Among other things, the Consumer-First Energy Act of 2008 would roll back tax breaks for oil companies and invest the money in renewable energy development and energy efficiency technology. It also would create a windfall profit tax on oil companies failing to invest in increased capacity and renewable energy resources.

According to one of the bill’s co-sponsors, Sen. Bernie Sanders (Ind.-VT):

“The bottom line is that at a time when this country faces a major crisis in terms of the price of oil, when many working families in our state and all over this country are hurting, I think we have brought forth a comprehensive piece of legislation, which begins to attack that problem with the result of lowering the price of oil.”

Reaction Less than Stellar

Thus far, reaction across the blogosphere is just as what might be expected. Dave Roberts at Grist makes no bones about his skepticism and calls the move a “counter-pander.” He writes:

“Look: you can’t promise Americans you’re going to lower the price of gas. It’s a lie, and they’re going to notice when prices don’t go down. It might help you tactically in the short-term, but in the long-term it’s going to come back and bite you on the ass. Gas prices are going to keep going up, and good leadership begins with honesty.”

It’s not just bloggers who oppose the Consumer-First Energy Act, the New York Mercantile Exchange (NYMEX) released a statement yesterday decrying the windfall profits title of the bill as “misguided.” According to the statement:

“Regrettably, this proposed margin provision, which would push trading from regulated and transparent markets to unregulated and nontransparent markets, would constitute a significant step backward in transparency and market integrity.”

The problem I see with this legislation is that it does nothing to address the structural problems that are causing a rise in oil prices. Simply put, the only way for us to even try and stabilize oil prices is to use less. Using less would require major investments in public transportation, the kind of investments the feds are very skeptical of providing.

Some of the components of the Consumer-First Energy Act are as follows (adapted from bill summary - available here)

• A windfall profit tax for oil companies - A 25 percent windfall profits tax on companies that fail to invest in increased capacity and renewable energy sources. This provision would not apply to the profits those companies reinvested in clean, affordable, domestically produced renewable fuels, expanding refinery capacity and utilization, or renewable electricity production.
• Stop speculation in the oil markets - First, the bill prevents traders of U.S. crude oil from routing transactions through off-shore markets to evade speculative limits and sets forth reporting requirements. The bill also requires the Commodities Futures Trading Commission to set a substantial increase in the margin requirement for all oil futures trades, contracts or transactions.
• Roll back tax breaks for oil companies and invest the money in renewable energy - Bill would roll back $17 billion in tax breaks for oil and gas companies and instead invest those taxpayer dollars to improve consumer price protection, renewable energy development and energy efficiency echnology through a designated Energy Independence and Security Trust Fund.
• Stop government purchases of oil for the Strategic Petroleum until the price of oil drops to $75 a barrel or less - The Consumer-First Energy Act calls for suspending through December 2008 oil purchases for the SPR. Filling could resume when the 90 day average price of crude oil recedes to $75 or less.
• Protect consumers from price gouging - Give the President the authority to declare an energy emergency should there be a shortage, disruption or significant pricing anomalies in the oil market.

See Also:

• “Clean Energy Tax Credits Will Not Be Passed Without Funding“
• “Senate Passes Renewable Energy Tax Credits: Why am I not More Excited?“
• “Feast or Famine Cycles of US Clean Energy Development“
• “Show Me the Deliberation…Please“

Associated Press

Photo: © Tommyschultz | Dreamstime.com

The renewable energy tax credits were slipped into a housing bill that that did not end up looking the way its lead author, Sen. Chris Dodd really intended it to, remarking earlier in the week that it was “a housing bill, not a Christmas tree.”

However, will the production tax credit and investment tax credit ever make it to the President’s desk to sign? Despite the optimism shown by some well respected voices in the green blogosphere, I would argue that we will see some sort of stripped-down version of the renewable energy tax credits, if any at all. The House has hardened its opposition to this version of the tax-credit extensions, which are estimated to cost $6 billion over 10 years. House leaders have strong objections to deficit-financed tax breaks, and with few exceptions, they have offset lost tax revenue with tax increases or spending cuts elsewhere. But since the President rebuked Congress’ previous attempts at funding the tax credits by rescinding tax breaks for big oil, there hasn’t been much of a discussion as far as where the money for this program will come from.

“I doubt that the House will accept these extensions without some corresponding offsets,” said Senate Energy and Natural Resources Committee Chairman Jeff Bingaman (D-NM) on the Senate floor. “This leaves the administration with a key role to play in developing a compromise that will be acceptable to both chambers.”

