House Passes Energy Bill with New CAFE Regulations
07 December 2007
In a vote largely split along party lines, the US House of Representatives passed H.R. 6, an amalgamated energy bill now containing a 40% increase in fuel economy requirements by 2020; an increase in the renewable fuel standard to 36 billion gallons per year by 2022; provisions for a renewable electricity portfolio; and the elimination of about $13 billion in tax subsidies for big energy companies, along with a host of other provisions and initiatives. (The bill is more than 1,000 pages long.)
The bill now heads back to the Senate, and, assuming it clears that hurdle, on to the White House, which has already threatened a veto.
CAFE. The Corporate Average Fuel Economy (CAFE) language maintains the distinction between passenger cars and light duty vehicle trucks, and targets combined average fuel economy of 35 mpg by 2020. The new program would take effect with model year 2011. For 2021 to 2030, the bill calls for the “maximum feasible average fuel economy standard for each fleet for that model year.”
The bill allows the establishment of a fuel economy credit trading program among the manufacturers. The bill also requires the development of fuel economy improvement programs for commercial vehicles.
The flexible fuel vehicle credit—whereby manufacturers of flexible fuel vehicles get to log an increase in average fuel economy as a function of the flex-fuel vehicles they produce—is extended on a declining scale through 2019.
Transportation electrification. The bill contains a number of provisions to accelerate the electrification of transportation, including:
The establishment of a program to provide $450 million in grants over 5 years to State governments, local governments, metropolitan transportation authorities, air pollution control districts, private or nonprofit entities, or combinations of those governments, authorities, districts, and entities, to carry out 1 or more projects to encourage the use of plug-in electric drive vehicles or other emerging electric vehicle technologies.
The establishment of a program to provide $570 million in grants for near term electric transportation projects.
An educational program that includes a plug-in hybrid electric vehicle competition—to be known as the “Dr. Andrew Frank Plug-In Electric Vehicle Competition” for institutions of higher education.
Support for plant conversions, incentives for vehicle manufacturing and advanced battery manufacturing in the US.
Renewable Fuel Standard. The new renewable fuel standard target rises to 36 billion gallons in 2022. The renewable fuel standard includes a low-carbon fuel element to it: basic renewable fuel used in fulfillment of the requirements of the RFS produced after the enactment of the RFS must achieve at least a 20% reduction in lifecycle greenhouse gas emissions compared to baseline lifecycle greenhouse gas emissions. Cellulosic biofuels need to register a 60% reduction from the baseline, and other advanced biofuels, including biomass-based diesel must register a 50% reduction from baseline.
Corn ethanol is capped at 15 billion gallons; the remaining 21 billion gallons is to come from advanced biofuels (non-corn ethanol; cellulosic ethanol; biobutanol; biogas; biomass-based diesel), at least 16 billion of which are to be cellulosic biofuels.
H.R.6: Energy Independence and Security Act of 2007 (Engrossed Amendment as Agreed to by House)
I just read that the senate has enough votes to block the law as it is right now.
Posted by: Henrik | 07 December 2007 at 08:01 AM
I wait, chomping at the bit, ...for everyone who will come in to nitpick and bellyache because this potential progress (still has to get through Senate and possible veto) isn't 100% up to their standards!
Please let the complaining commence...
Posted by: Patrick | 07 December 2007 at 08:02 AM
This is hardly good news. The bill, long overdue and sorely needed, includes not only broadly agreed items like CAFÉ, but highly controversial 15% requirement for renewable electricity (which is impossible to achieve in specified time period), sharp reversal of incentives to domestic oil production, and unrealistic provision for cellulosic ethanol, plus truckload of unrelated items.
Leaders of Democratic party are risking to overload the boat and stall the bill with all it good provisions in Senate and White House.
Posted by: Andrey | 07 December 2007 at 08:05 AM
Why don’t they split this 1000 page law up in less extensive laws and get them through one by one. With such a big law package it is too likely that it will never make it into law. I could be wrong but I think this law is already a long time overdue and changing the strategy on how to pass it may be the only thing that will work. Or maybe the only thing that can get it through is a new US president that actually cares for the well being of future generations.
Posted by: Henrik | 07 December 2007 at 08:13 AM
It ain't a super bill, but it's a huge improvement. Want it to pass? Call your senators -- especially if they're Republican.
