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The energy bill

After many years of trying, we're moving in the right direction at last

Posted by Senator John Kerry (Guest Contributor) at 11:15 AM on 22 Jun 2007

Read more about: energy | legislation | US Senate | politics

I'm a bit bleary eyed after midnight votes, and about to do an event in Boston on the energy fight, but I wanted to come back here to Gristmill to tell you how good it feels to have gotten something good done in the Senate instead of just stopping bad things from happening.

A year ago I was battling to stop drilling in ANWR. Last night, finally -- after years of battling and five years after we introduced the Kerry-McCain legislation to raise fuel efficiency standards -- we actually accomplished things in the Senate that will improve the environment.

This is something that never would've happened with Bill Frist as the Majority Leader. But with Harry Reid leading the Senate, we were able to finally pass the first significant rise in CAFE standards in over a generation.

I can't tell you what a difference this makes. Yes, this has been an issue for me for many years, and I took a lot of heat for this during the 2004 race -- you might remember the Bush-Cheney campaign saying we were going to cost jobs in Michigan, when the truth is this is going to create good jobs in Michigan.

But after all the hits we took, after all the scare tactics, truth won a victory last night. Why? Because all of the activists of the Democratic Party helped to deliver a Democratic Congress, and now we can start the long process of building an energy economy that can work for us in the 21st century and can address climate change instead of making it a hell of a lot worse.

This isn't the perfect solution to the CAFE debate, and the overall energy bill still lacks some important components. But I never thought this would happen right away, and legislative change can be a long battle of attrition. In fact, you can bet that's exactly what it will be -- more on that soon. (In fact, in Boston I'm unveiling a scorecard of what we achieved and what we missed, and the work that remains to be done.)

But bottom line, we're moving the right direction on this, and with continued pressure and continued work, we can change the way we get our energy and the way we do business.

The nitty gritty details of what's in the energy bill can be found here, if you'd like to get the full rundown. But this is an historic moment; fuel fleet efficiency standards have been stagnant for 20 years, while oil prices have skyrocketed and our climate crisis has gotten more acute. Finally, we have a Congress that isn't burying its collective head in the sand over this. We're beginning the long process of moving forward.

We also managed to include a great number of other environmental initiatives in this energy bill, including support for furthering the technology on carbon capture and sequestration (something I worked with the folks at MIT on and I think holds huge potential). There are also provisions providing support for the development of more efficient lighting materials and building materials, as well as authorizing a program for electric drive transportation. And we set specific guidelines for the reduction of gasoline usage from projected levels and required biennial reports on the progress toward meeting those goals.

So what's next? We were very close to getting my major tax package included in this bill, one that rolled back $9 billion of tax breaks for big oil companies and added incentives for plug-in hybrids and many other environmentally beneficial technologies. We are only one vote short of breaking the GOP filibuster on that, and when Tim Johnson returns to the Senate from his courageous battle back to health, we can try again.

We still need to pass legislation demanding that our nation get 20 percent of its energy from renewable sources by 2020. Proposals to set requirements like that were blocked by (you guessed it!) a GOP filibuster. But the American people are demanding action, so we're gaining converts every vote.

This energy bill is not the single silver bullet solution to our energy and climate crises. But after years of fighting a losing battle to get any progress toward solving those problems, I am very happy to finally be moving in the right direction. The momentum is on our side, and we'll continue to create truly revolutionary change in our economy.

Thanks for all of your help.

Finally, a step in the right direction...

This is a only the beginning of a very long fight to deal with the monumental energy changes we must make. But at least things are under way in Washington.

It's good to see Senator Kerry's regular postings on environmental matters in the senate. Keep it up!

Bob Wilson

Please tax fossil carbon at the source. Pleeease.



not enough

Unfortunately, this new energy bill is not ambitious enough on the fuel efficiency standards, and overly ambitious on the ethanol production.  

The changes to CAFE take too long to go into effect, and are not as demanding as they need to be to make a significant dent in reversing/mitigating climate change.

The fact that the US has so blindly rushed into ethanol is incredibly short-sighted.  We are simply trading one environmental harm (CO2 emissions from cars) for another (increasing the dead zone in the gulf of mexico, increasing CO2 emissions from peat forest destruction, etc).  

This compromised bill makes it even more clear to me that this country is on the wrong path (or at least moving way too slowly on the right path).  

you've got to be kidding me

It's time to ditch CAFE... it's about 30 years past time to ditch CAFE and use economic price instruments to reduce the consumption of gasoline.

