Senate passes energy bill

The Senate sent an energy bill to the House which includes strong fuel economy standards but doesn’t include provisions that would have promoted renewable fuel use. Detroit had hoped for weaker fuel economy standards, and environmental groups had hoped to see a requirement that electric utilities generate at least 15% of their power from renewable fuels. The groups also lost a battle to boost taxes on oil companies and use the proceeds to subsidize production of renewable power from wind, solar energy and biomass.

Environmental groups scored a victory earlier in the debate when the Senate rejected a proposal to fund conversion of coal to liquid (CTL) fuel. The vote was a response to pressure from environmental groups and a report from the National Academies of Science that suggested there may be less coal than previously thought. CTL is estimated to increase greenhouse gas emissions by nearly 120%. Senator Obama, responding to this same evidence, dropped coal-to-liquid from his Presidential energy plan on Tuesday.

An amendment which would have required electric utilities to provide 15% of their electricity from renewable sources was filibustered, as was the proposal to tax oil companies to fund renewable power generation. Nebraska’s Senator Grassley fought for the proposed tax, telling his colleagues “We?re taxing the oil industry to get a renewable energy industry started. I hope you?ll understand that God only made so much fossil fuel and that there?s got to be a follow-on if we?re going to have growth in our economy.” The proposals had support from more than 50 Democrats and Republicans, but lacked the 60 votes to end debate.

Meanwhile, unsustainable coal plants remain the staple of new electrical generation. MidAmerican Energy Holdings’ CEO David Sokol told the Washington Post “A lot of congressmen ask me, ‘Dave, why are you building that coal plant?’ And I say, ‘What are my options?’” The proposed funding for renewable energy would have helped provide those alternatives.

The House will have an opportunity to take up some of the same issues when it considers the bill. The House’s rules make it more likely that stronger measures will pass there, allowing a conference committee to sort out the details.

While Congress backed away from sweeping energy reform, New Jersey passed the stiffest carbon emissions law in the nation. The rules would restrict emissions from all sources, not just electrical plants, to cut emissions to 1990 levels by 2020, a 17% drop in emissions over-all. The bill requires additional cuts by 2050. New Jersey will also monitor emissions from plants out of state which sell electricity to the Garden State. The details of how those reductions will be achieved were left to state agencies.