Posted by: stomv | 07 December 2007 at 08:15 AM
What about the tax hikes? The news has mentioned tax hikes.
Posted by: Nemo | 07 December 2007 at 08:28 AM
On Friday morning the Senate rejected this version, and it is anticipated to pass a slimmed down measure on Monday. Then the question is whether the House will have time to respond by the end of the year. Even if the bill only contains CAFE and appliance/lighting efficiency measures, it is still extremely important. If we can make progress on these items this year, that means in 2008 and 2009 Congress can focus on carbon and renewables rather than going back to CAFE and biofuels.
Posted by: derznovich | 07 December 2007 at 09:25 AM
It's going to be tough to get anything to pass with Bush around, but if the Democratic congress can get this to pass, veto-proof, under a Republican president, then it's going to send a strong signal worldwide that the time has come to change.
Once renewables and electrics are common it's going to help democracy all over the world, maybe eventually in the middle east and Russia. Look up "Resource Curse" and "Rentier State" (even on wikipedia) to learn more about how oil undermines freedom. Basically, those who don't pay much in taxes in their countries are less entitled to question what the government is doing. If most of the state's revenue comes from oil then the state can ignore the people's demands, pacify them with social programs, and use a police force to silence dissent. This is part of the reason Russia has been backsliding on democracy lately, Putin is exercising more control over the energy sector and $90/barrel oil is part of the problem.
Posted by: Elliot | 07 December 2007 at 09:33 AM
Henrik....you've said correctly.
Is the objective to get this bill passed or to make sure that, with 1000+ pages, it will bog down in the Senate and White House for what is left of the current administration time. Politics.....?
Why can't they keep it simple, one major goal at a time or per bill, such as:
1) clean energy production and distribution.
2) e-energy storage units production.
3) Hybrids, PHEVs and BEVs promotion.
4) biofuels production-limits.
5) fossil fuel consumption reduction.
6) Oil import reduction.
7) Power plants pollution reduction.
Posted by: Harvey D | 07 December 2007 at 10:23 AM
"highly controversial 15% requirement for renewable electricity (which is impossible to achieve in specified time period)"
By far the single best provision of this bill, sorely needed, only "controversial" to fossil fuel executives and their hack spokesmen at EPRI and such places.
"sharp reversal of incentives to domestic oil production"
what domestic oil production? Texas? Alaska? The oil in these places disappears as we read. Treating oil as our future is not going to save us.
"unrealistic provision for cellulosic ethanol"
The White House officially maintains they oppose the ethanol provisions because they "don't go far or fast enough". The best political move the Democratic leadership could make right now would be to sever this out as a separate item and force it to Bush's desk. His saying he's for ethanol is about as believable as when he said America was "addicted to oil".
No matter what is done, there will be forces ready to try to block it. We should support this because it's the best we can expect to come out of our political system.
Posted by: Jim G. | 07 December 2007 at 10:29 AM
These pinheads are part of the problem, not the solution!
Posted by: Engineer | 07 December 2007 at 10:52 AM
This is horrible news. Everyone will declare victory, and nothing will have been done about the real problem. The Democrats in charge of Congress are so misguided. At the same time, Bush will veto for the wrong reasons altogether.
The only way to have a real effect on our oil consumption is to have a national gas tax, as proposed by Dingell (D-MI). Tax $0.50 a gallon, use the extra revenue to fund alt fuel research or infrastructure maintenance (or if you're concerned about the burden on lower-middle classes, turn the revenue into a tax break for them). In addition, a minimum price must be set on each barrel of crude. Lots of research and investment is being made in alt fuels and fuel saving technologies. All the Saudis have to do is boost output (or drop prices) and all that work and investment will disappear. (Look at history - we had alt fuel research going on in the late 70s and when oil dropped - poof, it's gone). A price floor would protect this work and investment. Unfortunately, a political backbone is necessary for this to be done, and save for a handful of Congressmen, no one has any.
If the CAFE standards are raised, consumers will continue to buy vehicles that consume more petroleum than necessary, and drive more. Again, look at history: after the CAFE standards were first implemented in the early 80s, vehicle miles travelled (VMT) doubled. If gas is taxed (ie, made more expensive), people will change their driving habits (ie, drive less) and eventually begin to move closer to their work (and not drive 100 miles a day), or get into smaller cars.