So there's the first major problem with this bill - a complete brushoff of effective, efficient policies in exchange for draconian standards that will be irrelevant by the time 2020 rolls around anyway.  CAFE standards tend to lag the market.

Next problem - a provision in this bill against energy price gouging.  Thanks for wasting paper Congress.  This provision is utterly meaningless - have you guys defined "unconscionably excessive" prices?  

What is it with politicians and their complete misunderstanding of economics.  How in the world do they expect to reduce gas usage and keep prices low?  This is, like, high school stuff.

So the last major problem (though I'm sure there are more) - mandates for ethanol?  Seriously guys, this is strike three.

expect pushback

What's with all this whining about CAFE's supposed lack of effectiveness? CAFE standards were successful in bringing about a huge boost in the fuel economy of the U.S. auto fleet between 1975 and 1985.

As this bill moves through conference committee and then to the president's desk, we can expect to see auto industry pushback redoubled. There'll be plenty of disinformation about how high fuel efficiency causes more traffic deaths. That one's easy to refute. Just look at the fleet efficiency of Europe or the Asian tigers -- much higher than the U.S. Then look at the per mile traffic fatality rates in those countries -- far lower than the U.S.

Turns out that driver education, enforcement, and advanced roadway engineering standards are much more effective at saving lives than relying on the armor of big, hulking trucks.

Ped Shed Blog

CAFE and the 80's

I disagree Laurence.  Perhaps more than some of us were there ... but my recollection is that CAFE came at the same time as a huge change in consumer perception.  It was a societal shift caused by a real oil shock.  People raced to abandon gas guzzlers, and to embrace small Japanese cars.

Evidence that my recollection is correct:

  • We had those crazy "voluntary import restrictions" from the Japanese makers to make sure people kept buying (larger) American cars

  • The vehicle retirement rate leapt, as people tried to get out from under those guzzlers.

If this had been legislation driven, and people had not been seeking those cars, they would have held on to that Big Iron.  The Japanese would not have had to limit their customers (what a hoot in retrospect).

So no, I count those 80's as a societal response, and that's what I expect again.

Thank you Senator for trying, but I betcha that the legislation will be watered until, again, the market leads.

At least it will lead if we have another "up year" or two for energy prices.

(I'd prefer "Feebates" on the window stickers ... but maybe those would just be watered too ... powerful interests.)

but

people should be able to drive what they need or want to -- but they should also have to pay for the costs they impose on others by doing so.  Increasing the gas tax would make that happen.

 

Re: CAFE and the 80's

Evidence that CAFE was a primary driver of fuel efficiency increases: Real gas prices are much higher today than during the 1973 oil shock, and slightly higher than the 1979-81 oil shock. Yet fuel efficiency has been flat since the late 1980s, when CAFE standards stopped increasing.

Our government -- the GAO, the military, the Department of Energy -- is telling us that the supply of cheap oil is more precarious than ever before, facing hard long-term limits that generally weren't recognized in the 1970s. Yet there is no huge societal shift underway. Just some relatively minor and marginal changes in buying trends.

Also, the rapid shift to Japanese cars was the result of superior price and reliability as much as efficiency. American cars of the late 1970s and early 80s had a reputation as crap, often well deserved. David Halberstam's The Reckoning tells the whole sorry tale.

Ped Shed Blog

constant dollars

We usually refer to inflation-adjusted, or constant dollars, as real dollars.  By those, the national averages have just recently touched the 70/80s high.

We in California exceeded them for a while (the OC average hit $3.48/Gal per PriceBuddy).

The insidious thing really has been the repeated media theme that we "we still had not" exceeded those highs, when in California we had.

So I'm not sure I getcha.  We've barely hit those highs, and we did not do it as the same kind of spike (with gas lines) as in the old days.

spiky

Sure there's a spike. Look at the chart. Much higher than the 1973 spike, and its been underway for five years now.

Ped Shed Blog
dollars

The dollars you are looking at are not the inflation adjusted ones, and they are not (perhaps importantly) are not the income adjusted ones.

unless you moved

Laurence, you started by saying higher than the 70/80s, which would be the inflation thing.

If you were now addressing my comment ("we did not do it as the same kind of spike (with gas lines) as in the old days") then don't miss what I said.  I said "same kind" "with gas lines"

Odd/Even days anyone?

tepid

The dollars are in fact inflation adjusted. Here's another chart, and another, and another. They all show the same thing: The current spike is much higher than the 1973 spike, and it's been underway for five years now.

During the 1973 spike, the government tried to keep prices down with mandated rationing and windfall profits taxes. If people switched to more efficient cars because of government-caused lines, that seems to be another argument against the idea that demand for increased car efficiency was purely a free market societal response.

