In this issue:

 

 

EPA AND DOT PROPOSE NEW CAFE STANDARDS FOR PASSENGER CARS

The U.S. Environmental Protection Agency (EPA) and the Department of Transportation (DOT) on November 16th proposed new fuel efficiency standards that would require a fleet-wide fuel efficiency of 54.5 miles per gallon (MPG) for 2025, an increase of about five percent annually for passenger cars. The lower target of 44 MPG by 2025 would apply to light trucks, while passenger cars would have to meet a 62 MPG target. In a press release, DOT estimated that the proposed standards alone would slash oil consumption by four billion barrels and cut two billion metric tons of greenhouse gas pollution over the lifetimes of the vehicles sold in those years.

The proposal was initially announced in late July.  Raising the corporate average fuel economy (CAFE) standards for vehicles was once politically anathema, but the passage of the Energy Independence and Security Act (P.L. 110-140) in 2007 brought up the standards for the first time in three decades to an average of 35 miles per gallon by 2020.  The law also increased the biofuels mandate to 36 billion gallons by 2022 (please see the December 20, 2007 and the August 1, 2011 Editions of Capitol Update for more information).      

Not everyone is on board with the new proposal.  House Government Reform Committee Chair Darrell Issa (R-CA) believes that the Administration may have leaned on automotive manufacturers, at the expense of consumers, to make this push to improve vehicle fuel efficiency.  He has already held one hearing on the CAFE standards proposal, and has promised to continue investigating the decision. 

In total, 13 major automakers, representing more than 90 percent of all vehicles sold in the U.S., have agreed to build on the first phase of the national vehicle program. EPA and DOT worked closely with a broad range of stakeholders to develop the proposal, including manufacturers, the United Auto Workers, the State of California, and consumer and environmental groups.

There will be an opportunity for the public to comment on the proposal for 60 days after it is published in the Federal Register. In addition, DOT and EPA plan to hold several public hearings around the country to allow further public input. California plans to issue its proposal for model year 2017-2025 vehicle greenhouse gas standards on December 7, and will finalize its standards in January 2012.

For more information about NHTSA and EPA’s announcement, please visit: http://www.nhtsa.gov/About+NHTSA/Press+Releases/2011/We+Can't+Wait:+Obama+Administration+Proposes+Historic+Fuel+Economy+Standards+to+Reduce+Dependence+on+Oil,+Save+Consumers+Money+at+the+Pump

To review NHTSA and EPA's Notice of Proposed Rulemaking, please visit: http://www.nhtsa.gov/fuel-economy

Robert Rains handles public policy-related energy issues for ASME.  He can be reached at: rainsr@asme.org

 

 

SENATORS CALL FOR ONE-YEAR DELAY BEFORE FINALIZING "UTILITY MACT" RULE

In a letter dated November 14, Senators Lisa Murkowski (R-AK) and James Inhofe (R-OK) called on EPA and the White House Office of Information and Regulatory Affairs (OIRA) to delay finalizing the “Utility MACT” rule for one year so that concerns about the rule’s effect on grid reliability could be addressed. Currently, the rule is scheduled to be finalized on December 16, 2011. 

The letter calls upon EPA and OMB to answer questions that have been pending for months, and asks new and potentially disturbing questions about EPA's decision last spring to avoid public comment on the potential reliability impacts of the major Utility MACT rule. “After months of ignoring requests that EPA take additional time to study and address the Utility MACT rule’s impact on electric reliability, the agency only recently agreed to a 30-day extension for promulgating the rule,” Murkowski and Inhofe wrote. “The 30-day extension represents EPA’s first acknowledgement that the November deadline was unrealistic.”

Senators Murkowski and Inhofe also wrote to Administrator Jackson on August 3 (http://energy.senate.gov/public/_files/080311LAMLettertoEPA.pdf), August 16 (http://epw.senate.gov/public/index.cfm?FuseAction=Files.View&FileStore_id=bbb0f20f-7475-420c-9820-08b0565dbff8) and September 7 (http://energy.senate.gov/public/_files/090711LAMLettertoEPA.pdf) concerning EPA's Mercury and Air Toxics standards or “Utility MACT” rule.