So we’re leaving this up to the administration to figure out? Yikes.

Dow Jones

In a wonky twist that would alter the clean energy incentive structure in this country rather significantly, Senators Alexander (R-TN) and Kyl (R-AZ) offered an amendment (S. Amdt 4429) that would extend the production tax credit for two years (instead of one) for wind, geothermal, biomass, landfill gas, small hydro, and wave and tidal power. But the provision would also cut the production tax credit for wind in half and spread the funding out more evenly across technologies.

“I would argue that wind is over-subsidized,” said Alexander. “Wind is a proven technology… and this amendment would focus on emerging baseload technologies.”

The amendments are being considered as part of a housing and foreclosure package and they are completely unrelated to the House’s Renewable Energy and Energy Conservation Tax Act (H.R. 3221), which would have rolled back tax breaks for oil companies in order to pay for the renewable tax incentives. The tax package last fell short of passage in the Senate in February - by a margin of one vote.

‘Feast or famine’ Cycles of Clean Energy Development (CleanTechnica)

As was reported at Hill Heat, and elsewhere, Senators John Ensign (R-NV) and Maria Cantwell (D-WA), led a bipartisan group of senators in announcing a bill to incentivize the development of renewable energy and expand energy efficiency in buildings, homes, and appliances. The Clean Energy Tax Stimulus Package of 2008 (pdf) will provide some certainty to investors and those individuals and businesses that are considering adding solar, wind, biomass, methane capture, or other clean energy technologies.

Teetering on the brink of passage

Renewable Energy tax packages always face trouble in the Senate, and this dates back to our first energy crises in the 1970s. In a more recent example, a tax package failed repeatedly on the Senate floor, including a $22 billion version that fell one vote short of winning approval as an amendment to a broader energy bill in December. Many Republicans balked at the funding mechanism for the previous renewable energy incentives because they rescinded tax breaks from the big energy companies (which was spun by the right as a “tax increase.”).

Summary of the bill:

• The renewable energy production tax credit (PTC) is extended one year to 2009 and modified to include tidal power
• The solar and fuel cell investment tax credit (ITC) is extended 8 years to 2016
• The residential energy-efficient property credit is extended one year to 2009, and the $2,000 cap is removed
• Clean Renewable Energy Bonds (CREBs) are extended one year to 2009, with an additional $400 million authorized
• The 10% ITC for energy-efficiency improvements to existing homes is extended one year to 2009
• The contractor tax credit for energy-efficient new homes is extended two years to 2010
• The energy-efficient commercial buildings deduction is extended one year to 2009 and increases the $1.80/sqft max to $2.25/sqft
• The energy-efficient appliance credit is extended to 2010

Photo: dbking

The latest estimates are, that if Yucca Mountain isn’t finished until 2017, “we” will owe the utilities an estimated $7 billion in penalties, provided by law, because the repository isn’t finished. Bump completion time up another 3 years, and the bill goes up to about $11 billion.

When this repository thing started some 30 years ago, the feds agreed to dispose of spent fuel created by nuclear power stations. I’m sure there were some very good reasons for that decision, not the least of which retaining control over the stuff, which could fall into the wrong hands and become something very dangerous.

So the government and the nuclear industry agreed that if the repository wasn’t finished by a certain date, the government would pay the power stations for having to store their own waste until it was completed. Sweet deal, they create high-level, radioactive waste and taxpayers stand the expense of putting it away for millennia.

What that means Mr. and Mrs. taxpayer, and utility rate payer, is the federal government promised to have the Yucca Mountain repository finished ten years ago. Each day that goes by, the ante goes up for the utilities, and if the project is scrubbed, then what, will the settlement option still be on the table until a repository is completed? Another 20 years maybe?

Well shucks, why shouldn’t we help make the nuclear energy folks wealthy, after all, they’re providing a service we can’t do without. As a matter of fact, they want to build more facilities and create more waste. You know what that means, “we” get stuck with providing a “nuclear dump” and they get paid if it isn’t ready.

This is a ludicrous situation at best. Nevada doesn’t want the thing and I doubt any state would want it, but every thing’s gotta be somewhere, and since they’ve dug a five mile long hole in the mountain, they might as well fill it up with nuclear waste as planned. So every time Nevada Senator Harry Reid (D-NV) pressures Congress to dump Yucca, I wonder whose side he’s really on.