Today we have high prices instead of the government-mandated even/odd rationing we had in 1973. Here's an article that agrees with my position that the response has been "tepid" compared to the 1970s.

Ped Shed Blog

Too little, too late?

How much oil will this save us? We can find estimates from the DOE Hirsch report:
We further assume that vehicle fuel efficiency standards are increased 30 percent three years later -- for cars from 27.5 mpg to 35.75 mpg and for light trucks from 20.7 mpg to 26.9 -- and then increased to 50 percent above the base eight years later -- for cars from 27.5 mpg to 41.25 mpg and for light trucks from 20.7 mpg to 31 mpg; finally, we assume full implementation is assumed 12 years after the legislation is enacted. These assumptions "push the envelope" on the fuel efficiency gains possible from current or impending technologies. On the basis of our assumptions, the U.S. would save 500 thousand barrels per day of liquid fuels 10 ten years after legislation is enacted; 1.5 million barrels per day of liquid fuels at year 15; and 3 million barrels per day of liquid fuels at year 20.

Assuming oil use continues to grow at a modest 1% (from population increase, more suburbinization, etc.) after 10 years we'd be importing another 2 mbpd. In other words, we'd be wiping out the modest gains from fuel efficiency. And I'm not even considering peak oil or a supposed 80% reduction in carbon by 2050.

In the words of Tom Whipple the energy bill is "too little, too late".

In my view, it's time to get serious about public financing of elections to get the corporations out of politics and get an energy policy in touch with looming reality.

Yes, what about the influence of government?

Laurence Aurbach has a point when he writes:

During the 1973 spike, the government tried to keep prices down with mandated rationing and windfall profits taxes. If people switched to more efficient cars because of government-caused lines, that seems to be another argument against the idea that demand for increased car efficiency was purely a free market societal response.

I recall those days, and the prevailing attitudes. The Limits to Growth study -- though overly simplistic -- had stimulated a big discussion on natural resources, and the world was worrying about energy, minerals and even food running short. After Nixon left office, we had Ford and Carter urging conservation. The national speed limit was lowered to 55 MPH. And yes, long lines at gas stations left an indelible impression.

Nowadays, the message seems to be: "Don't worry about high gas prices and shortages, we'll solve that with home-grown biofuels." And meanwhile, what CAFE standards exist get watered down by the "dual-fuel" loophole, which credits flex-fuel vehicles with much higher gas mileage than they actually obtain.

So yes, prices, and expectations of prices (compared with expectations of income) matter, but so do the messages from respected experts and political leaders. At the moment, those messages are mixed at best.

These are only my personal opinions.

huh?

I get it now Laurence.  I am talking about the 70/80s spike, and for some reason you are talking about the "73 spike."

The 73 spike produced a dip in gasoline consumption, but not the real turn we had the spanning late 70's and early 80's.  If I recall correctly it took 10+ years for gasoline consumption in the US to again match 78 levels.

a pretty good PDF

OK, bottom line

This probably seems like a stupid pissing match to many, but it is about the policies we are suggesting and/or supporting.

It is, fundamentally, about how much CAFE has mattered.

The graph on this page shows that Light-Duty Vehicle Adjusted Fuel Economy leapt in 1979.

I said, originally that CAFE did not achieve that, that it was a broader societal response to price increase and gas shock.

All you have to do to prove me wrong is show me that some CAFE rule, or something, kicked in with legislated requirements IN THAT YEAR.

graph

I found a graph that is exactly about what I've been saying.  The blue line is CAFE, the actual Corporate Average Fuel Economy (not the target).  The red line is the target, the "CAFE standard."

Note that the actual fleet mileage takes off in response to gasoline price (black) and stays ahead of the standard.  Indeed, except for briefly touching it about '85, our actual mpg has always stayed ahead of the requirement.

Hence my statement that CAFE "is designed" to trail the market.  At least in the past it has been feel-good legislation, but hasn't pushed consumers into anything that they weren't doing already.

More at wikipedia

inconclusive

That Wikipedia graph is somewhat unpersuasive, as it does not include light trucks and SUVs, and does not clearly show the relationship in the 1970s when the biggest gains in total fuel efficiency occurred.

We probably will not be able to resolve this question conclusively -- the experts have studied it and have similar uncertainties:

The CAFE standards, together with significant fuel price increases from 1970 to 1982, led to a near doubling of the fuel economy of new passenger cars and a 50 percent increase for new light trucks. While attempts have been made to estimate the relative contributions of fuel prices and the CAFE standards to this improvement, the committee does not believe that responsibility can be definitively allocated. Clearly, both were important, as were efforts by carmakers to take weight out of cars as a cost-saving measure. CAFE standards have played a leading role in preventing fuel economy levels from dropping as fuel prices declined in the 1990s.

