Block’s Indicator of Sustainable Growth

by Ray Block 

Residential and commercial buildings account for almost 39 per cent of total US energy consumption, with residential 21 per cent and commercial 18 per cent. Buildings represent a high 38 per cent of US carbon dioxide (CO2) emissions.

US greenhouse gas emissions by sector in 2007 was made up of residential and commercial 11 per cent, agriculture 7 per cent, industrial 20 per cent, transportation 28 per cent and electricity 34 per cent.

By including buildings in the American Clean Energy and Security Act (ACTS), the aim is to make new homes to be 30 per cent more energy efficient than mandated in the 2006 International Energy Conservation Code.

That percentage increases to 50 per cent by 2014, and then increases 5 per cent every three years. The initial 30 per cent is to be effective on the enactment of ACES.

The National Association of Home Builders (NAHB) says the higher energy standards are “simply too far too fast. The market is not geared up to supply the necessary materials and equipment, and that’s going to drive up costs. The result will be fewer working class families in these new energy efficient homes. They’ll be relegated to older, less efficient housing stock and face ever higher utility bills.”

The industry association wants Congress to scale back the higher energy standards to a 30 per cent increase in residential energy efficiency by 2012.

The legislation also requires commercial buildings to be 30 per cent more eenergy efficient on the enactment of ACES, and then to be 50 per cent more efficient by January 2015.

A 5 per cent additional energy efficiency is required in new residential buildings by January 2017, and in new commercial buildings by January 2018.Every three years thereafter, an additional 5 per cent energy efficiency is required up to January 2029 for residential buildings and January 2030 for commercial buildings.

By Ray Block

The historic American Clean Energy and Security Act (ACTS) HR 2454 on Friday June 26, squeaked through the House of Representatives, with the compromise bill 219 to 212, avoiding defeat only through eight liberal Republicans crossing the floor and siding with the Democrat majority.

Although the tough minded Speaker of the House, Nancy Pelosi cracked her whip, 44 Democrats still either voted against it, or shied away from voting at all.

Senator Barbara Boxer, the Democrat chairwoman of the Senate Environment and Public Works Committee has announced that her committee will commence to “mark up” the climate and energy bill on July 27, (mark up is the process where the clerk of the committee reads aloud the proposed amendments section by section until there is unanimous support).

While the Democrat majority leader, Senator Harry Reid says he wants to hold a floor debate in the fall (ie September) on the climate and energy package-“though I still think it is unlikely the floor bill ends up on Obama’s desk this year”

Once the committee approves the bill section by section, it then goes to the “floor,” that is to the full Senate for debate and approval. To get the legislation to the President, the two houses in a conference process have to agree on the final mark up.

Somewhat more positive, Senator Mark Udall, Democrat from Colorado, said: “he would give global warming legislation “50-50 or better odds” of passing the Senate this year. There’s a lot of momentum over here to work on this. I think we’ve been tactically smart, letting the House go first. I think if they can find the sweet spot, it’s a very similar sweet sport over here. Stay tuned.”

This week, the Democrat numbers in the Senate rose from 59 to 60, with Minnesota Democrat, Al Franken, finally taking his seat. Franken had won his seat in the disputed election in November, but was unable to be sworn in until his opponent, former Senator Norm Coleman withdrew from further legislative appeals.

As the Republicans will redouble their efforts to have the legislation defeated, it would be essential that the Democrat majority can tighten their majority position to a point, where there is no dissent.

This will be difficult, if only because the Democrats don’t normally vote in a tight bloc, representing as they do such a diverse group of electoral interests. Otherwise, the Republicans will filibuster through to the end of the year to embarrass the President and the Administration will have nothing concrete to take to Copenhagen.

A major issue for the Senate is whether to follow the House bill in giving away 85 per cent of emission allowances free of charge, so that only 15 per cent of allowances will now be able to be auctioned. A greater number of allowances for auctioning would have given the Administration more funds for renewable energy projects and energy efficiency. As it stands, the Congressional Budget Office is estimating that the cap and trade legislation as it currently stands would cost $22 billion by 2020, or $175 for every household.

To get the legislation through the House, it was essential that Representative Collin Peterson’s amendments would be accepted, although the legislation will be less effective as a result. Rep Peterson is chairman of the House Agriculture Committee and his constituency is the highly protected sugar beet farmers of Minnesota. Although the Farm Bureau and 116 farm lobby groups were almost unanimously opposed to the Waxman-Markey bill, moderate Democrat Peterson received three major concessions in the legislation. These were:

Ø      The Environmental Protection Agency (EPA) is denied the right to hold an inquiry as to whether corn based ethanol consumes more energy in greenhouse gas than it yields. The EPA had previously announced it intended to study the issue. Ethanol is exempted from indirect land use analysis for five years.

