So Explain This: The House of Representatives’ Energy Bill
Posted by J. Alexander Mitchell on 06.29.2009
Job Killer or Eco-Revenue Generator?
I wrote an article in early April about the "Cap and Trade" system and its possible implementation here in the United States through Senate reconciliation. Some of the details have changed since then – most specifically the elimination of reconciliation as a way to force the legislation through the Senate – but the bill is back and more pressing than ever; a House version of the legislation passed 219-212 with a mere spattering of Republican support and even , a Democratic Representative Rep. Patrick Kennedy, checking himself out of rehab to vote for the measure. The vote was very important, as Speaker of the House Nancy Pelosi has gone on record as stating this was her "flagship issue" while Republican leader John Boehner said of the bill that it is "the biggest job-killing bill that has ever been on the floor of the House of Representatives". The vote was so important that, as of Monday, June 29th, the major news sites (CNN.com, MSNBC.com, and FoxNews.com) all had Bernie Madoff or Mark Sanford as their lead stories.
Perhaps that last bit isn't quite as supportive of how important this seems to be.
In either case, this appears to be major legislation that will have huge ripples of effect; the only question is whether or not these ripples will be positive, negative, or both. So I find myself reiterating a previous question I asked – is this bill a problem?
I will quote my previous article for a short summary of how cap and trade works: "The government would set specific limits as to how much greenhouse emissions (i.e. the carbon dioxide released into the atmosphere from things like, say, using coal to create electricity) a given company can generate. A given company would be given a certain number of "credits" that can be "spent" to be allowed to… well, pollute more. If a company can stay under environmentally friendly standards, nothing really changes, and, in fact, they may "re-sell" their credits for a profit. Conversely, if a company is over the limit, they can either reduce their carbon emissions or buy credits from a company that isn't using them.
Here is where your electric bill gets hit: In order to buy the credits, they must spend more money beyond the amount spent on typical work. Of course, they are not simply going to eat the loss to their profit margin, so the price gets passed on to the consumer. Ergo, you end up with a higher power bill.".
There was a fairly scathing commentary in the Wall Street Journal about the subject, specifically citing the fact that the people most affected by increased energy bills. Though the article does seem to have holes (it states that the $800 Making Work Pay credit wouldn't cover the increased costs for the poorest families, but also says that the bottom quintile of homes would see an increase of $680), it does summarize the general discontent – if you are from an area of the country that uses coal as your primary energy source, you will be hit harder by this legislation than if you are not.
On the other hand, this legislation may spur new solutions that drive the marketplace in very positive directions. I mentioned Green Mountain Energy previously as an example of a company that will take advantage of this sort of legislature to fill the void created by the conventional companies; indeed, one of the pillars to the Obama administration's employment plans is the expansion of "green" jobs. Time Magazine also cited another possibility – decoupling utility profits from sales volumes as seen in the Pacific Northwest. The article states that the energy companies, in that situation, have more of an incentive to be efficient, and, as a result, power usage has flatlined.
Of course, the article also tosses out another solution for those with electric bills that are too high – use less. This is not the best solution for everyone, but it may be a good start.
I am, however, neither an economist nor an expert on energy, so I will toss this out to the readers – is the cap and trade program an idea which will gut the Midwest and areas like Pennsylvania, or is it a revenue generator which simultaneously helps the environment and spurs a new industry?
What we need is a bill that gooses the private sector to invest in developing clean, renewable energy. This bill fails completely by keeping the status quo the best business decision.
There are two general directions to choose from: incentives or punishment. Fines are passed on to consumers and won't work. We should use government contracts as incentives. For example, offer to buy a fleet of military vehicles that run on clean fuel. That would lead to a board meeting where R&D costs look viable due to the huge profit to be made on the back end.
Making the same dirty energy sources more efficient won't work in the long term because ever increasing populations mean at best the total pollution created will be about the same and always threatening to rise. Solar, wind, and quite possibly a technology we can't even conceive today are the way forward. No matter how clean oil, coal and gas can ever be burned, they are finite. Nuclear comes with too many security risks to proliferate it.