--Effectiveness and lmpact of Corporate Average Fuel Economy (CAFE) Standards, Transportation Research Board (2002), p. 14-15



Ped Shed Blog
Light trucks and SUVS

Actually, those help my argument.

If the CAFE reg was flawed, with SUVS gaps, and mileage still leapt earlier, in 1979 ... it had to be because of a social change.

That was price driven in part, but also because society at large bought into changed rules.  They acted, and regulated, based on their changed world-view.

It is silly to say that they changed their world-view, regulated themselves, and then acted in response to their new regulations ... because things DID NOT HAPPEN IN THAT ORDER.

So what we want now, what we want to shout for, is social change, not new CAFE rules with an umpty-ump year time horizon.  Those, as always, will lag what people are doing.

(The Transportation Safety Board is doing CYA)

Kerry and Ethanolics Unanimous

 http://chattanoogan.com/articles/article_109209.asp
Ethanolics Unanimous
posted June 21, 2007

Once again, we find our political leadership united around a very bad idea, ethanol and other biofuels to help gain "energy independence," to "help farmers" and most importantly, to help citizens avoid the harsh reality of peak oil converging with unsustainable lifestyles. It is understandable that the politicians must pander to the corn growing states in anticipation of election cycles. Politicians have always been prostitutes for votes. Even the most enlightened, progressive, and thoughtful of them have fallen prey to this cornographic behavior.

While some crops are superior to others and forest eating cellulostic ethanol technology scams are still in development, corn ethanol primacy is devouring the nation's alternative energy focus. Billions of taxpayer dollars are being thrown into this unsustainable technology and we subsidize each gallon of auto alcohol to the tune of 51 cents per gallon. The ethanol fumes are leaving us drunk on delusion, ignoring the consequences and refusing to face the future when the oil dries up.

To grow enough corn for ethanol to replace our oil addiction would require approximately 482 million acres of cropland, exceeding the current total of 434 million acres of cropland used for all food and fiber. This does not even account for projected growth of oil consumption in the U.S. There is already the push to put the marginal Conservation Reserve Program lands, vital for wildlife and water quality and quantity, into intense energy crop production.

Old school ethical farmers in the corn belt are already lamenting the destruction of soil saving windbreaks, some planted during the CCC years, the plowing under of hayfields to corn, highly erodable hilly lands being put into corn, and water drainages being reduced, hearkening back to the depression era insanity that squandered so much vital topsoil. Cellulostic ethanol scams will fare even worse for the soils as "residues" are scooped up, leaving virtually nothing to feed back to the soil.

"The nation that destroys its soil, destroys itself," said President Franklin D. Roosevelt.

In the rush to burn our nation's dwindling soil resources, corn is king. Corn devours soil nutrients at 12-20 times the rate of soil renewal, meaning it is already a highly unsustainable crop. Corn is also highly dependent on fossil fuel based fertilizer and pesticide inputs. With the inevitable hybridization and Genetically Modified Organism corn crops, the soil nutrient depletion will accelerate. The Corn Cartel, led by the likes of Archer Daniels Midland and Monsanto, have been working for decades on their plans for corn dominion over the U.S. and are now reaping record profits and subsidies.

Meanwhile, back on the farm, in addition to the land ethics meltdown, prime farmland prices have soared, rents have become prohibitive to all but the largest agribusiness operations, and again, the small farmers, the backbone, are being winnowed out like so much chaff. Seed, fuel and fertilizer costs are rising to meet the increased profit per bushel and farmers find themselves back on that familiar treadmill, the promise falling short as it always has.

In a land already plagued with poisoned groundwater, the incidence of atrazine and other poisons will only become more pervasive. Aquifers, already drained faster than recharge will only dry up faster in direct proportion to our ethanol consumption. It takes around 8,000 gallons of water to produce a gallon of ethanol from corn and each gallon of it leaves eight gallons of toxic waste sludge. Even in the land of 10,000 Lakes, Minnesota is experiencing water shortages from the ethanol production explosion. With 99% of corn production under intensive fossil fuel nitrogen fertilization regimes, there is a directly proportionate resulting contamination of surface and groundwater and growth of the dead zones where our rivers drain.