The EPA has not responded to the questions raised in those letters. In these earlier letters, the senators asked about potential impacts the Utility MACT rule could have upon electric reliability. The senators were seeking facts surrounding the agency’s consideration of reliability issues as it developed the rule.

In 2010, the EPA revised its draft standards after industry groups said the regulations were unworkable.  Since the final rules differ so much from the draft rules, EPA opened up, and extended, a reconsideration period in which the public can comment on and review the final standards.
Earlier this year, the EPA received more than 4,800 comments from businesses and communities regarding the Utility rule. Based on that input, EPA made revisions to the standards, and in December 2010 requested additional time for review to ensure the public’s input was fully addressed (Please see the May 25, 2011 Edition of Capitol Update).  The new date for the final rule is now April 2012.    

According to the EPA, the boiler Maximum Achievable Control Technology (MACT) rule will cover about 13,555 boilers and process heaters at about 1,600 major source facilities.  Although this is mostly industrial facilities, it will also include “small entities,” universities, municipalities, and military installations.  These rules would seek to significantly cut emissions of different air pollutants including cadmium, dioxin, furans, formaldehyde and hydrochloric acid.

This most recent letter, available at http://energy.senate.gov/public/_files/110911LAMLettertoEPA.pdf, asks for answers to the unanswered questions and raises new ones, including questions about information from the public record that leads to additional questions about apparent decisions to exclude electric reliability as subject of public comment.

Robert Rains handles public policy-related environmental issues for ASME.  He can be reached at: rainsr@asme.org

 

 

ENERGY AND NATURAL RESOURCES COMMITTEE HOLDS HEARING ON DOE'S QTR

On November 15, the Senate Committee on Energy and Natural Resources held a hearing to receive testimony on the Department of Energy’s (DOE) Quadrennial Technology Review (QTR), as well as two bills pending before the Committee: S.1703, the Quadrennial Energy Review Act of 2011; and, S.1807, the Energy Research and Development Coordination Act of 2011.

The President’s Council of Advisors on Science and Technology (PCAST) had previously recommended that DOE undertake its first QTR with the purpose of providing a framework for understanding, discussing and establishing energy-technology priorities.

On behalf of the Obama Administration, Steven E. Koonin, DOE Under Secretary for Science, summarized the initial QTR as highlighting six strategies, three in the transportation sector and three in the stationary sector:

  • Vehicle Efficiency: Improving vehicle efficiency is one of the most effective short-term routes to reduced liquid fuel consumption;
  • Vehicle Electrification: Hybridization of the vehicle fleet can help reduce oil consumption at the pump in the near- and mid-term; full electrification would decouple light-duty vehicles from the global oil market;
  • Alternative Hydrocarbon Fuels: Since the heavy-duty vehicle sectors face significant barriers to electrification, this part of the fleet will always rely to some extent on portable, high energy density fuels;
  • Energy Efficiency in Buildings and Industry: Increasing energy efficiency has net

economic advantages because energy expenditures decrease for the same level of service;

  • Grid Modernization: The U.S. needs a 21st Century electrical grid to provide needed  stability and to integrate new forms of energy; and,
  • Clean Electricity: Multiple generating technologies with diverse characteristics at varying stages of maturity make it difficult to prioritize the clean electricity research portfolio.

Koonin completed his statement by saying, “The QTR has been, at its core, about developing the principles that will help inform those difficult choices between different technically viable approaches that cannot all be pursued. Mere technical promise that something could work is an unjustifiably low bar for the commitment of DOE R&D funds. As every dollar matters, we must give priority in our research portfolio to those technologies that are most likely to have significant impact on timescales commensurate with the urgency of national energy challenges.”

The Committee also heard testimony on S. 1703, a bill which would mandate that a comprehensive review of the energy programs and technologies of the Federal Government be conducted every four years.

