"Energy and Global Warming News for October 28: Solar industry takes on coal and oil lobby; White House continues to step up climate efforts"
A solar industry leader smacked down the oil and coal industries on Tuesday, calling for renewable energy proponents to open their wallets to level the playing field in Washington.
“The full promise of solar power is being restrained by the tyranny of policies that protect our competitors, subsidize wealthy polluters and disadvantage green entrepreneurs,” said Rhone Resch, chief executive of the Solar Energy Industries Association, according to prepared remarks for a speech he is to give at the opening of the Solar Power International conference.
The event, being held in Anaheim, Calif., is the solar industry’s biggest annual get-together in the United States, and is usually a celebration of the industry’s breakneck growth of recent years.
But Mr. Resch said that with the fossil fuel industry devoting tens of millions of dollars to defeat climate change legislation now before Congress, the solar industry needs to start throwing its weight around Washington.
“How our country proceeds on climate change will permanently shape the market for solar,” he said in his remarks.
Oil and coal interests “are spending millions of dollars on lobbying, P.R. and advertising, and much of it is financing a deliberate effort to discredit our industry,” Mr. Resch added. “At the end of the day in Washington, good intentions won’t stand a chance against millions of dollars and intense political pressure. We have relied on good will long enough, and if that’s the only arrow in our quiver, we will lose.”
Actually, the solar industry is coming off quite a successful year in Washington, winning a slew of tax breaks, incentives and loan guarantees for solar energy development.
But Mr. Resch said fossil fuel industries received $72 billion in federal subsidies between 2002 and 2008 while the solar industry scored less than $1 billion. “Taxpayers are forced to subsidize companies like ExxonMobil, companies that are the richest in the history of the world,” he said.
His solution: Start playing the influence game, raising big money for politicians and mobilizing constituents to pressure Congress to support the solar agenda. “In 2008, the oil industry contributed $22 million to political candidates, the utility industry $21 million,” said Mr. Resch. “The solar industry: $138,000. We cannot compete with the entrenched energy interests unless we step up our game.”
In an interview Monday evening, Mr. Resch said the new aggressiveness reflects the solar industry’s continued growth, even in a deep recession. He noted that attendance at the Solar Power International conference has doubled since 2007, with 25,000 people expected in Anaheim this week.
“We need to take a different role in our advocacy, in our relationships in Washington and our ability to influence directions that affect the outcome of our economy,” he said.
The Obama administration and some Senate Democrats expressed fresh urgency on Tuesday about the need to address climate change and refashion the nation’s energy economy.
But they faced determined opposition from Republicans, new concerns from some Democrats and reminders of the financial, technological and political hurdles in remaking the way the nation produces and consumes power.
In a Senate hearing on a new climate change and energy bill and in coordinated appearances by President Obama and Vice President Joseph R. Biden Jr., the administration promoted measures to cap greenhouse gas emissions and support new means of fueling homes and vehicles with far less carbon dioxide intensity. Mr. Obama appeared at a solar energy installation in Florida and Mr. Biden at an auto plant in Delaware that will produce electric vehicles, talking about the potential of alternative energy to create jobs.
On Capitol Hill, five senior administration officials appeared before the Senate Environment and Public Works Committee to speak in support of a bill to address global warming and encourage development of nonpolluting energy sources. They said such measures were important not only to the environment but to the nation’s economic competitiveness.
“When the starting gun sounded on the clean energy race, the United States stumbled,” Energy Secretary Steven Chu told the Senate panel, saying that spending on green energy technology in China and several European nations was far outstripping that of the United States. “But I remain confident that we can make up the ground.”
He added, “When we gear up our research and production of clean energy technologies, we can still surpass any other country.”
The climate change measure, sponsored by Senators John Kerry of Massachusetts and Barbara Boxer of California, both Democrats, aims to cap emissions of the gases linked to the warming of the planet by setting up a program under which industries can buy and sell emissions permits.
The measure also provides a variety of incentives for new energy technology, including billions of dollars in subsidies for research on capturing and storing carbon dioxide emissions from power plants.
House and Senate conferees yesterday approved a $10.3 billion spending plan to fund U.S. EPA for fiscal 2010, a 36 percent boost over last year’s levels.
Included in the conference report are significant boosts over fiscal 2009 for EPA programs to address climate change, drinking water and Great Lakes restoration.
The package also includes controversial measures that stalled negotiations over the spending bill, including two measures to limit EPA’s regulatory authority over air emissions and another to impose wage requirements on federally funded water infrastructure projects.
The rider from House Appropriations Chairman David Obey (D-Wis.) would exempt 13 steamships that operate on the Great Lakes from pending EPA regulations that set limits on the sulfur content of fuel used in internal U.S. waters and along U.S. coastlines. It would also allow EPA to extend waivers to certain ships if their operators show that they would otherwise go out of business, Obey said.
