Waxman-Markey to Jump Hurdles before Fast Tracking CCS2009-04-29
Washington (CERR) – The draft American Clean Energy and Security Act (ACES), which contains billions to fast track the development and deployment of large-scale carbon capture and storage (CCS) is stirring debate among CCS proponents.
The draft legislation, authored by Reps. Henry Waxman (D-Calif.) and Ed Markey (D-Mass.) not only pushes CCS deployment, but would also require the country to enact a cap-and-trade system, cut greenhouse gas emissions by 20 percent below 2005 levels by 2020 and enact a renewable portfolio standard.
The first sticking point seems to be the 20 percent emissions reduction.
Sections of ACES mirror Rep. Rick Boucher’s (D-Va.) Carbon Capture and Storage Early Deployment Act first introduced in the 110th Congress and re-introduced last month.
However, Boucher is currently leading a group opposed to the 20 percent emissions reduction requirement out of concern for its potential cost to the economy. He is reported to be more in favor of a reduction rate closer to 6 percent and says he will try to get Waxman and Markey to go lower the bar.
But others believe that the ambitious 20 percent reduction level is exactly what is needed to get large-scale CCS systems deployed.
A hastily put together economic analysis from the U.S. Environmental Protection Agency (EPA) earlier this month, said a serious attempt at reducing greenhouse gas emissions by 20 percent by 2020, would speed the development of CCS so that it would be ready for commercial development in a short six years -- far earlier than CCS opponents have been arguing.
“Coal with carbon capture and storage technology that allows coal-fired power generation to play an important role in a carbon-constrained world comes online in 2015 as a result of significant incentives in the bill,” the EPA said in the executive summary of the EPA analysis of the Waxman-Markey Discussion Draft.
Environmental group, the Natural Resources Defense Council (NRDC) agrees that enacting ACES into law would push the large-scale deployment of CCS. George Peridas, a scientist at NRDC’s Climate Center praised the draft legislation and its treatment of CCS development.
“[T]he draft seems posed to finally break the deadlock in CCS and setting the stage for deployment at a scale that would make a meaningful dent in CO2 emissions. Chairman Waxman and Markey deserve praise for their thoughtful treatment of the subject,” he said on his blog.
Waxman and Markey’s draft ensures the phase out of the “most serious threat to meeting emission reduction limits – conventional coal-fired power plants” and provides a financial mechanism to “move us to the next generation of plants that capture and dispose of their carbon,” Peridas said.
The law firm Akin Gump Strauss Hauer & Feld said on its ClimateIntel briefings blogsite that ACES, at first blush, looks like a wish list for the coal industry and other CCS proponents.
“Between directing the Environmental Protection Agency (EPA) to create an improved regulatory framework for CCS, authorizing billions in new ratepayer-generated funds to support early commercial CCS projects, and authorizing EPA to make direct payments to companies that sequester CO2, the bill, as developed by Congressmen Henry Waxman and Ed Markey, appears intent on removing regulatory and economic barriers to commercializing CCS technology.”
The analysis added that the incentives come with a lofty condition. The final section in the CCS portion of the bill lays out the expectation the CCS will become commercially viable by the middle of the next decade.
“Should ACES become law, the expectations for CCS commercialization will be high, but the stakes for the coal industry will be even higher,” it said.
The 20 percent emissions reduction target is not the only thing standing in the way of getting this bill finalized. More than a few moderate and conservative Democrats say they have reservations about the allowance allocations in the cap-and-trade section of the legislation and also about the size of a nationwide renewable energy production mandate.
Several Republicans have made their opposition to the legislation clear. At hearings last week, former House speaker and leading voice of the GOP Newt Gingrich argued before the House Committee on Energy and Commerce, that the Democratic proposal would "punish the American people" by imposing higher energy costs. "This bill is an energy tax," Gingrich told the House committee. "An energy tax punishes senior citizens, it punishes rural Americans; if you use electricity it punishes you. This bill will increase your cost of living and may kill your job."
Rep. John Shimkus (R-Ill.) told the committee: "This is the largest assault on democracy and freedom in this country that I have ever experienced."
House Minority Leader John Boehner (R-Ohio) voiced his opposition to the bill earlier this month on national television by saying that "The idea that carbon dioxide is a carcinogen that is harmful to our environment is almost comical."
But despite the vocal opposition, Waxman, chairman of the House Energy and Commerce Committee, is still saying he plans to get the bill out of Committee by Memorial Day and environmental proponents of CCS are cheering him on.
If the bill passes into law with its CCS-related provisions largely unchanged, “[T]he incentives will flow to those who are ready to claim them first, and our assessment is that major contracts would be signed within months of enactment,” NRDC’s Peridas said.
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