EPA Finalizes Greenhouse Gas Emissions Reporting Rule

While the Senate loudly debates health care, the Environmental Protection Agency (EPA) released its “final rule” mandating greenhouse gas (GHG) monitoring and reporting. This will affect approximately 10,000 facilities in all sectors of the economy and they will be required to monitor and collect their GHG emissions data beginning in 2010. The EPA will require the reporting of GHGs over what it defines as “threshold levels” every year. This is estimated to come with a cost of $115 million the first year and $72 million each year thereafter.

The data collected by this rule will serve as the foundation for the nation’s future climate control programs. This rule will work in tandem with the climate bill being debated by the Senate and the data will be used to measure compliance.

The rule requires data collection beginning January 1, 2010, with the first annual reports due March 31, 2011. The reporting requirements generally apply to facilities within one of 31 source categories that emit at least 25,000 metric tons of carbon dioxide equivalent (CO2e) per year.

The 25,000-ton threshold applies to cumulative emissions for the entire year; so facilities that may exceed the threshold will need to begin collecting data. However, most commercial buildings and small businesses are expected to be below the threshold. To get to 25,000 metric tons CO2e, businesses would have to combine the emissions of approximately 2,300 homes or 4,600 regular cars. The EPA stressed in its Fact Sheet that the final rule only applies to livestock operations with manure management systems. Additionally, the EPA is not requiring mobile sources, including fleet operators and vehicle owners, to report because such emissions will be covered by reports from fuel suppliers and engine manufacturers.

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Senate Begins Debate on Climate

Sen. Barbara Boxer (D-Calif.) and Sen. John Kerry (D-Mass.) have put forward their bill for climate change with a new strategy toward getting its passage. They left all of the details of the bill to be decided later. Their version of the bill calls for a 20 percent cut in U.S. greenhouse gas (GHG) emissions by 2020. A House measure passed this summer calls for a 17 percent reduction in GHGs. Both bills have focused on cap and trade as their preferred means to reduce carbon emissions.

The proposed Senate bill preserves the Environmental Protection Agency’s ability to regulate emissions unilaterally. It also offers new incentives for nuclear power plant construction – a provision many Republicans have sought and one that could be crucial to attracting bipartisan support for climate legislation.

According to the Los Angeles Times, the Senate proposal puts off several key decisions, such as how to allocate emissions permits under the cap and trade system, for future discussion. In doing so, Boxer and Kerry – and indirectly the Barack Obama administration – were signaling their willingness to cut deals in order to pass a climate bill.

The unresolved issues, however, drew criticism from the top Republican on the Senate Environment Committee. Sen. James M. Inhofe (R-Okla.) told Boxer in a letter that until the details are set, “farmers, families and workers have no way of gauging how acutely they will be affected from job losses, higher electricity, food, and gasoline prices.”

Of course the devil continues to be in the details. If the Senate passes a bill without fleshing out the details, then it will be up to the committee to determine what the final bill will look like. Not a bad strategy if you do not think you can get the votes any other way.

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Chamber Fallout

The U.S. Chamber of Commerce is losing members because of its stance on cap and trade. Over the last few months the Chamber has been questioning whether legislation that would adversely affect our economy should be enacted when it is not clear if climate change is man-made or whether such a change could be altered through the implementation of a cap and trade scheme. Exelon, Pacific Gas and Electric and PNM Resources have all decided to leave the Chamber because of these comments. John Rowe, CEO of Exelon, said, “Inaction on climate is not an option. If Congress does not act, the EPA will, and the result will be more arbitrary, more expensive, and more uncertain for investors and the industry than a reasonable, market-based legislative solution.”

For its part, the Chamber issued this statement:

Along with world economic growth, global greenhouse gas emissions are increasing. Regardless what this means for climate change, the private sector and Congress have expressed a very important common point of view, specifically: measures taken to address any stated climate change challenge – such as limiting greenhouse gas emissions to no more than double what they were in pre-industrial times – must not harm the United States economy.

Congress is performing a balancing act, striving to preserve energy security while also limiting energy use and the fuels to be used for the purpose of addressing climate change. On one hand, Congress seeks to place serious limits on energy exploration, but, on the other, continues to push for energy independence and carbon-constraining climate change legislation. The Chamber is very concerned with Congress’ perceived ability to balance these two goals.

What Congress must continue to recognize is that electricity is the “juice” that runs our country. And this country’s economic well-being will depend on the sustainability of the “juicers” – coal, natural gas, petroleum, nuclear, and hydropower, to name a few – for the foreseeable future. This country’s energy goals will be met only by a commitment to technology innovation and to all types of energy sources.

