The American Gas Association (AGA) is pleased that the Senate Energy and Natural Resources Committee recently approved legislation to support the development of U.S. natural gas resources along the Outer Continental Shelf, which will benefit consumers, the economy and the environment. Specifically, the committee approved an amendment offered by Senator Byron Dorgan (D-ND) that will provide significant new access in the Eastern Gulf of Mexico by opening this area beyond 45 miles of the Florida coast for oil and natural gas development.

The Dorgan amendment also included the “Destin Dome” natural gas discovery, which lies approximately 25 miles south of Pensacola and is expected to produce anywhere from 110 to 165 billion cubic feet of gas every year for the next 20 years. Access to the Eastern Gulf of Mexico, which is known to have vast resources of natural gas that are close to existing pipelines and other vital infrastructure, will not only help supply more domestic natural gas to consumers but will also ultimately help make America more energy secure.

AGA was also encouraged that the Senate Energy and Natural Resources Committee legislation included biogas as a qualified renewable for the Renewable Electricity Standard (RES). Biogas can be sustainably produced as a product of our waste-producing (landfills, agricultural processes and animal farms) lifestyle. This efficient process also captures methane that otherwise would have entered into the atmosphere.

And while not included in the Senate Energy Committee’s recent energy legislation, AGA will continue to educate policymakers about a recently released National Academies’ (NAS) report to Congress, which found that the Department of Energy should consider changing its measurement of appliance energy efficiency to one based on the full-fuel cycle. This measurement takes into account the amount of energy produced and lost from the point of production to the final point of use. This more accurate measurement would provide consumers with more complete information on energy use and environmental impacts. For example, 70 percent of the total amount of fuels used in producing, generating and transmitting electricity is lost by the time that electricity reaches a customer. By contrast, producing and delivering natural gas directly loses only about 10 percent of its usable energy.

The NAS study also supports the “carbon footprint labeling” provisions championed by AGA that were recently included in the Waxman-Markey climate change legislation. These provisions would expand the existing Federal Trade Commission EnergyGuide labeling program for appliances to include carbon footprint information.

AGA looks forward to working with Congress as it considers energy and climate change legislation that strives to improve our environment and energy security, while also encouraging the increased use of clean, abundant, domestic natural gas. As the cleanest fossil fuel, emitting only one carbon atom when burned, natural gas can play a major part in reducing carbon emissions.

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There have been considerable improvements made to the Waxman-Markey bill over the last several months, and we at Progress Energy are encouraged by the positive changes already made. But there is still much work ahead to ensure that the bill sets achievable targets and protects American consumers from significant price increases.

Our position is firm: We support getting the biggest reduction in greenhouse gas emissions with the least cost to families and businesses.

We will continue to work actively with policy makers to implement positive changes that address changing energy and environmental realities without compromising the reliable, affordable electricity our customers depend on us to provide 24 hours a day.

The steel industry supports the widespread development and growth of renewable energy, including nuclear. Changing our energy infrastructure over time to one that provides abundant, green energy is the fastest way to reduce our country's CO2 footprint. Steel is unquestionably an important part of the solution, as abundant amounts of steel is needed to build green energy equipment, such as nuclear reactors and wind towers.

However, we must take care to quantify the cost of such a transformation and to identify who will bear the brunt of these costs. Transforming our energy sector requires, for example, large capital expenditures, including the equipment necessary to build wind tower fields and transmission lines. We need to explore who will share these costs and how it will impact our economy for decades to come.

Chairman Bingaman and Ranking Republican Murkowksi have done an excellent job developing bipartisan energy legislation in this very partisan time. However, this effort and the Waxman-Markey legislation in the House suffer from one major common defect: the failure to deal with the new era of natural gas surplus in which the U.S. now finds itself. It is as if both Houses are legislating for last year's energy challenges. The reality, however, is that all that we thought we knew about U.S. supplies of natural gas can be thrown out the window. It is remarkable!. Domestic supplies of ecnomical natural gas have increased by a whopping 40% or more in ONE YEAR, but no one has even held a hearing on it. No one has considered how these supplies of natural gas will affect energy markets and the economics of alternative energy. It is an amazing story of technology and it should be GOOD NEWS, but no one seems to know what to do with it because it does not fit into the preconceived energy agenda based on last year's thinking of natural gas as a "bridge fuel" only .