Ø      The legislation gives farmers two million tonnes of offsets, which are specifically to be administered by the farmer- friendly Department of Agriculture (USDA) and not by the EPA. Farmers get more paybacks for management practices, which reduce greenhouse gases, such as injecting the soil with seed rather than ploughing the ground, leaving more surface crop residues to lock carbon in the soil, or planting trees to absorb carbon from the air.

Ø       Although not part of the Climate and Energy bill, the financial reforms in Washington had intended rolling the Commodity Futures Trading Commission into the Securities and Exchange Commission. This will no longer happen.

by Ray Block

The historic American Clean Energy and Security Act (ACTS) HR 2454 on Friday June 26 saw a compromise bill just squeak through  the House of Representatives 219 to 212. But the Bill would have been defeated, if eight liberal Republicans had not sided with the Democrat majority.

Although the tough minded Speaker of the House, Nancy Pelosi cracked her whip, 44 Democrats still either voted against it, or shied away from voting at all.

Senator Barbara Boxer, the chairwoman of the Senate Environment and Public Works Committee has announced that her committee will commence to “mark up” the climate and energy bill on July 27, (mark up is the process where the clerk of the committee reads aloud the proposed amendments section by section until there is unanimous support).

While the Democrat majority leader, Senator Harry Reid says he wants to hold a floor debate in the fall (ie September) on the climate and energy package-“though I still think it is unlikely the floor bill ends up on Obama’s desk this year”

Once the committee approves the bill section by section, it then goes to the “floor,” that is to the full Senate for debate and approval. To get the legislation to the President, the two houses in a conference process have to agree on the final mark up.

Somewhat more positive, Senator Mark Udall, Democrat from Colorado, said: “he would give global warming legislation “50-50 or better odds” of passing the Senate this year. There’s a lot of momentum over here to work on this. I think we’ve been tactically smart, letting the House go first. I think if they can find the sweet spot, it’s a very similar sweet sport over here. Stay tuned.”

This week, the Democrat numbers in the Senate rose from 59 to 60, with Minnesota Democrat, Al Franken, finally taking his seat. Franken had won his seat in the disputed election in November, but was unable to be sworn in until his opponent, former Senator Norm Coleman withdrew from further legislative appeals.

As the Republicans will redouble their efforts to have the legislation defeated, it would be essential that the Democrat majority can tighten their majority position to a point, where there is no dissent.

This will be difficult, if only because the Democrats don’t normally vote in a tight bloc, representing as they do such a diverse group of electoral interests. Otherwise, the Republicans will filibuster through to the end of the year to embarrass the President and the Administration will have nothing concrete to take to Copenhagen.

A major issue for the Senate is whether to follow the House bill in giving away 85 per cent of emission allowances free of charge, so that only 15 per cent of allowances will now be able to be auctioned. A greater number of allowances for auctioning would have given the Administration more funds for renewable energy projects and energy efficiency. As it stands, the Congressional Budget Office is estimating that the cap and trade legislation as it currently stands would cost $22 billion by 2020, or $175 for every household.

To get the legislation through the House, it was essential that Representative Collin Peterson’s amendments would be accepted, although the legislation will be less effective as a result. Rep Peterson is chairman of the House Agriculture Committee and his constituency is the highly protected sugar beet farmers of Minnesota. Although the Farm Bureau and 116 farm lobby groups were almost unanimously opposed to the Waxman-Markey bill, moderate Democrat Peterson received three major concessions in the legislation. These were:

Ø      The Environmental Protection Agency (EPA) is denied the right to hold an inquiry as to whether corn based ethanol consumes more energy in greenhouse gas than it yields. The EPA had previously announced it intended to study the issue. Ethanol is exempted from indirect land use analysis for five years.

Ø      The legislation gives farmers two million tonnes of offsets, which are specifically to be administered by the farmer- friendly Department of Agriculture (USDA) and not by the EPA. Farmers get more paybacks for management practices, which reduce greenhouse gases, such as injecting the soil with seed rather than ploughing the ground, leaving more surface crop residues to lock carbon in the soil, or planting trees to absorb carbon from the air.

Ø       Although not part of the Climate and Energy bill, the financial reforms in Washington had intended rolling the Commodity Futures Trading Commission into the Securities and Exchange Commission. This will no longer happen.

by Ray Block

There’s many a slip between the cup and lip, so says the old proverb. Friday June 26’s vote in the US House of Representatives for ACES- American Clean Energy and Security was very close.

The Congress Daily had suggested a photo finish, which finished up at 219 in favour to 212 against. To get the required numbers, the bill needed 218 votes, so there wasn’t much in it.

