Climate and energy news for February 11, 2011: GOP proposes cutting EPA budget $1.6 billion, slashing solar and wind funding, while defending $4 Billion in oil subsidies

GOP Proposes $1.6 Billion Cut to EPA Budget, Defends $4 Billion in Oil Subsidies

Republicans unveiled a budget plan on Wednesday that proposed a $1.6 billion cut [1] to the Environmental Protection Agency, an agency whose authority they have sought to curtail, while business trade groups [2] have complained about the burden placed on them by agency regulations. Politico also reported that the GOP’s proposal would hit the Energy Department hard [3], with a proposal to cut energy efficiency and renewable energy programs in half.

Rep. Fred Upton, chairman of the House Energy and Commerce Committee, has said he favors gutting EPA’s authority to regulate greenhouse gas emissions with a “legislative fix” rather than simply denying it funds. (See our overview [4] of Upton’s positions on energy.) He told the Wall Street Journal that his disagreement with the EPA is: “You don’t subsidize different forms of power [5] — you let the market run on its own.”

Energy subsidies are not a new thing, and efforts to remove them for oil and gas companies have repeatedly failed in recent years.


This week, when Senate Democrats wrote a letter challenging GOP lawmakers to end to tax subsidies for oil and gas companies [6]””an agenda item that President Obama also referenced in his State of the Union speech””Republicans balked and equated ending those subsidies with raising taxes, which would “destroy American jobs.” [7]

Oil companies are subsidized by approximately $4 billion each year through deductions and loopholes in the corporate tax code. The New York Times reported last year that tax breaks are “available at virtually every stage [8] of the exploration and extraction process,” citing BP and the ill-fated Deepwater Horizon [9] rig as one example:

BP was reaping sizable tax benefits from leasing the rig. According to a letter sent in June to the Senate Finance Committee, the company used a tax break for the oil industry to write off 70 percent of the rent for Deepwater Horizon “” a deduction of more than $225,000 a day since the lease began.

GOP proposed cuts hit renewables, protect fossils

Proposals from Republican lawmakers could limit funding for clean energy projects while protecting the profits of fossil fuel companies, an analyst said.

Republicans have proposed cutting $1.4 billion from a Department of Energy loan guarantee program that supports renewable energy projects such as wind farms, solar installations and nuclear plants, FBR Capital Markets analyst Benjamin Salisbury said in a research note Thursday.

The nation’s mounting budget deficit also will make it tough for President Barack Obama to increase incentives for electric- and natural gas-powered vehicles, Salisbury said.

But tax breaks for the oil industry appear secure, despite Obama’s expected proposal to cut them, Salisbury said. Obama previously has proposed ending the tax breaks to pay for clean-energy programs. Salisbury said the idea will not withstand opposition from Republicans and Democrats from oil-rich states.

Meanwhile, Republicans proposed cutting billions from the budget of the Environmental Protection Agency. That’s seen as helping oil and coal companies, since the EPA administers the Clean Water Act, Clean Air Act and other laws regulating the extraction and burning of fossil fuels.

Republicans also want to eliminate the EPA’s new authority to regulate greenhouse gasses “” currently one of the gravest threats to companies that extract fossil fuels and burn them to generate power.

Seeking to fulfill campaign promises by conservative members, Republicans proposed Wednesday to save $35 billion by eliminating at least 60 federal programs and cutting back hundreds of others. The plan targets education and the environment, food safety and law enforcement. It calls for eliminating a high-speed rail program the administration has ticketed for a multibillion-dollar expansion and recommends ending federal support for the Corporation for Public Broadcasting, family planning services and AmeriCorps.

Republicans Launch Assaults on Obama Administration’s Climate and Clean Energy Programs

At a sprawling, daylong hearing punctuated by pictures of Arctic ice caps and coal miners, a House Energy and Commerce panel set the tone for what could be a months-long GOP war on the Obama Administration’s climate and clean energy programs, beginning with U.S. EPA’s plans to regulate greenhouse gas emissions.

Meanwhile, Republicans on the House Appropriations Committee took what its chairman called a “wire brush “ to the budget, proposing the removal of $58 billion in non-security discretionary budget funds relative to the fiscal 2011 White House request, including cuts to climate- and energy-related budgets at EPA, the Department of Energy, the National Oceanic and Atmospheric Administration and other agencies.