I am old enough to remember another time when the U.S. wrote off natural gas. A synthetic fuels corporation was established to try to develop gas (and liquids) from coal. Utilities were prohibited from using natural gas to generate electricity, and were told to use coal (of course now they are being told not to use coal and to use renewables). Congress was wrong then and a lot of taxpayer dollars were squandered. Customers are still paying for the costs of the biggest coal gasification plant that was built. You know what they say about those who fail to learn from history........

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It is great to see bipartisan support towards finally getting the country moving toward a real energy policy. However, bipartisanship often comes with significant compromises and give-and-takes. Chairman Jeff Bingaman (D-N.M.) and Senator Lisa Murkowski (R-Alaska) are burning the midnight oil on this to be sure, and their staffs and the staffs of other Senators are putting great efforts toward these compromises and give-and-takes.

The end result will not be the bill that this lobby group or that lobby group would necessarily embrace with vigor. In many ways the bill is a set of first steps toward something much better, or at least one would hope. It does read like it was written by powerful people who see the problems of climate change and energy security not as nearer term crises, but as slow roll issues that are looming somewhere in a future horizon. It also shows some of the difficult tradeoffs between energy security and environmental security being handled in tough-minded political ways. Well, this is Washington.

Senator Bingaman (D-N.M), whose work I greatly admire, has given us a list of the main points of the bill as follows. I, respectfully, leave questions or comments about each main point, which I hope could be answered in the coming days of debates and discussions on the bill:

•” The bill sets up a new Clean Energy Deployment Administration to help finance new breakthrough clean energy and energy efficient technologies such as thin solar films, highly fuel efficient and electric drive vehicles, smart grid technology, advanced batteries and ultra-efficient lighting and appliances.”

Questions: Who will run this? Will it be run by political appointees or scientists, scholars, and business persons who know about these issues? How will it be set up? How will it interact with other agencies and departments? How much clout will it have to get things moving? How will it work with the private sector?

• “It requires utilities to meet 15 percent of their electricity sales through renewable energy and efficiency by 2021.”

Question: Requirements are good sometimes, but what incentives will there be for utilities to reach them? I firmly believe that if you give people the right incentives they can do amazing things – like maybe even go beyond 15%.

• “It improves the planning and siting of new electric transmission lines, and protects our critical electric infrastructure from cyber security threats and vulnerabilities.”

Questions: What are the fine details of this? (The devils and angels are in the details.) Where do litigation limitations fit into this? Where do we get the enormous funds needed to protect, refit, and better manage and develop out electric transmission lines? These are massive investments in a time of stressed out government finances.

• “It takes a major step forward for nationwide use of distributed electricity generation by creating a single, consistent national standard for interconnection of residential-sized distributed generation devices, like rooftop solar arrays.’

Question: This is an excellent idea, but how do we define the standard across states that have different regulations, legal issues, and more? Standardization is a great idea. However, such standardization has to be defined carefully, but with enough wiggle room for the unexpected. I think it is very good that the movers and shakers in the country are finally getting it on how important distributed energy could be.

• “It improves the energy efficiency of our buildings, homes, appliances, factories, and federal facilities.”

Question: This is yet another great idea, but who defines where we go from here? Will there be mandates or incentives? Incentives work better. Who defines and develops these incentives and mandates, and toward what eventual goals that are more defined than just energy efficiency? (And as with the other provisions of the bill is there flexible wording fit in to allow the organic development of these technologies, industries and ideas as things change?)

• “It modernizes the Strategic Petroleum Reserve, creates a new petroleum product reserve to protect our gasoline and diesel supplies from hurricanes and other natural disasters, and opens the eastern Gulf of Mexico, which contains more than 20 trillion cubic feet of natural gas, to exploration and development of those resources.”

Questions: We almost ran out of gas after Hurricane Katrina. One of the main reasons was the interconnection between the running of refineries, the production of electricity, and the running of shipping ports, storage areas, and transport pipelines. How does this bill deal with the systems-within-systems part of energy security? There is more to energy security than just production and storage. Making smart systems-within-systems linkages could be a goal as well. Also, many of our refineries are in known hurricane pathways, and are not far from sea level. What can be done about this? We had alligators swimming in some of the refineries after Katrina.

• “It facilitates the demonstration and deployment of carbon capture and storage technologies.”

