National Outlook for Comprehensive Energy Reform and Climate Change

Transcription

1 National Outlook for Comprehensive Energy Reform and Climate Change Andrew Wheeler Senior Vice President Energy and Climate Change Team

2 B&D Consulting Andrew Wheeler is a Senior Vice President in the Energy & Climate Change practice group at B&D Consulting. B&D Consulting is a national advisory and advocacy firm headquartered in Washington, D.C. Strategic focus on energy, climate-change and public sector policy Expertise in government affairs, strategic communications and public policy development 15 consultants in D.C. dedicated to energy, climate change and public works issues B&D Consulting is a division of Baker & Daniels, LLP, with offices in Indiana, Chicago, Brazil and China Broad reach within the Firm for legal services

3 House Energy & Climate Change Bill The American Clean Energy and Security Act of 2009 (ACES) was passed out of the House with 8 Republican votes and 44 Democrat dissenters on June 26, Renewable Electricity Standard Clean Energy Investments and Loan Guarantee Reform By 2025, the bill would direct an estimated total of $190 billion to energy technologies and efficiency measures: $90 billion to energy-efficiency and renewable-energy technologies $60 billion to carbon-capture-and-sequestration technology $20 billion to electric vehicles and other advanced automotive technologies $20 billion for basic scientific research and development Modernizing the Grid Energy Efficiency Standards Consumer Protection Provisions

4 Climate Change Provisions of Allowances Waxman-Markey Electric Utilities: They receive percent of the emission allowances in 2012 and The free allowances fall to percent in 2014 and 2015, and 35 percent from 2016 through Beginning in 2026, the freely distributed allowances fall by 7 percent per year, until they reach zero by Energy Sectors: The natural gas industry receives 9 percent of the allowances beginning in 2016, until they are reduced by 1.8 percent per year beginning in The handouts reach zero in For home heating oil and propane consumers, only 1.88 percent of the allowances are given in years 2012 and This decreases to 1.67 percent for the next two years, and to 1.5 percent from 2016 through After this they are phased out by 0.3 percent each year. Oil refiners receive 2 percent of the allowances from 2014 through On top of this, small business refineries will receive 0.25 percent from 2014 to Energy-intensive and "trade-exposed" industries: They receive 2% the first two years, then receive 15% starting in 2014 which phases out by 2035 Clean Tech and Renewable Energy Investment: 10.05% are set aside beginning immediately in The free allowances fall to 7.05 percent for 2016 and 2017, 6.03 percent for 2018 to 2021, 1.53 percent for 2022 to 2025, rises back to 8.58 percent from 2026 to 2029, and remains at 5.03 percent thereafter. The auto industry receives 3 percent of the allowances from 2012 to 2017, and 1 percent from 2018 to 2025

5 Senate Energy Bill Energy Innovation and Workforce Development FERC Technical Language Energy Market Transparency Electricity Siting Restoring America s Manufacturing Leadership through Energy Efficiency Act Appliance Standards Improvement Act Energy and Water Integration Act Clean Renewable Energy and Economic Development Act Renewable Electricity Standard Cybersecurity The Bill has been passed out of the Energy & Natural Resources Committee and awaits companion Climate Change Legislation.

6 Senate Outlook 6 Committees of Jurisdiction: EPW, Agriculture, Finance, Energy, Commerce and Foreign Affairs Draft legislation expected soon Health care reform and appropriations first Getting to 60 votes

7 Highlights of Economic Analyses Economic analyses differ greatly due to a number of assumption factors. Estimated costs range from $175 (EPA) to over $3,100 (CRA) per household. Estimated jobs impact range from 2 million jobs created (Nancy Pelosi) to 2.4 million jobs lost (NAM). Estimated GDP impact ranges from a net loss of $100 billion (EPA) in 2030 to $571 billion (Heritage Foundation). Estimated impact on global temperatures range from slowing warming by 0.1 C (EPA) to no impact (CRS)

8 NAM/ACCF Oklahoma Impact of Waxman-Markey Legislation By 2030, Oklahoma jobs decline by 22,100 to 30,099. Oklahoma would see disposable household income reduced by $69 to $173 per year by 2020 and $490 to $883 by By 2015, gasoline would increase between 6% and 9%, electricity between 5% and 8% and natural gas between 16% and 25%. By 2030, gasoline prices increase between 20% and 26% while electricity prices increase by up to 54% and natural gas by up to 77%. Oklahoma s gross state product (GSP) will decline by between $340 and $584 million per year by 2020 and $3.6 and $4.9 billion by The current two largest sectors, machinery manufacturing and plastics manufacturing, show decreases in output of 7.1% to 8.7% and 10.8% to 11.7%, respectively in Output from energy intensive sectors falls between 11.0% and 11.8%. Oklahoma s coal production would fall between 86.4% and 87.2% and electricity production falls by 13.9% to 16.2% in Oklahoma s 2,014 schools and universities and 167 hospitals will likely experience a 20.3% to 30.6% increase in energy expenditures by 2030.

9 Economic Analysis of Offsets Estimates do not account for the costs of measures to address concerns about the credibility of offsets. Will the international offsets be available? Will the domestic offsets be allowed by EPA?

10 Oil & Gas in Waxman-Markey According to the EIA analysis, the bill will raise prices to $5.10 per gallon for gasoline and $5.60 per gallon for diesel fuel. The bill would allocate only 2.25 percent of allowances to fuel producers, but make them responsible for 44 percent of emissions. Refiners would need to cover emissions from refineries and also consumer emissions from planes, trains, autos, tractors, heating oil, and other petroleum use. The API analysis concludes that as a result of this legislation, fuel imports will double by 2030 from what they would have been. 6 million Americans depend on the oil and gas industry for jobs. The bill bars U.S. refiners from receiving domestic protections granted to other industries exposed to foreign competition. The bill establishes international competitiveness protections for energy-intensive, trade exposed industries with one exception -- petroleum refiners. According to an ICF study on a similar bill in the Senate, by 2020 the unbalanced cap and trade program reduced U.S. refining capacity by 3 million barrels a day out of a total 18 million barrels a day.

11 Copenhagen Three rounds of negotiations before Copenhagen: G20 nations will have a two-day summit in Pittsburgh, PA on September 24. There are also meetings in Bangkok from September 28 to October 9 and in Barcelona from November 2-6. UN Secretary General Ban Ki-moon has admitted that the slow pace of talks is a "matter of concern." Bill/No Bill scenarios vs. 60 votes/67 votes

12 EPA Action The EPA is preparing to regulate carbon dioxide under the Clean Air Act as a pollutant, which gives the agency the authority to regulate emissions on a source-by-source basis. Endangerment Finding GHG Reporting Rule New Source Review