Tuesday, November 13, 2007
"A Leader In Renewable Energy Development, OG&E Serves As A Model To Energy Suppliers Across The Country.”
On Tuesday, Senator Inhofe welcomed Donald R. Rowlett, Director of Regulatory Policy and Compliance for OG&E Energy Corp., before the Senate EPW Committee. Senator Inhofe invited Mr. Rowlett to testify at the hearing, "Legislative Hearing on America's Climate Security ACt of 2007, S. 2191." OG&E is a regulated utility company that serves approximately 780,000 customers in Oklahoma and western Arkansas.
"I was pleased to welcome Mr. Rowlett before the Senate Environment and Public Works Committee today," Senator Inhofe said. "A leader in renewable energy development, OG&E serves as a model to energy suppliers across the country. Their commitment to developing renewable energy sources – without federal mandates – has resulted in Oklahoman’s paying some of the lowest electricity rates in the country.
"Therefore, as Congress considers climate legislation that would drasticly increase energy costs, I appreciate hearing OG&E’s concerns about the severe economic impact that this legislation would have on Oklahomans and Americans. While some in Congress rush to impose these financial burdens upon the American people, I remain committed to ensuring Oklahomans continue to be he heard in Washington DC.”
Friday, November 16, 2007
"Senators are going to be asking the American people to pay more for home energy and pay higher prices at the gas pump for no climate benefit. This bill will simply result in real economic pain, for no climate gain." - Senator James Inhofe (LINK)
Momentum Fades as Opposition Grows:
Widely respected non-partisan Charles River Associates (CRA) issued a November 8 analysis of Lieberman-Warner global warming cap-and-trade bill (S.2191) that reveals it will cost $4-6 trillion dollars in welfare costs over 40 years and up to one trillion per-year by 2050. (LINK)
American Council for Capital Formation's (ACCF) new analysis on November 8 of the Lieberman-Warner bill finds the bill will lead "to higher energy prices, lost jobs and reduced GDP (gross domestic product)." (LINK)
Sen. John McCain (R-Ariz.) "is not endorsing the Warner-Lieberman bill ‘because it doesn't include the nuclear issue by name,' according to his spokeswoman Melissa Shuffield. ‘We can't effectively reduce our emissions without including nuclear energy, which is more efficient than the technologies in the bill.' (Source: 10-18-07 Washington Post - LINK)
Senator Joseph Lieberman (I-CT), the co-author of the Lieberman-Warner cap-and-trade bill, conceded on November 1 that his bill would cost "hundreds of billions of dollars." (LINK)
Democrat Presidential candidate John Edwards has also come out in strong opposition to the Lieberman-Warner bill, calling it "a massive corporate windfall" on November 1. (LINK)
Senator George Voinovich (R-OH) critiqued the Lieberman-Warner bill's proposed new Federal bureaucracy on November 8: "The very mechanisms the bill advances to contain costs seem to be more the stuff of academic theorizing than sound analysis. We have heard from no witnesses on the efficacy of the [proposed federal Carbon Market Efficiency Board] and its ability to protect the economy; veiled allusions to the Federal Reserve Board only remind us of the decades of trial and error endured before that institution regularized its procedures." (LINK)
The AFL-CIO has voiced multiple concerns with Lieberman-Warner, calling the bill "overly aggressive" in a November 5, 2007 letter. (LINK)
U.S. Chamber of Commerce said the Lieberman-Warner bill "does not adequately preserve American jobs and the domestic economy." The letter also stated: "Without participation by developing nations, the carbon constraints imposed by [Lieberman-Warner] would penalize domestic businesses attempting to compete in the world market while non-participating developing nations continue to get a free ride." [Note: Watch U.S. Chamber of Commerce's new TV ad opposing the Lieberman-Warner global warming cap-and-trade bill. LINK to New 30 Second TV Ad ]
A November 11th Washington Times editorial called Lieberman-Warner: "A misguided environmental-policy bill meandering through the Senate would slap U.S. businesses with pie-in-the-sky requirements for cutting greenhouse gases by unattainable amounts." The Times added: "The bill fails to compensate and protect consumers from rising natural gas prices and harms job security by encouraging companies to move overseas to nations with less draconian standards. In short, the bill's effects would land a crippling encroachment on U.S. power plants, factories and transportation sectors." (LINK)
An October 29th article in Politico details the fading momentum for the Lieberman-Warner bill. The article notes that the "climate bill faces wave of opposition" and is "headed for a bumpy ride" It quotes the National Religious Partnership for the Environment calling Lieberman-Warner "fundamentally flawed." (LINK)
Orange County Register editorial writer Mark Landsbaum wrote on November 6: "Reality is starting to bite to such an extent that even Democrat Presidential candidate John Edwards calls [the Lieberman-Warner] bill what it is, ‘a massive corporate windfall' for big corporations preparing to game the artificial, government-invented market for profiteering." (LINK)
November 15, 2007
Senators Say Results Reinforce the Need for Analysis of Lieberman-Warner Bill
On Thursday, Senator James Inhofe joined Senators George V. Voinovich (R-OH) and John Barrasso (R-WY) in saying today that new Energy Information Administration (EIA) analysis reinforces the need for a full analysis of the Lieberman-Warner bill now before the EPW Committee. New analysis from the EIA released this week shows energy costs for consumers and employers will be even more expensive – and burdens on hard-working Americans, the elderly and the poor will be even more severe – if Congress adopts carbon mandates but fails to enact policies to increase domestic energy supplies.