Question: What does the bill do to answer the many complex and vexing issues related to the long-term legal implications of carbon capture and storage?

• “It gives the Federal Energy Regulatory Commission new enforcement tools to protect energy markets from manipulation.”

Question: Where do these new enforcement tools fit into the overall interagency framework of energy security policy? I would like to see how manipulation of markets can be clearly separated out from other activities in the markets. Those who manipulate markets for their own gain at the expense of the country should surely be held accountable.

• “It doubles our national investment in energy innovation and technology over the next 4 years, and enhances energy job training and workforce development.”

Question: Is doubling enough? Federal energy R&D has been on a downslide trend for a very long time if we look at it compared to the late 1970s and 1980s. Also, how are incentives to be developed for the private sector to also focus much more R&D on energy efficiency, energy technology, and other energy issues? Incentives are keys to getting things moving on this.

I respectfully submit these comments and questions as a concerned citizen who has been working on energy and environmental issues for well over 2 decades (I also submit them with a certain degree of humility knowing how complex and emotional these issues can be.)

Real leadership is needed on these issues, and the time is now.

(All opinions expressed are those of the author and do not represent those of the National Defense University, Georgetown University or any other entity the author may be associated with.)

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Updated at 10:21 a.m. on June 24.

The National Wildlife Federation can’t support the Senate’s American Clean Energy Leadership Act of 2009 in its present form. While we support the bill’s appliance efficiency and building code provisions, the renewable electricity standard should be amped up to ensure it drives a real and significant expansion of clean, made-in-America renewable energy. In addition, electric transmission reforms should promote renewable energy development and include safeguards to protect our natural resources.

Two provisions should be stripped from the Senate bill entirely. The high-carbon fuels exemption for Canadian tar sands would take us backwards on global warming. And the bill should not overturn the 2006 bipartisan compromise that prohibited oil & gas drilling off Florida’s east coast until 2022.

The Waxman-Markey American Clean Energy & Security Act moving through the House provides much better tools (PDF) answer to our economic, energy and climate crises.

The Senate energy bill is an important piece of legislation with much to commend it. By promoting clean energy, the bill reflects a broad vision of where the country should go in terms of energy supply and use. Just as important, the bill recognizes the barriers to fulfilling that vision and takes action to reduce or remove them.

For example, the bill includes a federal renewable energy standard (RES) intended to promote renewable energy development and diversify our electricity supply. Diversity in our electricity supply represents sound energy policy, and has long been a tenet of U.S. energy policy. The RES also reflects sound environmental policy, given the aggressive carbon reduction goals our country is pursuing through legislation, regulatory action, and international treaties. Indeed, unless we maximize renewable energy development it will be very difficult to achieve major carbon reductions at a reasonable cost.

But the bill does not stop there. It attempts to remove barriers that may make it impossible to achieve the goals of the federal RES. The Senate committee had the wisdom and the honesty to recognize the United States will not achieve its maximum renewable energy potential under current transmission policy. At present the major obstacle to developing renewables is not access to capital markets but the weakness of national transmission policy.

Some of the best sites for wind and solar power generation are within driving distance of urban centers but are poorly interconnected with the interstate power grid. In the case of wind, these sites promise the best quality power at the lowest cost, and yet the grid cannot take the output from large-scale wind projects even once they are interconnected. Unless we make changes to transmission cost allocation and siting, we may be reduced to foregoing development of some of the best renewable energy sites in the country.

There are two principal weaknesses in current transmission policy. First, current cost-allocation policies do not reflect the nature of large scale renewable energy facilities, and actually discriminate against wind energy. The grid is regional, and the market is regional, but current policy assigns too many costs to the renewable energy generator and local transmission owner. The solution is allocating costs across a broad region.

Second, siting of transmission facilities is conducted by state and local governments, not the federal government. The law in this area traces back to 1935, a time when there was no interstate grid and electricity markets were local in nature. The law should acknowledge that the nature of the grid and of electricity markets has changed fundamentally over the past 75 years and transfer responsibility for transmission siting to the federal government.

The Bingaman bill squarely acknowledges the need to change transmission policy and proposes both cost allocation and siting solutions. Neither of these solutions is perfect, and the cost-allocation provisions were substantially weakened during committee markup to the point where it is questionable whether they move in the right direction.