Posted By: Shockmaster (Guest) on June 29, 2009 at 01:54 PM
Shockmaster - are you basically saying that the bill doesn't go far enough?
Posted By: J. Alexander Mitchell (Guest) on June 29, 2009 at 03:47 PM
Since you asked.
It makes no sense- most towns have one energy company to draw power from. It's not like people can turn around and say that they want wind power instead of coal if no wind power is established.
There was a recent WSJ report that clearly states that Man Made Global Warming is a myth. It's not the an editorial- it's the governments of Austraila, Swenden, Norway, Finland- etc.
They claim that while some ice has melted in some parts of the world they have increased just as much in others.
It also has interviews with several UN scientists who claim that they had to follow the party line while in positions- but since returning to teach/research they have recanted their positions.
It states that some 700 climatologist disagree with 70 that the US/UN have hired to conduct their studies.
Now- I studied bilogical anthropolgy, my first degree was in evoluationary science...the Earth is STILL in a coldsnap.
Any warming- which is minimal- is only the Earth retuning to a natural state. We have been in a cooling state for the last hundred thousand years.
The "Ice Age" caused ice glaciers to move all the way down to Texas...if this was happening now would we be quick to stop it- how could we?
This is a TAX- Cap and Trade is a TAX...nothing more.
It is being used to pay for all of Obama's little plans- and it was first thought up by Gore to pay for all his plans should he had been elected eight years ago.
The aresols that destroyed pockets of the Ozone layer have almost all been removed from production...
But turning to waterbased fuel/engines- the only real power that could replace oil- would put hydrocarbons into the air.
Hydrocarbons are greenhouse gases. They would result in man-made climate change on a drastic scale.
Wind is another alternative but if anyone has been out to southern California knows it takes thousands set up everywhere to put out a fraction of the power of coal or oil.
Solar power is great in Arizona, but again- you're talking billions of dollars to make- and then where to put them. And you only get a fraction of the power.
The science does not make sense- the tax does...its going to pay for everything that Obama wants.
And its going to pass right into our pockets- and it will destroy the jobs of the millions of Americans who work in energy, cars, transportation, farming, retail- you name it.
Because all those costs will get passed on to us- less money to spend on retail, investments, whatever- all to pay for shitty healthcare that is run by the government...
If it was such a slamdunk then you would think that the entire democratic side of the house would have voted for it- it passed by a half a dozen votes.
It's nonsense.
Posted By: The Spook (Guest) on June 29, 2009 at 04:43 PM
The problem with green energy right now is that it is too expensive. I would love to get solar powered energy, but I am not paying the thousands upon thousands of dollars to get it. Same goes with hybrids. The problem is the bill doesn't help consumers. Instead of saying households need to pay $200 a month for this thing, they need to come with a deal like they are doing with prescription drugs to help lower the cost.
The real problem is a bill like this should have been passed in the 1990s instead of Republicans saying global warming doesn't exist and peddling nuclear energy like the snake oil that it is. This has been the only fight the GOP looks to win even though in the final analysis we do need to get off our ass and create new energy. My electric bill is going do triple in 2010 and the last thing I need to do is spend another $200 a month for this to work. The GOP will look stupid in a few key states too when this falls and the energy cost brings another recession. We need to do something about it, but this is not the right measure. Obama needs to wait until 2010 when hopefully the economy is back up and try it again. I just pray it can do something before I have to choose between eating or having the heat on. Also, Time magazine and anyone else can blow me for the use less thing. How about investigating price gauging in these companies since electricity hasn't changed in 80 years, but somehow costs more then ever.
Posted By: AFan (Registered) on June 29, 2009 at 04:56 PM
I think it's funny how "Green" industries aren't considered a special interest group. If "green jobs" are the jobs of the future, then we're looking at a very costly, inefficient, federally subsidized future indeed.
Posted By: Guest#8945 (Guest) on June 29, 2009 at 06:30 PM
Cap and trade must be a stupid idea - it comes from the left wing.
It's a wealth transfer tax that will funnel money out of the country and into the hands of 3rd world farmers so they don't modernize.