Depending on if you believe the science of the Corn Growers Association or scientists from Cornell University, corn will produce slightly more energy than is required to turn it into ethanol or substantially less. Having monitored the bioenergy crowd for a decade, repeated inquiries into true sustainability have been met with deafening silence. There is no ethanol plant in operation that can plant, grow, harvest, transport, process, and transport it's product on ethanol alone and still show a profit. It cannot be done given today's economics.

Ethanol also contains only 70% of the energy of gasoline. Therefore, it takes much more ethanol to go a hundred miles than it takes gas, undermining the 10 cent price difference at the pump that seems like you are saving money and the earth. Ethanol blends also evaporate far more readily causing a toxic nauseous moment at the pump and increasing ozone pollution. With the EPA poised to adjust ozone pollution standards to actually protect people, and Chattanooga's history of barely tolerable air, it is unconscionable for the ethanol bandwagon committee here to be falling for this scam.

Today, communities across the cornucopian landscape are fighting proposed ethanol plants on issues from water consumption, water quality, noxious fumes, noise, traffic safety, and other quality of life issues.

Meanwhile, back at the grocery store...

Do we feed cars or ourselves. To fuel the average American consumer's driving habits would require 11 acres of cropland per year, the same cropland that could feed seven people for a year. Already we've seen tortilla riots in Mexico and other places where corn is a food staple and the 60% price increase is prohibitive for the least affluent amongst us.

Ethanol primacy is in direct competition for the dairy and animal industry. In the US, the USDA projects that the wholesale price of chicken will be 10% higher this year, the price of eggs up 21%, milk 14%, beef 6% and this is only the beginning. Other food crops like soybeans, wheat, barley are being plowed under to feed cars instead. Already in Germany there is a shortage of barley leading the good Germans to fear for the future of their beer. In Mexico, blue agave tequila plantations are being burned and plowed under for corn, leaving those in Margaritaville far less happy while on vacation. And again, the small farmers of the US and elsewhere will be washed out as agribusiness always wins like the other Casinos do.

After we do the inevitable Enron-style bailout of the ethanol scamsters, we will be left with soils so depleted of basic nutrients, that any subsequent food production will be lower in nutrients, adversely affecting human and animal health and well being.

Indonesian and Brazilian rainforests are falling for ethanol and bioenergy production, slavery is making a comeback, peasants are being driven further into the forests, paramilitary corn cartels are stealing land in Columbia, endangered species are on the run and unmindful consumers of the over-developed world keep on consuming with nary a thought.

The ethanol scam will only accelerate global warming. As forests are cleared, more carbon is released than could ever possibly be avoided by burning ethanol. The mere act of using ethanol as a panacea to keep consumption and the American Weigh alive and unwell, will keep consumers unmindful and uncaring. Politically, that is what this whole snake/corn oil boondoggle is all about. To paraphrase the Jack Nicholson line..."We can't handle the truth..about corn, peak oil, unsustainable lifestyles and how we're ripping off future generations." The switchgrass crowd, biodiesel crowd, and others intent on devouring soil and landscapes, might be somewhat less devastating, but the same problems will exist to the degree that the earth's ability to support us declines and the other degrees continue to rise.

Now what...

If we poured trillions of dollars in subsidies to the oil and corn industries and untold resources into truly sustainable technologies, we could actually avert the worst case scenario of the end of oil and ensuing chaos and anarchy. Hard-Pour Cornography has us all cornfused for now, as our politicians and policies pander to the oil and corn cartels. Consumption based taxation on fuels, vastly improved mileage standards with current technology and technology in development, supporting improvements in solar, wind and storage technologies, car pooling, a conscientious and ethical public, combined with our ingenuity and technical prowess, we could develop truly sustainable options without a noticeable impact on our sacred standard of living like we're the only creatures on the planet.

There is a reason that Toyota is now the biggest auto dealer in the US...innovation and mileage. The Chevy Volt is promising to get 150 mpg, mostly driven by electricity. Solar technology is on the verge of becoming competitive to the earth raping, subsidized technologies of ripping mountain tops off for coal, mining and leaving nuclear waste for 10,000 generations to deal with, and oil wars that kill and maim millions. Decentralized solar and wind could power virtually all of our current home and transportation needs. If we quit driving our food an average of 1,500 miles per bite and bought locally, lived within our means as communities and individuals, we might find an actual higher quality of life as we re-create communities based on our old values of taking care of the planet for future generations, living by the golden rule, and being tough enough to figure things out and do right. Just sit down by your car and take a swig of your favorite ethanol beverage, share a shot with your SUV, and ponder ways to avert disaster and the bad-mouthing of us by who is left of posterity.

Denny Haldeman
Soddy Daisy
dennyh@bellsouth.net
 

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