A Second Wind for Cap-and-trade?

The following was written by James Coan, research associate at the Baker Institute Energy Forum
The big energy news in Washington today is that Sen. Harry Reid wants to introduce a bill with both a cap-and-trade program and new regulations and oversight for offshore drilling. As a freestanding bill, cap-and-trade would a very low shot at passage, but the offshore regulations are extremely popular in the wake of the Deepwater Horizon disaster and that might give a combo bill some play.
If Reid follows such a plan – and there’s no certainty he will – it is unclear how Republicans will respond. The most likely scenario is that the cap-and-trade provision for Republicans would become like provisions to drill in ANWR for Democrats, immediately tainting the rest of the bill. Yet some Republicans may be concerned about opposing some of the popular measures that might wind up in the bill. It is unclear if limiting the cap-and-trade program to utilities, as has been recently discussed, might help win Republican support. Sen. Lindsay Graham (R-SC), who walked away from earlier talks, voiced support for such a plan, as have some other Republicans in the past. And surprisingly, a limited cap-and-trade even is gaining acceptance among certain environmentalist progressives.
Still, with the midterm elections looming, it seems unlikely that Republicans will want to give Democrats such a policy victory. Cap-and-trade is anathema to many conservatives, whose views of the validity of climate change science has grown more skeptical in recent years. The Congressional calendar is already quite tight, and even if the Senate passed a new, more innovative combo bill, it would need to be reconciled with a House version. The conference committee just finished its meetings over six weeks after the Senate passed the financial reform bill, and Obama signed health care reform three months after initial Senate passage. Finally, Deepwater Horizon curtails the possibility of a compromise of increased offshore drilling for the support of more moderate members.
Without cap-and-trade, the other main option is to pursue an energy-only bill. According to a recent presentation I made in Tokyo, this is the most likely outcome because more Republicans support these measures, and the public is extremely enthusiastic about most of them. Right now two main versions of energy-only bills are in the Senate: the “American Clean Energy Leadership Act” reported out of the Senate Energy and Natural Resources committee last year and the “Practical Energy and Climate Plan” Senator Lugar (R-IN) released earlier this month. They both share incentives for nuclear power and carbon capture and storage, many efficiency measures, and a mandate for low-carbon electricity and efficiency.
After Deepwater Horizon, interest is growing in reducing oil use, and Lugar’s plan mandates at least 4%/year improvements in light duty fuel economy standards as well as heavy duty standards. Sen. Merkley (D-OR) wants 6-7%/year fuel economy improvements, and President Obama just backed a proposal for $6 billion for electric vehicles.
The fuel economy standards could substantially reduce oil use. If they increased 6%/year from 2016, fuel economy standards would be 60 mpg in 2025. Today’s Prius would be considered inefficient.

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  1. me

    Global warming is real, as is the death of the Gulf brought to us by vicious, illiterate heartless, Texan oil monsters.

    #1
  2. Terry

    Cap and trade is just one more way for Libs to tax us. Our economy is not going to recover until we can get these idiots out of office.

    #2
  3. carpenter

    If the Republicans accept any bill with cap and trade provisions they will have lost their collective minds.

    #3
  4. Rob

    In order to increase fuel efficiency further, autos will have to be more lightweight, which probably means more plastics. Ironic that plastics are still made almost exclusively from refined petroleum products. For you greenies out there, plastics via biological routes are under exploration. But economically feasible production is many, many decades away. So, drill, baby, drill, because we have no other reasonable choice.

    #4
  5. 42

    A carbon tax would be preferable to cap-and-trade. In any event, we MUST take action NOW to reduce the amount of greenhouse gases being emitted into the atmosphere!
    Ironically, as the right-wing noise machine and its fossil fuel allies have successfully eroded public support for efforts to reduce greenhouse gases, the science behind anthropogenic global warming has grown even stronger!
    I hope we’ll take action on climate change, but I’m not optimistic: I feel sorry for our children, grandchildren, great grandchildren, and future generations.
    We should all be better stewards of God’s creation.

    #5
  6. TC Travis

    Cap and Trade Will Be a Travesty to our Energy Market… http://www.voicesforenergy.com

    #6
  7. John

    Global warming does exist and any geologist worth their salt will tell you so. The earth has been warming since the last Ice Age. It’s a natural cyclic event, not man made… It’s the politicians who are taking advantage of a natural event to TAX us and take away our quality of life. If you use ANYTHING made of plastic, you are using petroleum-based materials. Simply changing our gasoline consumption only affects the portion of a barrel of oil that is refined into gas. That percentage is far below 50%. Don’t be deceived by Washington DC.

    #7
  8. Kittyg

    Of course, there have been some who are more concerned about the eco system since the gulf spill! However, this is why Bozo wouldn’t allow skimmers from other parts of the country, or foreign boats in to assist with the clean up! “Never waste a good crises”….remember those words! Well, now he has engineered one to help him push Cap and Tax!
    Wonder what the next one will be?