Obey’s rider has drawn the ire of environmental groups and air regulators, who have cautioned that such a measure could disrupt pending international negotiations over shipping emissions.
“It’s not something I necessarily desire,” said Sen. Dianne Feinstein (D-Calif.), chairwoman of the Senate Interior Appropriations Subcommittee. But she insisted that the negotiated language was carefully tailored to affect only a limited number of ships. Feinstein said she had also been contacted by Michigan Democratic Sens. Debbie Stabenow and Carl Levin, who supported the measure.
Rep. Jerry Lewis (R-Calif.), ranking member of the House Appropriations Committee, said the amendment raises serious questions. Large ships are responsible for a very high level of sulfur pollution, Lewis said, and “the language could disallow us to effectively deal with those problems, not just around the Great Lakes, but around our country and dealing with foreign-flagged ships as well.”
Obey defended the amendment, saying he takes “a back seat to no one” when it comes to protecting the Great Lakes and all other environmental areas. “But the fact is that the EPA proposed regulation with respect to steamships has one inconvenient problem — it would require steamships to use fuel which if they did use, would blow up the boilers. That could be a bit of a problem on Lake Superior or Lake Michigan.”
Without this action, he said, the EPA regulations would put the Great Lakes states at an economic disadvantage.
The final conference report also includes an amendment from the House-passed bill to exempt manure management systems at factory farms for one year from an EPA rule requiring greenhouse gas emissions reporting. The amendment from Rep. Tom Latham (R-Iowa) was included in the House-passed bill but had been removed from the conference report. The measure was later reinserted.
EPA finalized a rule last month to require about 10,000 facilities to begin to collect emissions data. The only agricultural sources that are required to report their emissions are manure management systems at livestock operations where greenhouse gas emissions meet or exceed the 25,000-ton limit. About 100 livestock operations meet that threshold, according to the agency.
U.S. EPA is working on a new strategy aimed at providing a clearer road map for industrial investment in air pollution controls, the agency’s top air official said yesterday.
EPA’s air chief, Gina McCarthy, said she wants to implement a more industry-friendly approach to rulemaking that will allow companies to invest in controls that curb multiple pollutants at once rather than using a more expensive piecemeal strategy.
The agency is poised to issue a slew of new air pollution rules — some are Bush-era rules that were tossed out in courts; others are new climate initiatives that the Obama administration has taken on. And McCarthy wants to coordinate those rules under what she calls a “multipollutant” or “sector-based” strategy.
“We need to look at it all and strategically make sure that the driving investments — particularly in the utility sector — don’t just look at the next challenge, but they paint the picture of all the challenges ahead and what we need to do moving forward,” McCarthy said yesterday at an air quality conference hosted by the Energy & Environmental Research Center.
Some initiatives McCarthy said she hopes to coordinate are the upcoming replacements for the Bush-era programs to curb mercury and soot- and smog-forming pollutants from power plants.
EPA is under a court deadline to issue a final rule requiring strict maximum achievable control technology, or MACT, for power plants by November 2011. Environmentalists have pressed the agency to issue the new rule since a federal appeals court last year tossed out the Bush administration’s Clean Air Mercury Rule, an effort to regulate mercury under a cap-and-trade program.
Also under way is an overhaul of the Clean Air Interstate Rule, another George W. Bush administration program designed to curb soot-forming sulfur dioxide and smog-forming nitrogen dioxide in 28 Eastern states and the District of Columbia. The U.S. Circuit Court of Appeals for the District of Columbia has temporarily reinstated the rule after initially tossing it out in July 2008. McCarthy said in July that the agency plans to propose a CAIR replacement in early 2010 and to issue a final rule by early 2011.
EPA will also review by 2011 the national air quality standards for all six of the “criteria” pollutants subject to EPA regulation, McCarthy said. Some of those reviews are aimed at revising rules set under the Bush administration, including the national limits for particulate matter and ozone.
McCarthy said she hopes to coordinate all those activities to tell each sector what it needs to do to make progress on clean air as a whole, not just on individual pollutants.
“The last thing that we want to do is figure out all the technology challenges and all of the reliability concerns associated with the utility MACT rule and fail to look at the CAIR rule moving forward, fail to look at the changes in criteria pollutant standards and regulations as we move forward,” she said. “We need to look at it all, and we need to look at it comprehensively.”
A possible nuclear energy title in the climate bill with strong financial and regulatory incentives has been touted as one of the top negotiable items to obtain the necessary 60-votes needed to pass the Senate climate legislation.
But how much would strong incentives for nuclear power help spur U.S. industry and quicken the pace of a “nuclear renaissance”?