No bill is perfect, of course, and laws are not written by philosopher kings on a mountain top but by practical men and women of good will struggling to find a balance between what will work and what is ideal. The Senate bill reflects that balance.

The Senate bill is important in another respect – it enjoys broad bipartisan support. I commend Chairman Jeff Bingaman (D-N.M.) and Senator Lisa Murkowski (R-Alaska) for working together closely to craft this bill. A hallmark of significant energy laws in the past has been bipartisan support. The bipartisan support for the Senate energy bill means it has a good chance of becoming law.

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The most promising provisions of the Senate energy bill are its energy efficiency requirements, including new building codes and a building retrofit program. While weaker than those included in the House climate bill, these energy efficiency provisions would provide consumers $20 billion in net savings by 2030 and avoid about 133 million metric tons of carbon dioxide emissions in 2020, the equivalent of taking 22 million cars off the road for a year, according to an analysis by the American Council for an Energy-Efficient Economy.

That’s the good news. The bad news is flawed provisions for renewable energy sources, the electric grid, loan guarantees, and nuclear fuel reprocessing would undermine progress toward a clean energy economy.

The bill’s renewable electricity standard provision is especially troubling because it would not require any new renewable energy development beyond business as usual. And if any states adopted the loopholes and exemptions in this bill, it could actually reduce the number of renewable energy projects we would expect under state policies.

A UCS analysis found the bill’s renewable electricity standard would require much less wind, solar, biomass and other renewable energy development than what studies by the federal government and others concluded is achievable and affordable. For example, the Department of Energy projects that current state policies and federal incentives would increase renewable energy to about 10.2 percent of total U.S. electricity generation by 2021. By comparison, under the Senate standard, after factoring in the exemptions, deductions and loopholes, utilities would have to obtain only 7.4 percent to 10.7 percent of their electricity from renewable energy by 2021.

Even worse, the standard includes an “alternative compliance payment” mechanism that would allow utilities to avoid meeting the renewable development requirement by paying a small fee to state governments. Instead of putting that money into renewable development, states could simply return the money to utility customers. States also could use the payments to fund nuclear power plants and coal plants that capture and bury, or “sequester,” their carbon dioxide emissions, a technology that has not as yet been shown to work on a commercial scale.

While we support the concept of a fund, called the Clean Energy Deployment Administration, to provide low cost loans for new energy technologies, the fund has virtually no controls to protect taxpayers from defaulted loans, and would not ensure that the funds underwrite a diverse set of technologies. The entire fund could be invested in new nuclear or coal plants instead of much less expensive, low-carbon alternatives.

The bill’s transmission provision also falls short because it does not prioritize access for new renewable facilities or allocate costs equitably. It would allow new transmission to support new conventional coal plants and could increase carbon pollution from the dirtiest existing coal plants.

Finally, the bill includes language that would require the secretary of energy to accelerate development of nuclear waste reprocessing technologies, an approach the Obama administration has abandoned. The Department of Energy and the National Nuclear Security Administration found that reprocessing increases nuclear waste and the risks of proliferation and terrorism.

In sum, we are urging the Senate to rework this bill significantly so it does what the lawmakers set out to do: create tens of thousands of jobs, save consumers billions of dollars, and address our carbon overload.

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The Senate energy bill that was approved by the Energy and Natural Resources Committee is a step in the right direction. It allows greater access to oil and natural gas leasing in promising areas of the Eastern Gulf of Mexico, which would help the American people by creating new jobs, adding new energy resources, and providing new revenues to federal, state and local governments.

The Eastern Gulf is home to the Destin Dome area, a proven natural gas field, which because it is located near existing pipelines and processing facilities, could allow clean-burning natural gas supplies to be brought to market in relatively short order. The Dome contains at least 2 trillion cubic feet (Tcf) of natural gas--enough to heat 2 million homes for 15 years--while the potential resources in the entire Eastern Gulf of Mexico are estimated at 3.7 billion barrels of oil and 21.5 Tcf of natural gas.

While the bill acknowledges the importance of producing more of America's own resources to improve U.S. energy security, it does not contain a provision ensuring that coastal states receive a portion of the revenues associated with the development of oil and natural gas off their shores. Providing revenue sharing would give the states an incentive to participate in energy development and help them address any budgetary challenges they might be facing during the economic downturn.