    #8
  9. rick

    Cap and Trade would be horrible for our local economy, and I hope this bill gets killed.
    · $2,872 per family per year in increased
    energy costs (Listen to what Obama
    admits here and what it means here)
    · $4,600 per family per year total
    increased taxes.
    · $662 billion a year loss of GDP or
    $6,790 per family of four.
    · Each family of four’s share of the debt
    accumulated by cap and trade would
    be equal to $114,915
    · $5.7 Trillion in increased taxes
    · $9.4 Trillion total GDP cost thru 2030.
    · $4.35 to $5.10/gallon gas price.
    · 57% lower profits for farmers
    · Up to 6 Million lost jobs (based on Spanish experience)
    · 2.2 jobs lost for every green job created (Spanish experience)
    · $750,000+ cost for every green job created
    · Devastating to 3rd World Nations
    Concerning the reaction to the spill: The moratorium placed on drilling will cost more jobs and money than the spill itself. The spill is a tragedy and has to be cleaned up and have reparations made to all who suffered due to it.
    However banning offshore drilling does not clean up the spill, get us off of foreign oil, lower the price of energy, or help those who are now suffering due to the effects of this enviormental disaster. The ban on drilling limits future supply which means it will drive th price up. It ensures that we will have to import more oil from our enemies. It ultimately costs tens of thousands of jobs and billions upon billions of exogeneous dollars that it brings into the gulf coast economies. The ban on drilling will cost more than the spill itself. This is put in place during the worst economy since the great depression….Its nothing more than politcal posturing at the expense of tens of thousands of families, and further dependence on foriegn oil.

    #9
  10. Mike

    We are near the end of the last Ice Age. How do you think the Great Lakes got there. And now we think man made carbon has created global warming! We should be a better steward of the earth’s resources, but Cap & Tax is just a front for some priveleged folks to make a lot of money. When we come up with an alternative energy to fossil fuel that can be produced and consumed without a subsidy that is cheaper than oil, we will win that day. But until then, everything else is just a political scheme that will fall on its face because most of the other nations, especially China, are not going there.

    #10
  11. Mike

    The only thing that will be accomplished by enacting a climate change bill would be the mass exodus of 8 million energy-related jobs to China and India, along with rest of our heavy manufacturing base. How is that good for anybody (except maybe the Chinese) in America is beyond me.

    #11
  12. Tucker

    Hey “me” – thanks for contributing to the discussion. Your thoughts are insightful and helpful to a mature, intelligent discussion of a critical issue. Good work.
    No go crawl back in your hole, you cretin.

    #12
  13. FrayPollo

    C&T is a terrible idea. It is based on several false assumptions. First, that the US is the main producer of so-called greenhouse gases. Second, that radical reductions in US CO2 outputs will have any environmental effect. Third, that a Demo-controlled Congress will pass any law that is good for the US. Liberals hate America. They love C&T because it is bad for America. Never trust a liberal. They are lying parasites.

    #13
  14. newshound-1

    A Second Wind for Cap-and-trade?
    ==========================
    And boy does it stink. And Cap-and-Tax is a much more accurate name.

    #14
  15. TC TRAV

    Just about the only thing us peons can do write our local reps… http://www.voicesforenergy.com has the email, phone, and addresses of all our reps in this area along with a choice to send a pre-written letter to the rep of your district against cap and tax… please join the team and visit the site. sincerly, a local energy industry worker

    #15
  16. houstoncurmudgeon

    Cap and Trade – the evil boogy man, what a spoon fed crock.
    We need to regulate, yes regulate, deep water drilling like we regulate air travel – no room for error.

    #16
  17. Hemified

    ahh I think this is the third or fourth try. I guess they see some republicans are for some Oil Regulations to get the Gulf back on track and they think they can throw the extra pork belly bill and pass it. No mind its a huge bill that will only be a expense for consumers( me and you ) with really no plan to reduce any Pollution. Most of you think the gulf drilling is a RepublicanDemocrat thing, when this whole spill probably should have been stopped by day three. yet they really only looking at the hole and how much money can be made. BP setting up a 20 billion dollar Fund , should have told you that. Anyway good luck with that , I’m hoping we vote them all out of office, and get back to the basics of Representatives actually representing, not selling theirs votes for campaign contributions.

    #17
  18. The Drill is Gone

    There will be so many loopholes in any new regs, one
    shouldn’t worry. Watered down with a twist of oil.

    #18
  19. RogueOne

    Ok class repeat after me:
    If anyone actually WANTED to create real change to energy policy, environmentalists and sovreignty proponents alike would understand 3 simple rules:
    1) all energy produces unwanted waste, from heavy water, to spent batteries, to air, water and/or soil pollution, it is inevitable,
    2) all energy solutions are regional, wind does not work in suburban settings, solar does not work in Seattle, geothermal heat pumps are inefficient in humid climates and biofuels are only suitable where uncultivated lands can be used, keeping present food production at peak production,
    3) all energy solutions must be based on redundancies, for example; cars can run on both natural gas and electric power, or both gasoline and fuel cell. Homes can create their own electricity thru solar, geothermal, wind etc. but must also be backed up by centralized grids of nuclear, etc. power stations as well as individual energy storage.
    This is all very expensive by must be accepted. The political issue is that the powers that be want tax payers dependent on singular centralized monopolies of power production so that they will always be controlled. Only when we realize that our freedom will come in a free market of resources that will create its own price and supply controls can we begin to solve this issue.
    The good news is whale watchers and sheik haters alike can agree that our energy independence is good for America. Let us build on that.
    Oh and by the way, cap and trade is another way of encouraging urbanization, and guess which political party that benefits? Surely that is an inintended consequence huh? LOL

    #19
  20. Joe

    Harry Reid is an idiot and needs to retire.

    #20