The U.S. Chamber of Commerce, on behalf of business and industry, strongly supports comprehensive legislation to reduce emissions of greenhouse gases while providing for a strong American economy. The Chamber will work to discourage ill-conceived climate change policies and measures that could severely damage the security and economy of the United States. At the same time, the U.S. Chamber encourages positive measures, such as long-term technological innovation and clean technology development and deployment.

It is unclear how these statements give rise to the mass exodus of members of the Chamber, but the row continues.

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Energy Dept. Lends Big Money to Fisker and Tesla to Build Plug-in Cars

Coming in with the big win is luxury electric vehicles manufacturer Fisker Automotive, which scored a $528.7 million loan from the Department of Energy (DOE) to build a plug-in electric vehicle. The DOE also gave Tesla $465 million. These are very expensive cars – currently affordable by only the very wealthy – but the hope is that the loans will enable the companies to produce lower-cost versions.

The Star reported that Fisker will receive more than $500 million in federal loans to develop a plug-in hybrid sports car with a sticker price of nearly $90,000 and a new plug-in hybrid vehicle to be built in the United States.

The DOE said that it would lend $528.7 million to Fisker from a $25 billion fund to develop fuel-efficient vehicles, making the Irvine, California, startup the fourth automaker to receive loans from the program.

Energy Secretary Steven Chu said, “This investment will create thousands of new American jobs and is another critical step in making sure we are positioned to compete for the clean energy jobs of the future.”

Fisker is expected to release its first vehicle, the Karma, in the summer of 2010. The $87,900 plug-in luxury sports sedan, which has solar panels on the roof and allows motorists to drive gas-free for 50 miles, will be built in Finland by Valmet Automotive.

The DOE said that while the assembly of the Karma will be done overseas, more than 65 percent of the parts will come from U.S. suppliers. The remaining $359.36 million in loans will be directed to Fisker’s Project Nina, an effort by the automaker to develop a lower-cost, higher-volume plug-in hybrid car by late 2012. Henrik Fisker, CEO of Fisker, said, “This conditional loan represents a significant step in America’s future. With it, Fisker Automotive can rapidly develop affordable clean cars that satisfy our passion for driving and help restore the U.S. as an auto industry leader.”

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Is Garbage the Solution to Tackling Climate Change?

Converting the rubbish that fills the world’s landfills into biofuel may be the answer to both the growing energy crisis and to tackling carbon emissions, claim scientists in Singapore and Switzerland. New research published in Global Change Biology: Bioenergy reveals how replacing gasoline with biofuel from processed waste could cut global carbon emissions.

Biofuels produced from crops have proven controversial because they require an increase in crop production, which has its own severe environmental costs. However, second-generation biofuels, such as cellulosic ethanol derived from processed urban waste, may offer dramatic emissions savings without environmental concerns.

“Our results suggest that fuel from processed waste biomass, such as paper and cardboard, is a promising clean energy solution,” said the study’s author, Hugh Tan, associate professor of biological sciences at the National University of Singapore. “If developed fully this biofuel could simultaneously meet part of the world’s energy needs, while also combating carbon emissions and fossil fuel dependency.”

The team used the United Nation’s Human Development Index to estimate the generation of waste in 173 countries. This data was then coupled with the EarthTrends database to estimate the amount of gasoline consumed in those same countries.

The team found that 82.93 billion liters of cellulosic ethanol could be produced from the world’s landfill waste and that by substituting gasoline with the resulting biofuel, global carbon emissions could be cut by figures ranging from 29.2 percent to 86.1 percent for every unit of energy produced.

“If this technology continues to improve and mature these numbers are certain to increase,” concluded co-author Lian Pin Koh from ETH Zürich. “This could make cellulosic ethanol an important component of our renewable energy future.”

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The Pittsburgh Summit: Acting on Global Energy and Climate Change Challenges

The G-20 leaders at the Pittsburgh Summit in Sept. made a critical commitment to phase out inefficient fossil fuel subsidies over the medium term while providing targeted support for the poorest. This groundbreaking effort will encourage the conservation of energy, improve our energy security and provide a downpayment on our commitment to reduce greenhouse gas emissions.

The White House gains leadership on removing subsidies for hydrocarbon production, guaranteeing that the price of fuel will go up all over the world. I am sure that we want to lead, but do we really want to lead in that direction?