The second bill under consideration by the Committee at its November 15th hearing was S. 1807, the “Energy Research and Development Coordination Act of 2011.” That bill would create an independent National Energy Coordinating Council, co-chaired by the director of the White House Office of Science and Technology Policy and the Secretary of Energy. Members of the Council would include the director of the Office of Management and Budget and the heads of any agency with a budget for energy R&D in excess of $10 million. The council would also:

  • Produce a government-wide plan to achieve solutions to problems in energy supply, transmission and use, including associated environmental problems, in the short, the medium and the long term; and,
  • Prepare a consolidated budget proposal and budget guidance to the agencies for each fiscal year to implement its comprehensive plan.

Information on the hearing, as well as an archived video of the hearing itself, may be viewed at: http://energy.senate.gov/public/index.cfm?FuseAction=Hearings.Hearing&Hearing_ID=7e8a54f0-be5c-c424-317c-d9e866562ee2

To read the text of either S. 1703 and/or S. 1807, go to http://thomas.loc.gov and search by bill number.

Robert Rains handles public policy-related energy issues for ASME.  He can be reached at: rainsr@asme.org

 

 

CONGRESS APPROVES AGRICULTURE – CJS – TRANSPORTATION "MINIBUS"

On Thursday, November 18th, Congress approved the FY 2012 “minibus” (House Report 112-284) authorizing funding for the Departments of Agriculture and Transportation, as well as funding for those agencies under the umbrella of the Commerce, Justice and Science Appropriations Subcommittee. The package also contains a Continuing Resolution (CR) to avoid a government shutdown and continue federal operations until December 16, 2011, or until Congress completes the remaining nine FY 2012 Appropriations bills. The “minibus” was approved by a vote of 298 to 121 in the House of Representatives and 70 to 30 in the Senate. 

A summary prepared by the House Appropriations Committee highlights:

  • Commerce, Justice, Science – The CJS section of the conference report includes a base total of $52.7 billion, a decrease of $583 million below last year’s level, and a decrease of almost $5 billion below the President’s request.
  • Patent and Trademark Office (PTO) – The bill provides $2.7 billion for the PTO, the full requested level. This amount is $588 million, or 28 percent, above last year’s level. The bill also includes language that allows PTO to keep and use excess fees should actual collections exceed estimates, subject to Congressional approval of spending plans.
  • National Institute of Standards and Technology (NIST) – NIST is funded at $751 million – a 0.1 percent increase - including $33 million above last year’s level to support core NIST scientific research programs that help advance U.S. competitiveness, innovation, and economic growth. In addition, funding for the Manufacturing Extension Partnership Program, which provides training and technical assistance to U.S. manufacturers, is maintained at last year’s level of $128 million.  No funding was allocated for NIST’s Technology Innovation Program (TIP), but Congress provided no language preventing account transfers to support TIP.
  • National Aeronautics and Space Administration (NASA) – NASA is funded at $17.8 billion in the conference agreement, which is $648 million or -3.5 percent below last year’s level and $924 million below the President’s request. Highlights include:
    • $3.8 billion for Space Exploration, which is $30 million below last year. This includes funding above the request for NASA to meet Congressionally mandated program deadlines for the Multi-Purpose Crew Vehicle and Space Launch System.
    • $4.2 billion for Space Operations, which is $1.3 billion below last year’s level. The agreement continues the closeout of the Space Shuttle program for a savings of more than $1 billion.
    • $5.1 billion for NASA Science programs, which is $155 million above last year’s level. The agreement accommodates cost growth in the James Webb Space Telescope (JWST) by making commensurate reductions in other programs, and institutes several new oversight measures for JWST’s continuing development.
    • Language prohibiting NASA or the Office of Science and Technology Policy from engaging in bilateral activities with China unless authorized by Congress.
  • National Science Foundation (NSF) – The legislation funds NSF at $7 billion, which is $173 million or 2.5 percent above last year’s level but $734 million below the President’s request. Within this funding, NSF’s core research program is increased by $155 million to enhance basic research critical to innovation and U.S. economic competitiveness.