In response to a request from Senators Voinovich, Barrasso and Inhofe sent in mid-September, EIA found that cap-and-trade legislation, without new nuclear power plants and rapid deployment of biomass and clean coal technology, will cause huge increases in electricity and natural gas prices.
Senator Voinovich: “The energy supply crisis in the United States is sending jobs to China, destroying our manufacturing communities and forcing consumers to pay even higher energy bills. If we pass cap-and-trade legislation without increasing energy supplies, our country could face an economic catastrophe, and what’s left of our good-paying jobs could vanish.”Senator Barrasso: There is no incentive in this bill for China and India to follow our lead if we are going to weaken our economy, lose jobs, and penalize companies. Hard-working taxpayers need clean, affordable energy, period. Wyoming has tremendous energy resources which cannot be ignored."
Senator Inhofe: “This finding proves what I have always feared. Imposing limits on carbon emissions without new sources of low-emission energy will result in a crushing financial blow to Americans everywhere, especially to the poor. Yet, in hearing after hearing, it has become clear that the environmental community plans to erect barriers to new nuclear power and increased natural gas supply – which would be essential in meeting our energy needs in an emissions constrained world. It’s the classic bait-and-switch. But this study reveals how costly it will be if we fall prey to that trap.”
In July of this year, EIA analyzed S. 280, the Climate Stewardship and Innovation Act of 2007 and found that the bill – which was introduced by Senator Lieberman – would have devastating economic consequences if enacted. Notably, S. 280 is less stringent than the Lieberman bill now being considered by the Environment and Public Works (EPW) Committee.
EIA’s analysis of S. 280 includes many assumptions, including a substantial increase in nuclear power generation. EIA assumed about 150 new nuclear plants (approximately 150,000 megawatts) will be added within 30 years – a figure the nuclear industry would readily admit is a political and practical impossibility because:
*There has not been a new order to build a nuclear plant in the United States in the last 30 years;
*There is no manufacturing infrastructure nor enough skilled workers to build and operate about 150 new nuclear plants within 30 years; and
*The nuclear industry has pointed out it will be difficult to even build 30 new nuclear plants in that time period.
EIA also assumes an increase in biomass generation and the development of carbon and capture sequestration technology that – due to political, regulatory and financial obstacles – will be extremely difficult to achieve. Even under those optimistic assumptions, the overall costs of the bill would be staggering.
By employing more realistic assumptions, EIA found that “restricting the use of multiple low- or no-emission electricity generation technologies increases the use of natural gas for power generation and raises natural gas prices, electricity prices and CO2 permit prices.”
For example, in the alternative cases examined:
*Higher natural gas use means natural gas prices are 41 to 53 percent higher in 2030 than business as usual projections.
*Electricity prices in 2030 are between 34 to 40 percent higher than business as usual projections.
The senators also requested that EIA model impacts beyond 2030. While EIA is currently unable to process this request, estimating the costs of climate change legislation beyond 2030 is extremely important, as the costs of a mandatory program are likely to be greatest after that point. For example, in testimony before the EPW Committee last week, Dr. Anne Smith of Charles River Associates International said the Lieberman bill would cause welfare losses of $4 to $7 trillion between 2010 and 2050.
November 11, 2007
A misguided environmental-policy bill meandering through the Senate would slap U.S. businesses with pie-in-the-sky requirements for cutting greenhouse gases by unattainable amounts.
Thursday, November 15, 2007
At Thursday's Environment and Public Works Committee hearing, several Senators called for more time to review and analyze the economic impacts of the Lieberman-Warner global warming cap-and-trade bill. Senator Barbara Boxer (D-CA), the chair of EPW, rejected such calls saying no more time or analysis was needed to mark up the bill (S.2191).