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The American Clean Energy Leadership Act of 2009, passed by the Senate Energy and Natural Resources Committee earlier this week, is truly an expansive energy bill. Getting America running on clean energy is one of its central goals. It will help shift our country to cleaner sources of energy, and more secure sources as well.

The Senate Energy Committee worked for 12 weeks to fashion a set of bipartisan, substantive and forward-looking provisions on a wide range of energy policy questions, with the aim of moving America toward both the clean jobs and economic growth our country needs. The Committee’s development of the bill involved 20 hearings, 11 markups, and the consideration of more than 200 amendments.

One of the questions asked is whether Senators can reach a middle ground on the many controversial issues that energy policy entails. The end product of the Committee’s deliberations shows that this can be done; even if any given individual Senator or outside group might take issue with some part of the bill. That’s inherent in all legislation that truly aims to get broad support.

In the case of this bill, the following list of key provisions shows that the Committee has forged a consensus that is a solid step forward. Even if each reader of this blog might not agree with every item on the list, I think that most would agree that, taken as a whole, the bill will help us both to produce new sources of energy from a wide range of low-carbon sources, and also to use our energy sources wisely and more efficiently.

• The bill sets up a new Clean Energy Deployment Administration to help finance new breakthrough clean energy and energy efficient technologies such as thin solar films, highly fuel efficient and electric drive vehicles, smart grid technology, advanced batteries and ultra-efficient lighting and appliances;

• It requires utilities to meet 15 percent of their electricity sales through renewable energy and efficiency by 2021;

• It improves the planning and siting of new electric transmission lines, and protects our critical electric infrastructure from cyber security threats and vulnerabilities;

• It takes a major step forward for nationwide use of distributed electricity generation by creating a single, consistent national standard for interconnection of residential-sized distributed generation devices, like rooftop solar arrays;

• It improves the energy efficiency of our buildings, homes, appliances, factories, and federal facilities;

• It modernizes the Strategic Petroleum Reserve, creates a new petroleum product reserve to protect our gasoline and diesel supplies from hurricanes and other natural disasters, and opens the eastern Gulf of Mexico, which contains more than 20 trillion cubic feet of natural gas, to exploration and development of those resources;

• It facilitates the demonstration and deployment of carbon capture and storage technologies;

• It gives the Federal Energy Regulatory Commission new enforcement tools to protect energy markets from manipulation; and

• It doubles our national investment in energy innovation and technology over the next 4 years, and enhances energy job training and workforce development.

The full Senate will eventually have an opportunity to consider this bill and to make further improvements to it. How that occurs will be up to the Majority Leader of the Senate, Senator Reid. When the Senate does take up this legislation, I hope to help strengthen a number of its provisions. In a year in which the Senate has had some difficulty in getting to bills and effectively legislating on them, I hope that the bipartisan and collegial manner in which this bill was developed will allow it to be considered on its merits.

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Pop quiz on the energy legislation reported out of the Senate Energy and Natural Resources Committee last week.

Question:

Which provision garners BIPARTISAN and NATIONWIDE support (over 75% of all registered voters including 71% of independents, 62% of Republicans, and over 71% of voters in the South)?

Hint:

This policy is a job creation policy, a trade policy, an energy security policy and a carbon avoidance policy all in one.

It will spur investment in manufacturing facilities in the U.S. The jobs it will create are manufacturing and service jobs like the following:

• Bob Drake
• Metalworker at Cardinal Fastener (nuts & bolts), Bedford Heights, Ohio
• Bob Drake used to work at a fastener supplier for the automotive industry. After being laid off, he found a job using his skills at Cardinal Fastener.

• Tim Eraker
• Production Supervisor, DMI Industries (Otter Tail Corp.), Tulsa, Oklahoma
• Tim Eraker started working for DMI in 2005 after returning from deployment in Iraq. He is the Production Supervisor for three departments: plate processing and receiving; section shipping yard; and interior section movement. “I think that the people working for DMI Industries and Otter Tail Corporation can take even greater pride in knowing that they not only work for a company that cares about the environment, but a company that produces a product that is part of the solution to the energy crisis,” says Eraker.