The Energy Department responded in a statement yesterday. “This Administration strongly agrees that we have to make tough choices to bring down the deficit and get the country back on a sustainable path,” the statement said, citing President Obama’s proposal for a $400 million, five-year spending freeze in non-security discretionary spending.

Tea Party’s Congressional Allies Diverge on How to Gut EPA

Buoyed by big victories, including the recent extension of George W. Bush-era tax cuts and President Obama’s call for a cut in corporate taxes, tea party leaders are still working to align their ambitious rhetoric with direct actions to rein in U.S. EPA.

The conservative movement has lined up behind one argument about the agency: Its regulatory reach under Obama threatens the economy and robs Congress of its rightful oversight and lawmaking powers. However, tea party favorites on and off Capitol Hill have taken different approaches to EPA’s future in recent weeks, from bills that would specifically revoke its power over greenhouse gas emissions to a call by former House Speaker Newt Gingrich (R-Ga.) to shutter the agency and replace it with a business-friendly “Environmental Solutions Agency.”

Rep. Michele Bachmann (R-Minn.) was one of several conservative stalwarts who took aim at EPA during a Tuesday town hall sponsored by the Tea Party Express, using it to demonstrate the overreach of the federal government.

After Bachmann told supporters that EPA emissions rules represent the president’s push to implement a cap-and-trade system for greenhouse gases even after it did not pass in Congress, she asked: “Is that what the American people want?” The audience responded with a resounding “no.”

Newt Gingrich calls for replacing the EPA

Former House speaker Newt Gingrich called for replacing the Environmental Protection Agency with an “environmental solutions agency” as part of a broader re-assessment of American energy policy in his address to the Conservative Political Action Conference today in Washington.

“It’s time we passed an aggressively pro-American energy policy,” said Gingrich to a crowded room of conservative activists who greeted his proposals warmly if not with great fervor. “What you have from Obama Administration is a war against American energy.”

Gingrich proposed eliminating the EPA, which he described as “top down” and “bureaucratic.” He also advocated what he argued was a centrist agenda that includes things like the repeal of President Obama’s health care, repeal of the estate tax and a “10th amendment implementation act”.

Gingrich, the former speaker of the House who is widely considered to be a candidate for president, was in classic form — delivering what felt at times like a college lecture weaving together topics as seemingly disparate as the German purchase of the New York Stock Exchange and flexfuel vehicles in Brazil.

Gingrich also dropped a handful of the rhetorical bombs for which he has long been known.

On New York City Mayor Michael Bloomberg’s reaction to the attempted Times Square bombing, Gingrich said: “This would be a psychological problem if it were not a public official.”

Gingrich also jabbed President Obama several times during his speech. “Barack Obama is no Ronald Reagan,” Gingrich said to huge applause in the room; later he joked that Obama’s message on tort reform was clouded because “the TelePrompter wasn’t working at that moment.”

Business Targets Environment, Energy Regulations

Business association leaders and company owners singled out environmental, energy and labor regulations in testimony on impediments to job growth before the U.S. House Committee on Oversight and Government Reform.

The hearing, California Representative Darrell Issa’s second as the chairman of Congress’s chief oversight committee, is part of a broader push by House Republicans to make regulatory overhaul a centerpiece of their party’s job-creation plan.

The Republicans are offering a House resolution today that instructs 11 of the chamber’s committees to compile a list of regulations that should be targeted.

“It is not my intention to do away” with government regulations, Issa said at today’s hearing. “Government must and can provide opportunity, not smother it.”

ConocoPhillips and Boeing Co. were among 201 companies and trade groups that responded to Issa’s request to identify government rules they find onerous. Of the 111 regulations cited, 57 were issued by the Environmental Protection Agency.

Issa’s effort was met with skepticism by Democrats on his panel, who said the witness list excluded consumer groups and labor unions that could explain how regulations, particularly those governed by the EPA, protect Americans’ health and safety.

Representative Elijah Cummings of Maryland, the committee’s ranking Democrat, said Issa’s approach falls short of a full examination of the costs and benefits of regulation.

Climate: A New Study Finds That Global Warming Could Dry Out the Southwest

It’s not the heat that might get us with climate change””it’s the humidity, so to speak. The risk of sea level rise due to melting land ice is one of the most recognized””if controversial and hard to predict””threats posed by global warming. Other potential impacts from global warming include increasingly powerful storms and floods of the sort that have ravaged Australia this past month and a half (while recognizing scientists can’t yet fingerprint individual weather events as caused by warming).