All this bill will do is create burden on automakers (who have been scapegoated big time on this one). The OEMs were complying with the laws the Congress created (and it is the Congress who failed to act all those years). Now we dump a huge job on them (don't believe anyone who tells you the automakers can do this overnight for $1 a car), right in the middle of a market downturn. Good move.
Posted by: John | 07 December 2007 at 11:18 AM
I'm really glad to see that biobutanol was mentioned in a piece of legislation. Hopefully it gets some good funding so we can get away from this ethanol crap. Ethanol is for drinking not driving.
Posted by: word | 07 December 2007 at 11:35 AM
John, I like your examples, yet nobody seems to take this "negative" viewpoint seriously. It only makes sense though, if I am currently spending $X on gas and living comfortably, and my mileage doubles, I can now drive twice as much with no effect on my life.
People do not consider externalities, the only way to make them change is to hit them in the wallet. Good thing the Flex Fuel loophole has been extended, that should ensure no changes until 2019.
Posted by: Kevin | 07 December 2007 at 11:40 AM
It's pretty obvious to any intelligent person, what needs to be done.
A government that is controlled by big business needs to give the electorate the impression that it is doing the right thing.
Does anyone REALLY think it will be done?
Posted by: Lucas | 07 December 2007 at 11:41 AM
In the US, to get any legislation passed, you need 60-67 votes in the Senate, or nothing happens. That's just how this system was structured. This task of bringing useful renewables policy is made next to impossible given that there is a large base of Republican voters who don't believe in global warming, and our campaign finance laws are very weak, leaving corporations with the bulk of the influence. If you are holding out for an ideal, something better than this, you will be disappointed. It's not perfect, but at least the Democrats have been trying to do something. 15% of electricity from renewables would be an enormous gain. The alternative, from the Republicans, is to drill in Alaska and to subsidize coal mining, handing money to refining companies, etc. That's just so much worse.
Posted by: Jim G. | 07 December 2007 at 01:02 PM
We know that a hotter 'greenhouse planet is the tip of a very big very scary iceberg.
We are constantly amazed on the other side of the pacific at the repoted literally religious zeal of the inhabitants of our now second major trading partner (china recently overtaking).If I could speak mandarin and get a line through, I' be saying some things there too!
One large part of this whole situation in MPO is a cultural propensity to some doomsday fundamentalist end game that shows to observers in a number of military, consumerist, testosterone driven, autistic behaviour.
The politicians seem powereless to challenge as the whole vocal Phsycie of America is such a self interested and unbridled lot that reason is barely a squeak.
Before getting kicked into oblivion last month, the previous large majority govt's leader (our prime minister) complained about people with an "unreconstructed" WTF*? view of A.S.I.O. Australian security intelligence orginisation.
You may know them as the ones who were so sure that Iraq held weapons of mass destruction.?
The only thing vaugely "intelligent" about this organisation was their total faith that the population 1: couldn't care less about the next million civilian Iraqis they would see massacred. 2: as long as they could claim they were misled. 3: it has nothing to do with me . 4: they had it coming and 5: to bring them democracy, preserve our national interests by securing strategic interests ie oil.
So americans are sensitive about 9/11.
3,000 Innocents dead.
Now add 3,000 + sevicemen and 1,000,000. Iraqis.
Australian security and intelligence supressed dissent, passed laws and with the assistance of our "poisonous and disgracefull ex P.M.
By the politics of fear and repressive laws.
Why? cause they could and thats the personality.
My sympathies are with those politicions etc who find that if they were to speak out, there is some law or other trouble awaiting.
You got a long way to go and I hope you can take comfort from Australias present dream run.
Dont wait for God is my advice, but then you must know that by now.
Posted by: Arnold | 07 December 2007 at 01:17 PM
Exactly how would 15% RES be impossible?
Certainly you haven't been following the fact that new coal plants have been tripling and soon seventupling in price?
Or the fact that the price of natural gas has gone WAY up since 2005.
Or the gains in industrial-scale renewables like geothermal, baseload wind, and solarthermal.
Posted by: GreyFlcn | 07 December 2007 at 01:25 PM
"40% increase in fuel economy requirements by 2020"
That's a whopping 2.8% a year!!! Can Detroit meet the challenge?