Posted By: Mikel (too lazy to log in) (Guest) on June 29, 2009 at 11:13 PM
I was going to respond with a lot more, but The Spook basically made every single point I would have made in a more succinct fashion.
The only part that I somewhat disagree with is the actual motive for the bill. Yes, certainly part of it is to gain revenue...but I believe another huge part is to make it look like Congress and the administration are doing something useful and understand the issues by taking basically the easiest option available to them.
I actually agree with the sentence in the article that states, "On the other hand, this legislation may spur new solutions that drive the marketplace in very positive directions." However, I totally disagree that a bill of this scope and magnitude is necessary in any way to spur new solutions.
Posted By: ICTimer (Guest) on June 29, 2009 at 11:24 PM
"How about investigating price gauging in these companies since electricity hasn't changed in 80 years, but somehow costs more then ever."
Epic Econ 101 fail.
Someone better investigate the Twinkie industry! It hasn't changed in 75 years, but somehow costs more than ever!
ZOMG!
Posted By: Guest#5753 (Guest) on June 29, 2009 at 11:26 PM
" is the cap and trade program an idea which will gut the Midwest and areas like Pennsylvania, or is it a revenue generator which simultaneously helps the environment and spurs a new industry?"
Both.
What's odd is that this is a Republican idea from the late 1980s that they never implemented because of the political divide and the Obama team resurrected it only to have it be opposed by conservatives.
There are a handful of problems with it, one of which Spook pointed out - that most communities just don't have a choice. The idea is that, in order to compete, the over-polluters would have to lower their pollution in order to compete with smaller, more energy-efficient companies. If there's no competition, though, they don't have to compete at all.
All of this would be moot if the government would just... wait for it... approve nuclear energy. Our technological resources are such now that it's safer and cleaner than anything else we have.
Posted By: J.D. Dunn (Registered) on June 30, 2009 at 12:22 AM
How is nuke power "snake oil"? It is clean, emits no carbon, and even the French have managedto use it without incident for decades.
Posted By: Chris Connolly (Guest) on June 30, 2009 at 12:27 AM
Spook - can you send a link to the Wall Street Journal article, or give any descriptors to find it? I saw this one (http://online.wsj.com/article/SB124597505076157449.html), but it is very clearly labelled an opinion article.
Posted By: J. Alexander Mitchell (Guest) on June 30, 2009 at 05:12 AM
Regarding nuclear power:
Let's say for argument's sake that expertise is to a point where a meltdown has almost zero chance of happening. There's still the waste it produces. Where do we store it? How do we safely transport it there? How do we know it won't end up in our water supply if we bury it? How can it possibly be secured without burying it? Do we really want a series of high profile terrorist targets created?
Just ask anyone in America if they would like a nuclear plant built near them. Until the above questions can be decisively answered, nuclear is not a serious option.
Posted By: Shockmaster (Guest) on June 30, 2009 at 10:11 AM
All this does is hurt the middle class (shock of shocks) and poor people. Same people that democrats claim they are for protecting, are the same ones that they want to take a big sh|t on. This bill does nothing to help the environment, it is simply to put BILLIONS of dollars into the pockets of Al Gore and his idiots. The Sierra Club left that has hijacked the democrat party for the past 20 years. You want to solve our energy needs... NUCLEAR! The only reason things like Wind and Solar even exist right now is because the government subsidizes. They aren't viable efficient options. California, the "greenest" state, IMPORTS most of it's energy. Exactly what do you think the United State as a whole is going to have to do if it implements Nancy Pelosi policy? You guessed it. Import it. So instead of reducing our dependence on foreign oil, we've increased it. And again... the main concern for ANYONE with a brain should be... who does this legislation hurt the most? And once again... it AINT rich people.
Posted By: gwpbrian (Guest) on June 30, 2009 at 10:50 AM
The point is that manmade global warming is bullshit.
Look- I'm not going to act like we all agree on things, and we should have discourse...
But this Cap and Trade is bullshit. If Global warming is a hoax, then why do we need to have Cap and Trade?
There is confusion on this whole subject- becauce the aresols used in the 1960's - 1980's DID destroy the ozone layer...