The summary of the conference report is available at: http://appropriations.house.gov/UploadedFiles/11.14.11_Minibus_-_Detailed_Summary.pdf

The full 401-page conference report may be read at: http://www.rules.house.gov/Media/file/PDF_112_1/Committee%20Jurisdiction%20Reports/CR2112%201114s.pdf

Paul Fakes handles public policy-related research and development (R&D) issues for ASME.  He can be reached at: fakesp@asme.org

Melissa Carl handles public policy-related science, technology, engineering, and mathematics (STEM) education issues for ASME.  She can be reached at: carlm@asme.org

 

 

SECRETARY OF ENERGY ADVISORY BOARD (SEAB) SUBCOMMITTEE ON SHALE GAS PRODUCTION POSTS DRAFT REPORT

The Secretary of Energy Advisory Board (SEAB) Subcommittee on Shale Gas Production released its second and final ninety-day report reviewing the progress that has been made in implementing the twenty recommendations in its initial report of August 18, 2011. 

The Subcommittee was tasked with producing a report on the immediate steps that can be taken to improve the safety and environmental performance of shale gas development. The Subcommittee believes that these recommendations, if implemented, would help to assure that the nation’s considerable shale gas resources are being developed responsibly, in a way that protects human health and the environment and is most beneficial to the nation.

The Subcommittee’s concluded that if action is not taken to reduce the environmental impact accompanying the very considerable expansion of shale gas production expected across the country – perhaps as many as 100,000 wells over the next several decades – there is a real risk of serious environmental consequences and a loss of public confidence that could delay or stop this activity.  The Subcommittee also cautioned that whether its approach is followed or not, some concerted and sustained action is needed to avoid excessive environmental impacts of shale gas production and the consequent risk of public opposition to its continuation and expansion.

SEAB Subcommittee Chairman John Deutch, an MIT professor, said, “The development of shale gas is one of the biggest energy innovations, if not the biggest, in several decades,” continued Deutch. “It is now about 30 percent of total U.S. natural gas production; it has reduced energy costs and created hundreds of thousands of jobs. But to ensure the full benefits to the American people, environmental issues need to be addressed now – especially in terms of waste water, air quality, and community impact. We believe that our twenty recommendations provide the basis for a pragmatic route forward and hope that they will be acted upon.”

Both SEAB Subcommittee reports are available at: http://www.shalegas.energy.gov/index.html

Robert Rains handles public policy-related energy issues for ASME.  He can be reached at: rainsr@asme.org

 

 

IEA RELEASES "WORLD ENERGY OUTLOOK 2011"

The International Energy Agency (IEA) has released its “World Energy Outlook (WEO) 2011,” an annual publication which looks at how the energy system will evolve in the next 25 years, taking account of the broad policy commitments that have already been announced by countries around the world to address climate change and growing energy insecurity.  WEO 2011 concludes that without a bold change of policy direction, the world will lock itself into an insecure, inefficient and high-carbon energy system.

The WEO also focuses on the climate change issue with an assessment of what infrastructure "lock-in" means for maneuverability to meet the two degrees Celsius goal, the potential implications of a rapid slowdown in the use of nuclear power for the global energy landscape, the role of coal in an emissions-constrained world and the consequences on global energy markets of a possible delay in oil and gas sector investment in the Middle East and North Africa. The report includes a review of energy in Russia, looking at the trends in domestic energy markets, supply prospects and its implications for global energy supply.

Among the report’s other findings are the following:

  • Primary energy demand increases by one-third between 2010 and 2035, with 90 percent of the growth in non-OECD economies;
  • China consolidates its position as the world’s largest energy consumer: it consumes nearly 70 percent more energy than the United States by 2035, even though, by then, per capita demand in China is still less than half the level in the United States;
  • The share of fossil fuels in global primary energy consumption falls from around 81 percent today to 75 percent in 2035;
  • Renewables increase from 13 percent of the mix today to 18 percent in 2035;
  • The growth in renewables is underpinned by subsidies that rise from $64 billion in 2010 to $250 billion in 2035, support that in some cases cannot be taken for granted in this age of fiscal austerity;
  • Oil demand rises from 87 million barrels per day (mb/d) in 2010 to 99 mb/d in 2035, with all the net growth coming from the transport sector in emerging economies;
  • The use of coal, which met almost half of the increase in global energy demand over the last decade, rises 65 percent by 2035; and,
  • Nuclear output rises by over 70 percent by 2035, only slightly less than projected last year, as most countries with nuclear programs have reaffirmed their commitment to them.