Posted by: DS | 07 December 2007 at 01:37 PM
I doubt anything truly productive will come from federal government on this issue, all change is going to have to start in the private sector and from the consumer. We need to see more companies that are profitable, well funded, and sustainable tackle the problem of energy. Government mandated change is going to have to come from a state level, hopefully with more states following California's lead. Lobbying is just as big of a problem as global warming and foreign energy dependence.
Posted by: thedude | 07 December 2007 at 01:37 PM
Let's hear it for the Democrats in Congress. They passed a bill that would improve the energy picture in every facet:
1. eliminate counterproductive subsidies for oil producers (the real reason for the veto threat is that the bill repeals the tax breaks for Dick Cheney's friends that Bush has pushed through).
2. establishes high but achievable targets for renewables, that will add mass to an already vigorous green venture technology industry.
3. establishes high but achievable targets for biofuels, that will ensure a dependable market for new technologies regardless of market price fluctuations (especially manipulations by OPEC once they see that they have real competition).
4. Drives significantly higher CAFE standards, to address the abject failure of the market system to capture and properly price the external costs of fossil fuel consumption, namely pollution, climate change and the $500B we spend on defense every year.
None of these things could be accomplished by the free market or by private industry without the leadership of the government and protection from monopolistic price manipulation by Republicans, the 5 oil companies that dominate the energy supply and OPEC. (anybody notice that with oil near $100/barrel Bush is still insisting on full scale purchases of oil by the feds to fill the STrategic Reserve? you think milk price supports are expensive?)
All patriots should get behind this bill right now and call their Senators, especially the Republicans. Give me one reason why we shouldn't support this bill in its current form. Just one, other than 1) I don''t believe it will pass or 2) I'm a Saudi Arabian and I believe in the tooth fairy and the free market.
Posted by: dollared | 07 December 2007 at 02:21 PM
If only the market were as predictable as the commentors here.
Let us see something here:
Who gets average 20mpg here? Okay, how many miles do you drive in a year? Maybe 10,000 maybe 15,000...do you honestly expect us to believe that if you were suddenly getting 40mpg (in the same vehicle with same driving style) with gas at the same price as today you will suddenly do 20,000 to 30,000 miles per year...and the rest of the US would do the same?
Did we maybe forget the time component here...okay fuel goes further for me now so I can live further away from home and drive on the same amount of gas but double the distance, gee: how many people really want to turn their .75 hour to 1.5 hour commute into a 1.25 hour to 2.5 hour commute (assuming that the further reaches would not double commute time due to less traffic but that would be very optimistic if everyone follows suit in driving twice the distance as the naysayers to increased cafe contend).
Talking one-way travel times here.
* commute times pulled from average commute times in the Pacific NW during rush hour from anecdotal evidence (those I talk to) and data from the traffic management system in place on www.wsdot.wa.gov where many people are driving from Puyallup (or further south) up to Bellevue/Redmond or Seattle and to Seattle or Bellevue/Redmond from Everett and further north.
Posted by: Patrick | 07 December 2007 at 02:44 PM
The reason they do giant bills instead of granular bills is because they include all the compromises for different jurisdictions necessary to get the package passed, at least in the house. CAFE +ethanol for the midwest, etc.
Posted by: HealthyBreeze | 07 December 2007 at 03:01 PM
It seems that the Senate Republicans blocked the bill. Add this one to a long list.
I see no reason that the Democrats can't start impeachment proceedings. It isn't like they can get anything done with these O*&(&* obstructionist Republican Senators.
Posted by: eric | 07 December 2007 at 03:12 PM
"Exactly how would 15% RES be impossible?
Certainly you haven't been following the fact that new coal plants have been tripling and soon seventupling in price?
Or the fact that the price of natural gas has gone WAY up since 2005.
Or the gains in industrial-scale renewables like geothermal, baseload wind, and solarthermal."
Not to mention that companies that are paying attention are slashing their energy use. If that trend keeps up, you could get a significant chunk your 15% renewables just by retiring coal & gas-fired peakers that aren't needed anymore, without adding 1 watt of additional renewables. Toss in some V2G and you'll really cut peak demand...
Posted by: rob | 07 December 2007 at 04:49 PM