Ward Sproat, director of the Office of Civilian Radioactive Waste Management for the DOE, told me in a podcast interview (Why Has It Taken So Long?) that nuclear utility rate payers are charged a fraction of a penny per kilowatt hour of electricity they use, to help fund construction of the Yucca Mountain repository.

That fund now stands at an estimated $21 billion, and Sproat told the National Association of Regulatory Utility Commissioners that the project’s budget is $400 million a year. He is quoted as saying, “we are never, ever going to build this repository with that kind of cash flow funding; it just ain’t going to happen.” He believes that over time, construction costs will rise to about $1 billion a year until, and if the project is completed. Mr. Sproat also told me that he was required by law to send a report to Congress later this year, outlining the need for a second nuclear waste repository. That’s “second”, not a replacement for Yucca Mountain. He said the report will go to congress with a recommendation that another site be chosen and developed.

My cynical nature makes me wonder if that $21 billion is even there anymore, considering the way our representatives have been throwing money at the war in Iraq and God only knows what other excuses have been used to raid the fund. Could that be one of the reasons the budget is so low?

Face it, “we” (taxpayers and ratepayers) are subsidizing nuclear facilities, as well as paying the going rate for service, and will continue to do so until either a repository is completed, or there’s a major change in the law.

Of course proponents of nuclear power generation won’t have a problem with paying the extra dollars, after all, it’s a part of doing business.

I think it’s an abomination and it’s time to get off the pot, tell Congress to set the wheels in motion to finish the Yucca Mountain project as soon as possible and get that stuff out of backyards in 39 states.

Yes, this is a reversal of my earlier comments on Yucca Mountain. It took that interview with Mr. Sproat to wake me up to the reality of what’s happening to the “little guys and gals”, you and me.

What do you think?

Source: Las Vegas Review-Journal

On Wednesday, the Senate Finance Committee included measures to extend the Production Tax Credit (PTC) for renewable energy through the end of the 2009. The PTC, which is currently the most effective policy tool for developing renewable energy in the US, is set to expire at the end of 2008. The bill would also extend for one year a credit, equal to 30 percent of qualifying expenditures, for the purchase for qualified PV and solar water heating.

Senator Ken Salazar (D-CO), a vocal supporter of renewable energy for rural communities, issued a statement in strong support of the move:

“This package provides targeted tax incentives for small businesses that are the engine of our economy…It is my hope that, before the end of the week, we can pass this bill in the Senate and begin working with our House colleagues to come to swift agreement on how to give America’s economy the jump-start it needs.”

Another proposed amendment came from the Senate’s second most liberal, Vermont Sen. Bernie Sanders. The Sanders amendment would extend funding to help those with skyrocketing home-heating costs. “Without increased home heating help, senior citizens on fixed incomes, persons with disabilities, and low-income families with children are in danger of going cold in Vermont and throughout the country. We must not let that happen,” said Sanders. You can watch Sanders comment on video here. (And no, that is not a Vermont accent!). The good folks over at Watthead make a good case for contacting your legislator in support of amendments like these and other green amendments in the economic stimulus package.

The Finance Committee’s version of the stimulus package will most likely face opposition to any amendments to the house version of the stimulus package. What will the opposition look like? “Form of - Senate Filibuster!” “Shape of - Veto Threat!” (Wonder Twins anyone?)

Photo: Jeff Kubina via flickr

Sen. Salazar Press Release

Renewable Energy Access

The crown jewel was certainly a near-40 percent increase in fuel efficiency requirements for vehicles by 2020. For the first time, SUVs, vans, and small trucks fall under the same regulations as passenger cars. Each vehicle group must achieve a 10 miles per gallon (mpg) increase in fuel efficiency by the target year, with an overall average requirement for the manufacturer’s fleet increasing from 27.5 mpg to 35 mpg. The current requirement has not changed in nearly 20 years.

Senator Carl Levin (D-MI) fought the standards and wanted to instead pass a more auto industry-friendly fuel requirement. But he admitted that one reason for his effort’s failure was the growing concern over global warming. From the Associated Press:

“‘The public wants action, rightfully so, on global warming,’ Levin said in an interview. And he added, the auto industry is ‘a juicy target.’”

Although an improvement in fuel efficiency is a long-overdue step forward, some perspective is required. Watthead over at Cleanergy.org points out the 35 mpg standards by 2020 is about where China and Japan are today, where the European Union was five years ago, and where states that adopt California’s tailpipe standards will be in five years.