Fact sheets describing specifics of WEO 2011 may be viewed at: http://www.worldenergyoutlook.org/docs/weo2011/factsheets.pdf

A video of the press conference is available at: http://www.iea.org/multimedia/videos_info.asp?filename=IEA_Presentation_Lon_39B43C.flv

Additional information is available at: http://www.worldenergyoutlook.org/

Robert Rains handles public policy-related energy issues for ASME.  He can be reached at: rainsr@asme.org

 

 

BIPARTISAN POLICY CENTER ANNOUNCES NEW INITIATIVE ON DELIVERING ELECTRIC SYSTEM RELIABILITY AND CLEAN TECHNOLOGY

The Bipartisan Policy Center (BPC) recently announced the formation of a new Initiative on Delivering Electric System Reliability and Clean Technology. The Initiative will be co-chaired by former Rep. Rich Boucher (D-VA), former Federal Energy Regulatory Commission (FERC) chairman Curt Hebert, Jr., and Allison Clements, director of the Project for Sustainable FERC Energy Policy at the Natural Resources Defense Council (NRDC).

As state renewable energy standards, federal energy and environmental policy, and energy market conditions continue to drive retirements of some older power plants and deployment of new and often cleaner energy sources, decisions made by FERC will have important implications for the reliability, efficiency, and cost of a more modern and efficient grid. FERC is in the midst of several rulemakings and inquiries that will begin to shape the grid of the future.

In light of these developments, BPC is convening the Initiative to develop recommendations on the role that FERC can play in removing barriers to the delivery of cleaner electricity and new energy technologies to the market while adhering to its important obligation to ensure electric system reliability. The Initiative will also look toward economic incentives and opportunities that stimulate market growth and inspire infrastructure development.

The BPC Initiative on Delivering Electric System Reliability and Clean Technology will recruit a diverse group of key stakeholders to participate on the Initiative. Initiative members are likely to be drawn from energy companies, public utility commissions, RTOs/ISOs (Regional Transmission Organizations, and Independent System Operators), academia, and advocacy groups, among others.

In 2007, former U.S. Senate Majority Leaders Howard Baker, Tom Daschle, Bob Dole, and George Mitchell formed the Bipartisan Policy Center (BPC) to develop and promote solutions that can attract the public support and political momentum to achieve progress. Currently, the BPC focuses on issues including health care, energy, national and homeland security, transportation, and economic policy.

In April, the BPC scrapped its National Energy Policy Commission and re-launched a new energy policy mission under their umbrella.  This initiative is lead by former Senators Trent Lott and Byron Dorgan.  General James Jones, former National Security Advisor to President Obama, also serves as National Security Chair, and William K. Reilly, a former EPA Administrator under President George H.W. Bush, serves as Energy and Environment Chair. 
The Initiative will release final recommendations at the end of 2012, and may also release interim findings over the course of its deliberations.

For additional information, go to: http://www.bipartisanpolicy.org/news/press-releases/2011/11/bpc-announces-initiative-delivering-electric-system-reliability-and-clea

Robert Rains handles public policy-related energy issues for ASME.  He can be reached at: rainsr@asme.org

 

 

THE ARTICLES CONTAINED IN CAPITOL UPDATE ARE NOT POSITIONS OF ASME OR ANY OF ITS SUB-ENTITIES, UNLESS SPECIFICALLY NOTED AS SUCH. THIS PUBLICATION IS DESIGNED TO INFORM ASME MEMBERS ABOUT ISSUES OF CONCERN BEING DEBATED AND DISCUSSED IN THE HALLS OF CONGRESS, IN THE STATES, AND IN THE FEDERAL AGENCIES.

ASME Government Relations
1828 L Street, NW, Suite 906
Washington, DC 20036