But during the 2005 Clear Skies bill debate (S.131), Democrat Senators consistently called for more time, more analysis and a delayed mark up, despite having significantly more time and analysis of Clear Skies than is now available on the Lieberman-Warner climate bill. The Democrats called for more time during the Clear Skies debate despite the fact that Bush Administration provided the Committee with more than 10,000 pages worth of modeling on air quality, costs, job impacts, fuel switching, and deaths avoided for the various proposals. The EPW Committee had more data on Clear Skies in 2005 than they had when they passed the Clean Air Act Amendments of 1990 out of Committee.
Senator James Inhofe (R-Okla.), Ranking Member of EPW, responded to comments made at today's hearing on the Lieberman-Warner bill.
"It is disingenuous to claim no more analysis or study is necessary to fully understand the impacts of the Lieberman-Warner bill," Senator Inhofe said today. "When the GOP was in charge of EPW, we provided significantly more analysis, data and time to examine the Clear Skies legislation. It is unfortunate that a bill this important, this costly, would be pushed through the Committee process without any real examination simply to score political points at a UN conference. I think Americans deserve more from Congress."
Sampling of comments from Senators in 2005 urging more time for adequate review during the Clear Skies debate:
Senator Boxer on March 9, 2005 EPW Business Meeting to consider S.131 "Clear Skies Act of 2005:" "I would ask unanimous consent to place into the record a letter that was written by [Senators] Tom Carper, Max Baucus, Lincoln Chaffee, and Barack Obama...and the point here is that the analysis that they ask for which is a side by side of what each major bill, Senator Jeffords bill and the committee bill and Senator Carper/Chafee bill be analyzed side by side. We're still waiting!... We don't have what we need to have."
Senator Thomas R. Carper (D-DE) on January 26, 2005: "I am concerned about reports saying that the White House and Senate Republicans want to move Clear Skies quickly and without fully engaging Democrats about what is best for the country. If the approach to moving this bill is going to be `'my way or the highway'' then we're going to end up in a traffic jam. I hope we can work through our differences and produce legislation that will improve our air quality in a cost-effective way."
Senator Carper on February 16, 2005: "Let me first of all applaud the decision that you've made today, it's a constructive step to give us the time to really sit down and discuss its principles, what we want to do and what we need to do to find common ground..."
Senator Max Baucus (D-MT) on February 2, 2005: "A rush to mark-up [Clear Skies], without laying any foundation for a bi-partisan compromise to take to the floor, is not a strategy for success. This is frustrating because I want a good bill. It's the right thing to do and I think we can get it done. Mr. Chairman, let's set this Committee up to succeed. I think we're close on so many issues but the process needs time work itself out. Let's give it that time to see what can be done. It will be time well spent and I think it will only help this bill's prospects going forward.
Senator James Jeffords (I-VT) on March 9, 2005: "I appreciate the time you have given us over the past weeks to discuss moving forward. Most of the members would agree that we would need more time, more information from EPA, and better understanding of actual impact these proposals would have on human health and the environment."
Thursday, November 15, 2007
Madame Chairman, I have found the legislative hearings conducted over the last week to be quite informative, as I'm sure has been the case for other Members of the Committee. As we begin the process of digesting the testimony, I would like to share what I think are the common themes of all these hearings: this will be very, very costly; the impacts will be severe; and the bill will have significant impacts on energy markets.
There remain some fringe elements who still claim that this bill will create jobs instead of destroy them. But most people are acknowledging that this bill will cost a great deal of money. Indeed, I appreciate the acknowledgment by one of the sponsors of this bill, Senator Lieberman, who was quite candid that this bill will cost hundreds of billions of dollars. We have heard testimony from perhaps the premier econometric modeling firms in the country that found the impacts of this bill would be substantial - with national costs escalating to between $800 billion to $1 trillion per year and costs of up to $2700 annually or more than $200 per month to the average family. Within just a few years, up to 2.3 million people will be put out of work by this bill and the cost of gasoline, natural gas and electricity will skyrocket, with electricity prices climbing 36-65 percent.
The Midwest and the South will see the most dramatic increases. If we're lucky, the Northeast and California will see dramatic increases in LNG imports. If we're not, the economic consequences of this bill would be even worse.
A November 6 Washington Post article put it succinctly when it stated that the current global warming proposals "will require a wholesale transformation of the nation's economy and society."
The fact is that many U.S. businesses are at the margin, and industries such as iron and steel, concrete, fertilizer, and manufactured goods would be forced overseas where the carbon footprint would only grow. I would also add that if the costs to provide concrete increases dramatically, it will drive up the costs of highway projects. Moreover, no one has any idea how we will make up the over 30% energy shortfall by 2020.