There are currently 17 applications for 26 reactors before the Nuclear Regulatory Commission, for which the expected review time is about four years and construction time an additional four to five years. Furthermore, the industry faces several significant hurdles including a bottleneck in the global supply chain for nuclear components — some of which have only one manufacturing facility, a looming shortage of qualified workers and a recalcitrant Wall Street that is hesitant to invest in projects, even with loan guarantees from the U.S. government.
“If someone were to waive a magic wand and give loan guarantees to every single plant, you still wouldn’t expect anywhere near all of them to be built all at once,” said an industry source.
“There are real constraints on the supply chain and there is a real sense of caution in the industry and especially on Wall Street as to when and for what price new nuclear plants can be built here,” the source added.
The Nuclear Energy Institute yesterday unveiled legislative priorities it says are necessary to build 45 reactors by 2030. NEI wants $100 billion in additional loan guarantees for clean energy technology, additional production and manufacturing tax incentives, improving regulation review efficiency and increased funding for nuclear technology research and development.
“What we are trying to do is optimize the opportunity for building new nuclear plants,” said Alex Flint, NEI’s senior vice president for governmental affairs. “What needs to be put in place is a regulatory and financial framework for new plant construction” so companies and investors can move forward, Flint said.
The NEI proposal echoes nuclear energy language and provisions laid out over the past year by several key moderate Republicans — including Sens. Lindsey Graham of South Carolina, Lisa Murkowski of Alaska and John McCain of Arizona — for whom a “robust” nuclear title is necessary, if not sufficient, to vote for a climate bill.
“The only way we get there … is if we really ramp up nuclear,” Murkowski said in a C-SPAN interview last week.
Graham recently reinvigorated negotiations between Republicans and Democrats over cap-and-trade legislation with a commitment to work with Sen. John Kerry (D-Mass.) to include robust nuclear and domestic oil and gas drilling titles in the bill.
Hong Kong or Beijing may become the hub for carbon trading in the Asia-Pacific region within the next three years, with Australia needing to pass climate change laws to be a potential contender.
“I think in another two or three years we will see either Hong Kong or Beijing as the hub,” John Marlow, London-based global head of environmental financial products for Macquarie Bank, told the CarbonExpo Australasia conference on Queensland state’s Gold Coast today. Australian states are competing against each other to be the hub, rather than working together, he said.
Governments from around the world will meet in Copenhagen starting Dec. 7 for the final round of talks on a climate accord to replace the 1997 Kyoto Protocol, which expires in 2012. The negotiations are being run by the UN Framework Convention on Climate Change. Australia’s houses of parliament are expected to vote on domestic carbon legislation by the end of November.
“I think if Australia really wants to be a leader or a hub, then it better get its act together and do something quickly, including passing” the climate change bill, Geoff Sinclair, London-based global head of carbon sales and trading for Standard Bank, said today. Singapore and Hong Kong are working aggressively to become the regional center, he said.
China already has several carbon trading exchanges which have started up, said Mina Guli, Beijing-based vice chairman of Peony Capital. There is involvement from the U.S. to help them grow and expand, she said.
“I think you will see China become increasingly involved in this space,” Guli said.
Commerce Secretary Gary Locke will press for more access for American companies in China’s clean energy sector, an area where Washington feels it can make inroads on its enormous trade imbalance with China.
China’s ambitious wind power plans, as well as national policies to reduce emissions and use water and fuel more efficiently, create a potential market for U.S. firms who have developed those technologies, Locke said in Hangzhou before the annual Joint Commission on Commerce and Trade (JCCT) meeting.
China’s overcapacity in some sectors, including solar panels, drive low-cost exports that have created friction with trading partners, while Western firms have complained they are cut out of China’s most lucrative domestic projects.
“These are the issues we’ve been raising in a number of discussions that are part of the JCCT. Our objective is to allow American companies to compete,” Locke told reporters, in response to a question about market access for U.S. firms.
“We recognize that the Chinese companies also have much to offer the United States, and we seek a level playing field for both sides,” he said.
Ahead of the JCCT, U.S. industrial services company Harsco Corp. inked a joint venture on Wednesday with Zhejiang Construction Group, one of China’s 10 largest construction firms.
“Chinese companies are becoming more aware of the need for efficiency,” said Harsco president Geoff Butler, adding his company uses less equipment and labor, reuses materials more and brings greater safety to the construction process.
Locke’s visit is overshadowed by a number of trade disputes, including recent U.S. decisions to enact duties on Chinese products that U.S. industry says are flooding U.S. markets.
The U.S. Commerce Department on Tuesday set preliminary duties on imports of steel grating and concrete steel wire strand, citing Chinese government subsidies. A final determination on the duties is due in January.
The Obama administration in September imposed safeguard duties on imports from China for the first time, with duties on tires that Chinese officials warned would reduce their willingness to make concessions at this week’s JCCT meeting.