• Alan Toney
• Production engineer, PPG Industries (fiber glass manufacturing plant), Shelby, North Carolina
• “In contrast to the jobs that I have held in textiles, I feel that I have a brighter future at PPG. We are able to see the demand for our products grow in the markets we serve. This is quite a contrast to my former job in textiles, where I was closing plants and seeing people lose their jobs,” says Toney.

• Dee Blackwell
• Lead Dispatcher, Landstar Ranger Trucking (logistics support), Mobile, Alabama
• “After hearing news reports from T. Boone Pickens, I decided that wind energy was a growing part of the energy sector that also could provide energy independence and a cleaner environment. I [now] dispatch truckloads of wind components for truck drivers and this work has made it possible for me to move into my own home,” says Blackwell.

Answer:

This policy is the Renewable Electricity Standard (RES). The jobs described above are among the 85,000 that currently exist in the U.S. wind power supply chain, manufacturing some of the 8,000 components that go into a modern wind turbine, transporting wind turbine parts, and otherwise servicing the industry.

The good news is that a national RES is included in the bill. However, the current RES provision has been weakened to the point that it will not drive new renewable energy deployment for several years to come. The wind energy industry is grateful for Chairman Bingaman’s work and the commitment of other Senators on the committee in protecting the RES from being weakened even further, and looks forward to working with Chairman Bingaman and other supporters to strengthen the RES. A strong RES will seize the historic opportunity we have today to build up our nation’s renewable energy industry, and keep jobs and investment right here in the U.S., in line with the desire of the majority of Americans.

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When it comes to energy policy in the United States, we’re still stuck on the dirty technologies of the past that sap our economy, threaten our national security and pollute our air, land and water. The good news is we have solutions at our fingertips. With a high performance homes and building technologies we have the technology to dramatically reduce energy used to heat, cool and light our lives. With more efficient cars and a 21st Century transportation system we can slash our dependence on oil. Finally, we have the potential to power the entire country with wind and solar power.

Despite worthy national efficiency targets set for residential and commercial buildings and improve appliance standards, the rest of the bill passed by the Senate last week does not do enough to embrace clean technologies and has several policies which could keep us stuck on the mistakes of the past. In particular, the bill does little or nothing to spur renewable energy in this country. The proposal risks sensitive coastal ecosystems to pollution and spills from off-shore drilling, while opening the door to high-carbon fuels such as tar sands, and could encourage taxpayer subsidies of dirty, expensive nuclear power plants and nuclear waste reprocessing. .

First, when it comes to clean renewable energy such as wind and solar, the bill fails to capture the momentum created by 28 states with renewable electricity standards and the incentives in the economic recovery package signed by President Obama earlier this year. The bill would require large electric utilities to achieve 15 percent of their sales by 2020 from a combination of “renewable” energy generation and energy efficiency improvements. States could allow their utilities to meet up to 27 percent of the total standard each year with energy efficiency (i.e., 4 percent of sales in 2020.) Considering that all but the largest utilities are exempt from the standard, the Union of Concerned Scientists estimates that the renewable electricity standard would require less renewable energy than the 9.9 percent renewables the Department of Energy projects the nation will already achieve under policies already in place.

Environment America supports a 25 percent by 2025 renewable standard that according to another analysis by the Union of Concerned Scientists would generate 300,000 new clean energy jobs and consumer savings of nearly $65 billion in lower electricity and natural gas bills by 2025.

However, the bill doesn’t just fall short when it comes to renewable energy, it takes us in the wrong direction by opening up Florida’s coast to oil drilling as close as 10 miles from the shore. Despite the risk of oil spills and pollution and the potential enormous impact on Florida’s vibrant tourist economy, this bill would open tens of millions of acres of pristine Gulf waters to dirty and dangerous drilling operations and does nothing to reduce our dependence on oil. The bill also weakens Section 526 of the Energy Independence and Security Act of 2007 which could allow federal agencies to purchase high-carbon fuels such as Canadian tar sands.

Finally, several provisions in the bill, including the 21st Century Energy Technology Deployment Act provisions would encourage taxpayer subsidies of dirty, expensive nuclear power plants and nuclear waste reprocessing.

There’s still time to deliver on the promise of a clean energy future. This bill must be dramatically improved before it is passed by the Senate by: increasing the renewable electricity standards, stripping the wrong-headed drilling and dirty fuels provisions and further encouraging the cleanest energy technologies by strengthening incentives in the bill for loan guarantees and building codes.

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