But as climate change create havoc from too much water, parts of the world could end up suffering from too little water. That’s the conclusion of a new study released today by the Stockholm Environment Institute (SEI), an environmental research organization based, unsurprisingly, in Stockholm (Download a PDF of the report here.) The report found that the already dry states of the American Southwest””Arizona, California, Nevada, New Mexico and Utah””will face a major water shortfall over the next century just based on population and income growth alone. (The region has long been one of the fastest-growing in the U.S., in part because of the hot and dry weather.) But climate change could make the situation much, much worse. According to the SEI study, global warming could increase the long-term water shortfall by a quarter, adding an additional 282 million to 439 million acre feet of water to the 1.815 billion acre feet shortfall already expected. Based on the price of adding reservoir capacity in California, meeting the baseline water shortage could cost $2.3 trillion””yes, that’s “trillion” with a “t”””plus $353 billion to $549 billion if climate change is factored in. Higher water prices would make adaptation even more expensive””assuming additional water could be found at all in a drier future. As Frank Ackerman, the director of the Climate Economics Group at SEI-U.S. and a co-author of the study, said in a statement:

Climate change is affecting Americans in many areas; the water crisis in the Southwest is one of the clearest examples. Climate policy choices we make today are not just about exotic environments and far-future generations — they will help determine how easy or hard it is to create a sustainable water system in the most arid region of the country.

USDA Forest Rule Aimed at Climate Change, Jobs

The U.S. Department of Agriculture today released a final proposed rule to protect national forests from threats including climate change, while promoting job growth in rural areas.

The planning rule aims to increase protection for the 193 million acres (78 million hectares) of forests and grassland supervised by the U.S. Forest Service, the USDA said in a statement. The government will also require that the best available scientific data be used in making plans for land and water resources. Local information would also have to be taken into account.

The rule “will provide the tools to the Forest Service to make our forests more resilient to many threats, including pests, catastrophic fire and climate change,” Agriculture Secretary Tom Vilsack told reporters on a conference call.

While the USDA looks to seek further protection for plants and animals, Vilsack said the rule does not favor any one special interest. He said the “full suite” of multiple uses would be considered, including grazing, timber, energy and mineral interests.

The plan is open for public comment until May 16. The Forest Service is an agency of the USDA.

Bart Semcer, the senior representative of the Sierra Club in Washington, said the rule appears to be a “step in the right direction.”

“We’re pleased to see that are taking a look at climate change,” Semcer said in a telephone interview. “We’re looking forward to working with the agency to make the rule as strong as possible.”

US funds give lift to Mass. clean tech

More than a year ago, the Department of Energy began spreading millions of dollars to promising alternative energy companies across the country, with the idea they would use that support to help attract private capital. Six firms have done it best, according to Energy Secretary Steven Chu, and five are from Massachusetts.

The recognition, federal and state officials said, is proof of the strength of Massachusetts’ clean energy sector because investors wouldn’t risk their money unless they believed in the future of the companies and the industry.

Nearly $20 million in federal funds went to these local companies, which then raised nearly five times as much “” $95 million “” from private investors. The money has helped create several dozen jobs, expand offices, and lay the groundwork for new manufacturing as the companies begin testing technologies on ever-larger scales.

“Massachusetts has a strong ecosystem of [research and development] and technology, so it’s congratulations to Massachusetts,’’ said Arun Majumdar, director of the energy department’s Advanced Research Projects Agency-Energy, which distributed the funding.

So far, $363 million has been handed out to 121 projects nationwide.

Toward a clean energy future

A Republican House raises the odds that the rest of President Barack Obama’s term could be deadlocked. But one issue could develop into a bipartisan success: energy reform “” which could be a victory for national security, public health and new job possibilities for all Americans.Despite all the rhetoric in recent years, little has been done to address the nation’s energy problems. To get oil, we still send hundreds of billions of dollars of U.S. wealth annually to nations that are not friendly toward us.

The U.S. is also rapidly falling behind “” if not dropping out of “” the race to develop and deploy newer, cleaner and more efficient power plants. China is becoming the leader in cutting-edge, job-producing energy technologies.

The path to sustained energy security, economic prosperity and public health means shifting from outdated fossil-fuel-fired power plants to cleaner, more efficient energy sources that position the U.S. to compete in a global economy. For this, we need a bridge to a future where our nation’s energy needs are supplied by a mix of lower-emission resources, like cars and trucks powered by clean alternative fuels, including electrification. That affordable bridge is natural gas.