But destroying the Ozone layer is not enough for an increase in temperatures- and the United States has since stopped producing those aresols in large capacity.
Destroying the Ozone layer allows more radiation to come in- but does not create a greenhouse effect.
Cap and Trade focuses on stopping greenhouse producing gases- such as the polution put out by coal plants.
The problem is that Cap and Trade pushes for "green energy"- which I fucking promise means hydrocarbons...
Well Hydrocarbon is the BIGGEST greenhouse gas there is. It will jumpstart a greenhouse effect. It will be manmade global warming.
Here is my theory- Gore purposed Cap and Trade years ago (or a varient) and he was going to use it as a tax to pay for all his programs.
Gore loses makes a well produced- but completely false movie about the dangers of global warming...just like "The Day After Tomorrow".
When Obama runs for election- he knows he needs ways to pay for his projects- so he dusts off Cap and Trade for four reasons:
1) Raise revenue
2) Punish historic "Red" states
3) To appease liberal tree huggers
4) To counter Palin's "drill,baby,drill" routine.
But at it's core global warming is not real- and we should find out if something is not real, why do we need to pass a 1,200 page bill in less then a week that will either jumpstart our economy or kill it (but we are not sure which).
None of this makes sense- neither did the bailout or stimulus, and you see how well those worked.
Don't forget that healthcare bill thats going to cost a trillion dollars needs a way to pay for itself.
Obama is killing us with bullshit- and nobody is reading the bills.
Posted By: The Spook (Guest) on June 30, 2009 at 10:51 AM
It's funny how liberals demand cap and trade in America but will ignore the fact that China and India pollute more than we do.
Posted By: Michael (Guest) on June 30, 2009 at 10:57 AM
"Someone better investigate the Twinkie industry! It hasn't changed in 75 years, but somehow costs more than ever!
ZOMG!
Posted By: Guest#5753 (Guest) on June 29, 2009 at 11:26 PM"
Actually...Twinkies have gone from using a banana cream filling to a faux vanilla cream filling. So yeah, they have changed. :P Alright, that's just being nitpicky I know.
Now as far as energy is concerned, my belief is to give private industry incentive to do as such. Any company that can implement such things, give them tax incentives and tax breaks for being innovative. Give them carrots instead of beating them with sticks.
Posted By: MydniteSon (Guest) on June 30, 2009 at 11:07 AM
Dunn and Connolly have it nailed on nuclear energy.
I did not see anything in here about the last minute addition to the bill thats includes having federal inspectors evaluate your home for energy performance before you could sell it.Insanity.
The over reach in this goverment is downright scary into everyones lives.Is this really hope and change everyone wanted?
Posted By: John (Guest) on June 30, 2009 at 11:23 AM
As opposed to the NY Times, where ALL articles are left-wing opinion articles, except they don't label them as such. I love how you libs can read the NY Times and because it doesn't say "Opinion" next to it, absorb it as gospel even though it's being written and edited by Obama kool-aid drinkers. Oh yeah, and dudes who make stuff up like that Jason Lewis character.
Posted By: Da Man (Guest) on June 30, 2009 at 11:27 AM
"Cap and trade must be a stupid idea - it comes from the left wing."
No it doesn't. It came from Reagan economists.
Posted By: J.D. Dunn (Registered) on June 30, 2009 at 12:31 PM
Cap and Trade:
What is it? It is a tax that will funnel money into the government.
Where does the money go? Where the government wants it to go.
Does it specifically go to developing "green energy"? No.
So can it a be a bill that is specifically designed to stimulate green?
No.
Would it make more sense to give tax breaks and incentives to companies developing green energy?
Yes.
By passing this bill, it shows the governemnt's way of thinking. It is about gaining the tax revenue instead of about searching for solutions.
Posted By: Stephen (Guest) on June 30, 2009 at 12:34 PM
Like him or not, in this video Ron Paul quotes a house rep, and that quote should send a shiver of disgust down the spine of every American regardless of how you vote...
"I'm voting yes for this bill...but I hope it doesn't pass"
1200 pages long, plus 300 that they added the last day. Once again, another bill sent through Congress that didn't get read. Congratulations America, you've elected nothing but scam-artists...
