable Republican filibuster
H.R. 2454: American Clean Energy and Security Act
Key Provisions:
1) Clean Energy
-renewable electricity/efficiency standard, CCS, new rules for new coal
plants, R&D for electric vehicles, $ for smart grid
2) Energy Efficiency
- building, lighting, appliance, and vehicle efficiency programs
3) Cap and Trade Program
4) Transitioning to a Clean Energy Economy
-preserve domestic competitiveness, support workers and consumers,
support for domestic and international adaptation measures
5) Agriculture and Forestry-related offsets (tied to #3)
Waxman-Markey Cap & Trade
Covers
1) stationary sources emitting >25,000 tons of GHG/yr
2) oil refineries
3) importers of petroleum
4) natural gas distributors
5) “F-gas” producers (CFCs, HCFCs, HFCs etc) [separate cap]
Targets
-3% of 2005 by 2012, -17% by 2020; -83% by 2050
Distribution of Allowances
20% allowances auctioned at first, 70% by 2030; funds to go to
1) protecting consumer (esp. low income) from rising electricity and gas
prices
2) fund technological advances
Where does the money from allowances go to?
electricity
consumers for
price protection
consumers as
energy divident
Waxman-Markey Cap & Trade (cont.)
Offsets
- allows 2 billion tons of offsets system-wide (1 billion domestic;
1 billion international); President can recommend increase or decrease
-creates “Offsets Integrity Advisory Board” to oversee and qualify offsets
- involves domestic offset program using agriculture and forestry
Costs to Consumers
- Congressional Budget Office cost of $175/yr/household on average
net benefit of $41/yr/household for low-income
- EPA estimates cost of $80-111/yr/household
Carbon Market Oversight
Federal Energy Regulatory Commission; Commodity Futures Trading
Commission; no over-the-counter trading of derivatives
Interaction with State and Regional Cap-and-Trade Programs
State programs put on hold 2012-2017
Existing state CO2 allowances can be traded in for federal allowances
Waxman-Markey on Coal
Focuses on CCS (Carbon Capture and Storage)
-creates Carbon Storage Research Corporation ($1 billion/yr for 10 years funded
from small tax on electricity rates); oversee 5 large commercial CCS operations
-for 10 years, gives bonus allowances to companies that do CCS (equivalent to
$100/ton of CO2); second 10 years bonus allowances are auctioned
ACES gives $250 billion in CCS incentives by 2050!
Waxman-Markey on Nuclear and low-C Energy
Creates sustained federal funding for low-C energy
-creates Clean Energy Deployment Administration (initially funded by $7.5
billion in “green bonds” granted by US Treasury); 20yr charter; oversee
distribution of allowances granted to clean energy projects
Removes regulatory and financing hurdles for nuclear
-places sole responsibility for nuclear permitting and financing in the DOE;
heavy oversight by Energy Secretary; $19 billion available in financing right now
Electricity generating capacity by 2050 in BAU and with ACES
Remaining slides from Dr. Ken Mitchell, EPA 2010
Climate Change and Energy
• An EPA Priority
– Reducing greenhouse gases (GHG) is a top
priority for Administrator Jackson
• Some key actions taken:
–
–
–
–
Endangerment Finding
Mandatory Reporting
Renewable Fuels Standard
Light-Duty Vehicle GHG Emissions
Standards and CAFE Standards
– GHG permitting requirements on
large industrial facilities (Tailoring Rule)
– Carbon Capture & Sequestration
– A variety of voluntary and other initiatives
DRAFT PRESENTATION
Endangerment Finding
•
Endangerment Finding: Current and projected concentrations of the six key wellmixed GHGs in the atmosphere threaten the public health and welfare of current
and future generations
•
Cause or Contribute Finding: The combined emissions of these well-mixed GHGs
from new motor vehicles and new motor vehicle engines contribute to the
greenhouse gas pollution which threatens public health and welfare
•
Final Rule published in Federal Register December 15, 2009
Greenhouse Gases (GHGs)
• Carbon Dioxide (CO2)
• Methane (CH4)
• Nitrous Oxide (N2O)
• Hydrofluorocarbons (HFC)
• Perfluorocarbons (PFC)
• Sulfur Hexafluoride (SF6)
GHG Reporting Rule
Upstream
Sources
Downstream
Sources
Mobile
Sources
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Suppliers of Coal-based Liquid Fuels
Suppliers of Petroleum Products
Suppliers of Natural Gas and Natural Gas Liquids
Suppliers of Industrial GHGs
Suppliers of Carbon Dioxide (CO2)



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
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General Stationary Fuel Combustion Sources
Electricity Generation
Adipic Acid Production
Aluminum Production
Ammonia Manufacturing
Cement Production
Ferroalloy Production
Glass Production
HCFC-22 Production and HFC-23 Destruction
Hydrogen Production
Iron and Steel Production
Lead Production
•Vehicles and engines outside of the light-duty sector
(light-duty in NPRM to Establish Light-Duty Vehicle
Greenhouse Gas Emission Standards and Corporate Fuel
Economy Standards)
* We delayed inclusion of certain source categories as we consider comments and options
Covered GHGs
• Carbon Dioxide (CO2)
• Methane (CH4)
• Nitrous Oxide (N2O)
• Hydrofluorocarbons (HFC)
• Perfluorocarbons (PFC)
• Sulfur Hexafluoride (SF6)
• Nitrogen Trifluoride (NF3)
• Hydrofluorinated Ethers (HFE)
Expressed in metric tons of
carbon dioxide equivalent
(mtCO2e)
First report for CY10
Final Rule Published in
Federal Register on
October 30, 2009
Renewable Fuels Standard (RFS2)
• Revision to current RFS (RFS1) as
required by the Energy
Independence and Security Act
(EISA)
• Significant increase in
renewable fuels to displace
petroleum consumption
(36
billion gallons by 2022)
• CO2 Lifecycle analysis
• Final Rule Signed 2/3/2010
Lifecycle GHG Thresholds Specified in EISA
(percent reduction from 2005 baseline)
Renewable fuela
20%
Advanced biofuel
50%
Biomass-based
diesel
50%
Cellulosic biofuel
60%
a The 20% criterion generally applies to renewable
fuel from new facilities that commenced construction
after December 19, 2007.
Mobile Source GHG/CAFE Proposed Rule
•
First national GHG emissions standards under the
Clean Air Act
•
Satisfies requirements under both Federal
programs and the standards of California and
other states
•
Applies to passenger cars, light-duty trucks, and
medium-duty passenger vehicles, covering model
years 2012 through 2016
•
Meet an estimated combined average emissions
level of 250 g CO2 per mile in model year 2016,
equivalent to 35.5 mpg if the automotive industry
were to meet this CO2 level all through fuel
economy improvements
•
Proposed in Federal Register September 28, 2009
Proposed Tailoring Rule
•
Focused on large facilities emitting over 25,000 tons of CO2e/year
•
Facilities required to obtain construction permits that would demonstrate they are
using the best practices and technologies to minimize GHG emissions
•
The rule proposes new thresholds for greenhouse gas emissions (GHG) that define
when Clean Air Act (CAA) permits under the New Source Review (NSR) and title V
operating permits programs would be required for new or existing industrial facilities.
•
Would cover nearly 70 percent of the national GHG emissions that come from
stationary sources, including those from the nation’s largest emitters—including
power plants, refineries, and cement production facilities.
•
Small farms, restaurants and many other
facilities would not be subject
programs
•
Proposal in Federal Register on 10/27/09
types of small
to these permitting