Much has been made about the California experience, but it is important to remember they are still in the planning phase, and not only have they not decided how to make their reductions yet, but they haven't starting reducing yet either.
The fact is that this bill is not ready for prime time. It appears structured to fail. While they have yet to oppose it officially, it is clear from the positions taken by organized labor that it has serious concerns with this bill and what that will mean to America's workers. In closing, I would ask my colleagues who are thinking of voting for this bill one question: for all the pain and disruption this bill will cause to our nation's families, what are we buying?
From EPA's October 1st analysis, it is clear that our unilateral actions of this magnitude will still do nothing to avert increasing concentrations of greenhouse gases - instead of being slightly above 700 parts per million at the end of the century, we will be at slightly under 700 parts per million - 300 parts per million above today's levels. If there is to be any opportunity to reduce global concentrations, it will have to come from the emerging nations that will be responsible for increasing those concentrations. This bill fails to do that.
It was true ten years ago when we passed Byrd-Hagel, and it is true today - we should not pass a law if it harms the American economy or if developing countries are not part of the equation. This bill fails on both those fronts and should be rejected.
The non-partisan Congressional Budget Office's (CBO) director, Peter Orszag, testified before the House of Representatives on November 1 and cautioned that giving emission allowances away to companies under a cap-and-trade system "could create 'windfall' profits for those firms."
The CBO also warned that "price increases would disproportionately affect people at the lower end of the income scale" and said a tax on emissions "is generally the more efficient approach" than a cap-and-trade system. (LINK)
Orszag's testimony before the House Budget Committee was entitled "Approaches to Reducing Carbon Dioxide Emissions." The U.S. Senate Environment and Public Works Committee is currently holding hearings on the Lieberman-Warner cap-and-trade bill (S2191).
According to the CBO testimony: "Obtaining allowances-or taking steps to cut emissions to avoid the need for such allowances-would become a cost of doing business for firms that were subject to the CO2 cap. However, those firms would not ultimately bear most of the costs of the allowances. Instead, they would pass along most such costs to their customers (and their customers' customers) in the form of higher prices. By attaching a cost to CO2 emissions, a cap-and-trade program would thus lead to price increases for energy and energy-intensive goods and services that contribute the most to those emissions. Such price increases stem from the restriction on emissions and would occur regardless of whether the government sold emission allowances or gave them away."
The CBO also stated poor Americans would bear the brunt of these policies.
"The rise in prices for energy and energy-intensive goods and services would impose a larger burden, relative to income, on low-income households than on high-income households. For example, not incorporating any benefits to households from lessening climate change, CBO estimated that the price increases resulting from a 15 percent cut in CO2 emissions would cost the average household in the lowest one-fifth of the income distribution about 3.3 percent of its income but the average household in the top quintile about 1.7 percent of its income," the CBO said.
Finally, the CBO found that "studies typically find that over the next several decades, a well-designed tax would yield higher net benefits than a cap-and-trade approach."
Wednesday, November 14, 2007
From the Inhofe EPW Press Blog
First, the Inhofe EPW Press Blog would like to be one of the first to congratulate New York Times environment reporter on his new blog, Dot Earth. In his post last night, America's Leaky Buildings and the Climate Challenge, Revkin asked Senator Inhofe for a comment on the findings of a new report "North American Carbon Budget and Implications for the Global Carbon Cycle." Senator Inhofe provided the following quote touting his commitment to increasing energy efficiency and his work on promoting the use of geothermal heat pumps:
"Increasing energy efficiency has long been a top priority for me. One of the least known but most effective ways to increase energy efficiency in our homes and businesses is utilizing an exciting new technology called geothermal heat pumps. Geothermal heat pumps are a proven, effective, and efficient technology that can meet consumer heating and cooling needs while simultaneously conserving energy. That's why I teamed up with Senator Ken Salazar (D-Colo.) on November 6 to introduce the bipartisan Geothermal Heat Pump Development Act of 2007, which would provide American homes and businesses with tax credits to promote greater use of geothermal heat pumps. Geothermal heat pumps are electrically-powered devices that use the earth's natural heat storage ability to heat and cool homes and meet energy demands. Our legislation encourages the use of this renewable and cost-effective energy source by providing tax credits for businesses and residents who install geothermal heat pumps. Similarly, I introduced legislation in June to encourage the use of this renewable source in federal buildings. I worked with Senator Hillary Clinton (D-NY) to see that it was added to the Senate-passed energy bill."
Click on the links below to learn more about Senator Inhofe's efforts to promote the use of geothermal heat pumps: