[Vision2020] July 23, 2010, Wall Street Journal: "Senate Halts Effort to Cap CO2 Emissions"

[Ted Moffett]

"The Age of Stupid" unfolds, as fossil fuels continue to rule our economy,
government and way of life...  http://www.ageofstupid.net/
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http://online.wsj.com/article/SB10001424052748703467304575383373600358634.html

 JULY 23, 2010 Senate Halts Effort to Cap CO2 Emissions Democrats Forgo
Centerpiece of President Obama's Energy Plan, as Cap-and-Trade Fails to Lure
Broad Support in Congress By STEPHEN
POWER<http://online.wsj.com/search/term.html?KEYWORDS=STEPHEN+POWER&bylinesearch=true>

Senate Democratic leaders Thursday shelved their effort to cap
greenhouse-gas emissions as part of a broad energy bill, putting aside
indefinitely a centerpiece of President Barack Obama's ambitious effort to
transform the way Americans produce and consume energy.

The proposal would have allowed utilities to trade permits to pollute as
they worked to shift away from coal—a concept commonly called "cap and
trade."

Senate Majority Leader Harry Reid said Thursday that neither he nor the
White House had managed to line up 60 senators to support even a limited
proposal seeking to cap carbon-dioxide emissions from electric power
companies.

Mr. Reid refused to declare the idea dead. But Thursday's decision called
into question when or whether any legislated cap on greenhouse-gas emissions
would reach Mr. Obama's desk.

Now, businesses, such as wind-turbine makers, that had bet on a
greenhouse-gas provision to make alternatives to coal and oil more
cost-competitive must recalculate how long it might take for that to happen.


But industries that opposed congressional action to limit greenhouse-gas
emissions still have to reckon with uncertainty over how far the
administration may push an effort to do the same thing via the Clean Air Act
and the Environmental Protection Agency.

Advocates of the cap-and-trade approach say that making it more expensive to
burn coal or oil would encourage investments in new technology that reduces
greenhouse-gas emissions and energy consumption, resulting in lower energy
costs overall and avoiding the potential long-term toll of climate
disruptions on the economy. Some also argue putting a price on carbon can
ahelp reduce reliance on foreign oil. Opponents of such legislation dispute
this.

Opponents say compelling utilities to pay for emitting carbon dioxide would
force them to pass along those costs to consumers in the form of higher
prices. Republicans branded a House bill that proposed an economy-wide
system for capping carbon dioxide emissions a "job-killing energy tax."

Senate Republicans closed ranks in opposition to even limited use of such
mechanisms as the clock ticks down to the November elections.

But a limited cap-and-trade proposal backed by Mr. Reid and the White House
also failed to win over a cadre of conservative Democrats from industrial
and coal states, who opposed the idea of imposing caps and higher costs on
the use of coal and other fossil fuels.

Some also worried that the measure would put U.S. manufacturers at a
disadvantage to rivals in China, now the No. 1 consumer of energy according
to the International Energy Agency.

China's role in the U.S. debate over climate change cuts both ways.
Opponents of capping emissions say enacting such policies would put the U.S.
at a competitive disadvantage to China, which has refused to cap its
emissions. Advocates of capping emissions say that unless the U.S. puts a
price on carbon, it will lose out to China in the race to develop the energy
technologies —and jobs—of the 21st century.

Mr. Reid said Democrats will push for more limited energy legislation, aimed
at holding BP PLC accountable for the oil spill, providing incentives to the
production and purchase of natural-gas vehicles and funding land and water
conservation.

The Senate's inaction leaves Mr. Obama's Environmental Protection Agency
administrator, Lisa Jackson, in charge of setting federal limits on
greenhouse gases. Ms. Jackson has already adopted rules limiting emissions
from cars and requiring state regulators to account for such emissions when
they issue air-quality permits to large refineries and manufacturing
facilities.

The agency's authority to do so is under assault. Business groups have sued,
challenging the legality of EPA proposals to regulate greenhouse-gas
emissions. And a group of Democrats is pushing legislation to bar the agency
for two years from regulating emissions from stationary sources.

Utilities now will be forced to make long-term decisions without knowing how
carbon dioxide will be treated, said Mike Morris, chief executive of
American Electric Power, Columbus, Ohio.

He said that for the next few years, utilities likely would build gas-fired
power plants, which have about half the carbon emissions of plants burning
coal. But the cost of nuclear energy will be relatively more costly without
a penalty imposed on fossil-fuel use.

Uncertainty over the future price of carbon and what sorts of technology the
EPA will require already is having a "chilling effect" on investment in the
steel industry, said Thomas Gibson, a former EPA official who now heads the
American Iron and Steel Institute.

But other business could be chilled if Washington abandons entirely the idea
of raising the price of consuming fossil fuels. Companies trying to develop
and sell solar and wind energy technology, energy-conservation systems or
electric vehicles have hoped that caps on greenhouse gas emissions would
jump-start demand.

These companies will now focus on certain states that have their own
clean-energy mandates, such as California, Colorado and New Jersey, said
Angiolo Laviziano, chief executive officer of REC Solar Inc., a provider of
solar systems in San Luis Obispo, Calif.

Still, the solar industry is growing at the rate of about 40% a year in
terms of electrical power installed and is likely to continue to grow, said
Ron Kenedi, vice president of Sharp Corp.'s Sharp Solar Energy Solutions
Group in Huntington Beach, Calif.

Mr. Reid's decision to pull cap-and-trade from the energy bill could
reverberate on Wall Street, where banks and brokerage firms had been
anticipating climate legislation that would lead to widespread trading of
carbon "credits."

There is already a global carbon-trading market, with the majority of the
trading taking place in the regulated European markets. It amounted to $127
billion last year.

It isn't clear how many of the provisions Mr. Reid is promising to include
in the narrower energy bill will survive a Senate floor debate. Republicans
have objected to Democrats' proposals to eliminate the cap on oil companies'
liability for damages related to spills, currently $75 million, saying the
proposals, as written, would make offshore drilling unaffordable for all but
the largest oil companies and foreign-owned nationalized oil giants. Some
business groups are also rallying to defeat the provisions related to
natural gas.

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