Posted By: The Man (Guest) on June 30, 2009 at 03:14 PM
This bill will cause the largest tax increase in American history, but I thought Obama promised that any person making under $250,000 would not see their taxes raised one penny.
Posted By: Anonymous (Guest) on June 30, 2009 at 03:37 PM
To Da Man - I question any article that is done from a source that does not present itself to be unbiased. Anyone that reads me regularly knows, for example, that I will not use Canada Free Press because they openly present themselves to be conservative in bias. FoxNews, on the other hand, purports to be balanced, so I am more willing to give them the benefit of the doubt.
To John: As I am currently buying a home, I found your comment interesting. I checked out the text of the bill, and here is the stuff that caught my eye. if you go to http://www.opencongress.org/bill/111-h2454/text you will find the bill; I then searched for "Building energy performance" to find this section:
(c) Building Data Acquisition- CommentsClose CommentsPermalink
(1) RESOURCE REQUIREMENTS- For all principal building types identified under subsection (b), the Secretary of Energy, not later than 90 days after a report by the Administrator under subsection (b), shall provide to Congress, the Administrator, and the Office of Management and Budget a statement of additional resources needed, if any, to fully develop the relevant data, as well as the anticipated timeline for data development. CommentsClose CommentsPermalink
(2) CONSULTATION- The Secretary of Energy shall consult with the Administrator concerning the Administrator’s ability to use data series for these additional building types to support the achieved performance component in the labeling program. CommentsClose CommentsPermalink
(3) IMPROVEMENTS TO BUILDING ENERGY CONSUMPTION DATABASES- CommentsClose CommentsPermalink
(A) COMMERCIAL DATABASE- The Secretary of Energy shall support improvements to the Commercial Buildings Energy Consumption Survey (CBECS) as authorized by section 205(k) of the Department of Energy Organization Act (42 U.S.C. 7135(k))-- CommentsClose CommentsPermalink
(i) to enable complete and robust data for the actual energy performance of principal building types currently covered by survey; CommentsClose CommentsPermalink
(ii) to cover additional building types as identified by the Administrator under subsection (eb)(1)(B), to enable the development of achieved performance measurement protocols are developed for at least 90 percent of all major commercial building types within 5 years after the date of enactment of this Act; and CommentsClose CommentsPermalink
(iii) to include third-party audits of random data samplings to ensure the quality and accuracy of survey information. CommentsClose CommentsPermalink
(B) RESIDENTIAL DATABASES- The Administrator, in consultation with the Energy Information Administration and the Secretary of Energy, shall support improvements to the Residential Energ
Posted By: J. Alexander Mitchell (Guest) on June 30, 2009 at 03:53 PM
To Stephen - actually, the bill does dedicate money to "green" energy research.
As well, the impression I get, reading the comments, is that this is seen as basically closing coal factories. The bill calls for a reduction of less than 20% of carbon emmissions in ten years, and only 20% of energy created by renewable sources in that same time frame.
It is fascinating reading these comments. I have found that those on left find that the bill doesn't do nearly enough (and I admit that less than 20% in ten years doesn't sound that crazy) and those on the right don't want anything to do with the concept whatsoever...
Posted By: J. Alexander Mitchell (Guest) on June 30, 2009 at 03:58 PM
(oops... thought the text went fully through)
(B) RESIDENTIAL DATABASES- The Administrator, in consultation with the Energy Information Administration and the Secretary of Energy, shall support improvements to the Residential Energy Consumption Survey (RECS) as authorized by section 205(k) of the Department of Energy Organization Act (42 U.S.C. 7135(k)), or such other residential energy performance databases as the Administrator considers appropriate, to aid the development of achieved performance measurement protocols for residential building energy use for at least 90 percent of the residential market within 5 years after the date of enactment of this Act. CommentsClose CommentsPermalink
(C) CONSULTATION- The Secretary of Energy and the Administrator shall consult with public, private, and nonprofit sector representatives from the building industry and real estate industry to assist in the evaluation and improvement of building energy performance databases and labeling programs.