Henry Waxman, chairman of the House Energy and Commerce Committee, which with subcommittee chairman Ed Markey, described the  measure as “this landmark bill will revitalize our economy by creating millions of new jobs, increase our national security by reducing  our dependence on foreign oil, and preserve our planet by reducing the pollution that causes global warming.”

Now the hard bargaining commences all over again, with the Senate intending to move forward with their own bill going through the committee stages in September for a floor vote in October. Hopefully, the conference process of reconciling the two houses’ bills will be a short one, and the final measure will emerge for presentation at Copenhagen in December.

To move things forward at a faster rate, Senator Barbara Boxer, the California Democrat who is chairman of the Senate Environmental and Public Works Committee said that her committee will not “differ that much” from the ACES legislation, and that she will “take into account” many of the compromises made to pass the bill.

ACES in its House’s version is weighty 1,201 pages, and there’s a further 49 page amendment from the Agriculture Committee. The vote was on party lines, with Republicans opposed and some Democrats defecting.

The main provisions of the legislation are:

Ø      Requires electric utilities to meet 20 per cent of their electricity demand through renewable energy sources and energy efficiency by 2020.

Ø      Invests $190 billion in new clean energy technologies and energy efficiency, including energy efficiency and renewable energy ($90 billion in new investments by 2025), carbon capture and sequestration ($60 billion), electric and other advanced technology vehicles ($20 billion), and basic scientific research and development ($20 billion).

Ø      Mandates new energy saving standards for buildings, appliances, and industry.

Ø      Reduces carbon emissions from major US sources by 17 per cent by 2025, and over 80 per cent by 2050 compared with 2005 levels. Complementary measures in the legislation, such as investments in preventing tropical deforestation, will achieve significant additional reductions in carbon emissions.

Ø      Protects consumers from energy price increases. According to recent analyses from the Congressional Budget Office and Environmental Protection Agency, the legislation will cost each household less than 50 cents per day in 2020 (not including energy efficiency savings).

Fiona Harvey, the environmental writer in the Financial Times (June 26 2009) said the heavily modified bill now includes “major sops” to farmers, including agricultural credits based on the sequestration of carbon in soils.

 “Such credits are notoriously hard to do properly. It is extremely difficult to quantify how much carbon is being released from soils, to verify that farmers have followed the correct methods to conserve carbon dioxide in the soils, and to police the award of the credits.”

Mitchell Feierstein, the CEO of London based Glacier Environmental Funds, which specialises in buying and selling carbon credits, is quoted as saying “it’s crucial to establish credible base lines and robust methodologies ensuring any credits generated are quantifiable, real, permanent, verified and certified by an independent third party, are given unique serial numbers and stored in a credible custodial registry maintained by a creditworthy counterparty. These criteria are imperative and not flexible.”

Otherwise, you are creating a way for farmers to arbitrage the system “and/ or opening the door to green wash.”

By Ray Block

Just as in 1900 in New York, it won’t be long before we see rows of electric cars, whether hybrids or plug in electric cars.

The big news on June 23 was not so much the US Government subsidising Nissan, the Renault affiliate to build electric cars in Tennessee with US$1.6 billion in loans, and $405 million for electric sports car firm Tesla Motors for a new California plant, but the involvement of ExxonMobil behind the scenes.

For ExxonMobil to have anything to do with the world of renewable energy is big news. Imagine old man Rockefeller, Standard Oil’s founder, looking down from Heaven in amazement at the upstarts of today supporting the electric car initiative.

Next, you’ll find the likes of ExxonMobil, the one time Standard Oil of New Jersey, telling us that the peak oil story is really true and the days of cheap gasoline are gone for ever.

Exxon hasn’t gone that far. But at least in 2006,  ExxonMobil Chemical and its Japanese affiliate, Tonen Chemical Corporation had announced that it was developing a prototype microporous film for lithium-ion battery separators, which would dramatically improve lithium-ion battery power and safety performance in hybrid vehicles.

As the Wall Street Journal’s environmental capital blog said, if Exxon wasn’t selling you a tiger in the tank, going back to the days of its gasoline ads, there was a tiger in the battery that powers your car.

The Exxon connection here is with Electrovaya, the Mississauga, Ontario firm which announced  this June that its battery developed from the Exxon affiliate will power the Maya-300 electric cars to be showcased at the 9^th National Motor Vehicle and Aviation Workshops and Exposition to be held July 28-30 in Chicago.

Maya Electric launched its first cars at the Maryland Science Centre on June 23. The Maya car is a five door, four passenger emission-free vehicle, with an all electric range of up to 120 miles (192 km). The vehicle is designed for the fleet market.