Posted By: J. Alexander Mitchell (Guest) on June 30, 2009 at 04:17 PM
J.Alexander,
While I appreciate your effort to get the full context of what is in the legistlation,maybe next time you can just give me the cliff notes version.If you know what I mean.
Posted By: John (Guest) on June 30, 2009 at 05:46 PM
'J.Alexander,
While I appreciate your effort to get the full context of what is in the legistlation,maybe next time you can just give me the cliff notes version.If you know what I mean.'
This is how every one of our congresspeople view the bills put before them.
Ladies and gentleman, if you'll look at exhibit A, you'll see the number one thing wrong with America.
Posted By: The Man (Guest) on June 30, 2009 at 09:11 PM
France has developed a way to deal with its nuclear waste and new technology is being developed. Plus the small chance that radioactive material could leak out when buried(inside a mountain no less) and posion people should be no problem to people who think greenhouse gases are going to destroy the world.
Posted By: jerry (Guest) on June 30, 2009 at 09:12 PM
Obama, on 1-17-2008, talking to the San Francisco Chronicle"under my plan of a cap and trade system,electricity rates would necessarily skyrocket"
Why is this not on every newcast?
Is this the direction you want America to go?
What do you think that would do the the buisness climate or the cost of goods?
This is insanity.
Posted By: John (Guest) on June 30, 2009 at 09:59 PM
"J.Alexander,
While I appreciate your effort to get the full context of what is in the legistlation,maybe next time you can just give me the cliff notes version.If you know what I mean. "
Yes, you're a lazy bum who can't be bothered to read. A product of a liberal education system.
Posted By: Michael (Guest) on June 30, 2009 at 11:11 PM
"Yes, you're a lazy bum who can't be bothered to read. A product of a liberal education system.
Posted By: Michael (Guest) on June 30, 2009 at 11:11 PM"
The fact that John has shown clear conservative leanings in his commentary so far makes this comment incredibly humorous...
Posted By: J. Alexander Mitchell (Guest) on July 01, 2009 at 10:25 AM
It's funny how liberals demand cap and trade in America but will ignore the fact that China and India pollute more than we do.
Posted By: Michael (Guest) on June 30, 2009 at 10:57 AM
It's the self-destructive nature of liberal politics. Attack your own so you won't hurt anyone elses feelings.
1> Blame american soldiers for muslim suicide bombers killings thousands
2> Blame white middle class people because some gang-banger was caught selling drugs.
Posted By: Mikel (too lazy to log in) (Guest) on July 01, 2009 at 11:53 AM
Mikel - Cap and Trade is a concept first presented by Conservatives from what I understand...
Posted By: J. Alexander Mitchell (Guest) on July 01, 2009 at 12:13 PM
In regards of Nuclear Waste, there already is a plan for disposal, Yucca Mountain. And Nuclear Waste (despite what the Simpsons would have you believe) is a solid waste not a liquid. While testing the containers that are used to store the waste they were both hit by a train and set on fire. Neither test showed anything but minor damage to the containers.
See the Penn and Teller's Bullshit episode about the Energy Crisis for some more info.
Posted By: DeimosMasque (Guest) on July 01, 2009 at 01:12 PM
Michael and the man,
I was trying to be funny,apparently the only on who got it was J Alexander.
My poor attempt at humor aside if you had read my previous posts you would see how silly the liberal label is(stupid label well....whatever)
You see J. Alexanders listing of the proposal was so long that it wouldn't fit on one post,hence the sacastic comment on cliff notes.
Mabe Michael, you just need to lighten up.
Posted By: John (Guest) on July 01, 2009 at 03:31 PM
"You see J. Alexanders listing of the proposal was so long that it wouldn't fit on one post,hence the sacastic comment on cliff notes." - John
Correction - my posting of ONE subsection of ONE section of ONE heading was far too long to fit in a single comment. Remember... this was one tiny SLITHER of the bill...
Posted By: J. Alexander Mitchell (Registered) on July 01, 2009 at 04:13 PM
J Alexander,
So the cliff notes joke was sort of funny right?Apparently it made me a liberal.
Posted By: John (Guest) on July 01, 2009 at 06:11 PM
STAY CURRENT