Climate Change Legislation Will Increase Diesel Prices, Hurt Consumers

/PRNewswire/ -- The American Trucking Associations (ATA) First Vice Chair Barbara Windsor told the Senate Environment and Public Works Committee today that the current cap-and-trade proposal will increase the price and volatility of diesel fuel for the trucking industry without significantly reducing carbon emissions.

"ATA strongly supports efforts to reduce greenhouse gas emissions and make this country more energy independent," said Windsor, who is President and CEO of Hahn Transportation in New Market, Md. "However, an economy-wide cap and trade system is not the answer." Proponents of an economy-wide cap-and-trade system say increasing the price of fuel will reduce consumption, Windsor said, but that does not hold true in the trucking industry.

"In our industry, a higher fuel price does not translate into fewer miles traveled because the nation depends on trucks to deliver nearly 100 percent of the food, clothes, and medicines that we use in our daily lives," said Windsor. "Instead, this increase in diesel prices will raise logistics costs within the economy and hurt the American consumer."

Cap-and-trade requires oil refineries to purchase emission allowances that cover their direct refining operations and the amount of carbon produced by downstream combustion of the produced fuels. "The costs associated with obtaining these allowances will be passed on the fuel consumers in the form of higher prices," said Windsor. "A major petroleum supplier to the trucking industry has advised that diesel fuel costs could rise by up to 88 cents."

"Should Congress move forward with a cap-and-trade carbon control system, oil refinery carbon caps should apply only to the refinery's direct carbon emissions and not to the downstream combustion of the products they produce such as gasoline, diesel, and jet fuel," said Windsor.

Cap-and-trade also will increase price volatility as carbon prices will fluctuate. Volatile fuel prices make it very difficult for trucking companies to accurately predict expenses and pass them on to customers.

ATA is concerned with the support of various investment banks for cap-and-trade. These firms would profit from volatility in the energy futures markets and a carbon derivatives market. Congress must reform commodity trading before creating new derivative carbon markets.

Windsor's testimony suggested alternative methods of reducing carbon emissions from the trucking industry. These alternatives are set forth in ATA's environmental sustainability plan, which would reduce fuel consumption by 86 billion gallons and reduce the carbon footprint of all vehicles by nearly a billion tons over the next 10 years. The sustainability plan includes: a national 65 mph speed limit and governing new truck speeds to 65 mph or below; decreasing idling; reducing highway congestion through highway infrastructure improvements; increasing fuel efficiency through EPA's SmartWay Program; promoting the use of more productive truck combinations; and supporting national fuel economy standards for medium- and heavy-duty trucks.

"Our plan can achieve real results with far less cost and disruption to our industry sector than under a cap-and-trade scenario," said Windsor.

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Subplots Will Signal Whether New Senate Energy Bill Gets Passed

On Wednesday, U.S. Sens. Barbara Boxer (D-Calif.) and John Kerry (D-Mass.) introduced a bill that would establish for the first time a comprehensive national low-carbon energy program.

Tim Profeta, director of Duke University’s Nicholas Institute for Environmental Policy Solutions, has seen similar legislation introduced on Capitol Hill over the past 10 years, and calls the latest bill “a cautious first move in what must be a bipartisan leap to modernize the U.S. energy economy. The bill leaves question marks, appropriately, on some of the toughest issues.”

Profeta, who served as Counsel for the Environment to Sen. Joseph Lieberman before becoming founding director of the Nicholas Institute in 2005, said there will be telltale signs on whether Democrats and Republicans will be able to reach agreement on this issue.

“Make sure to watch three key subplots in this story develop,” he says. “First, will senators struggle to choose the right policy tool to prevent the costs of energy transition from harming consumers, business or the economy as a whole.

“Second, as the global economy continues to grow as an organic whole, how will lawmakers strengthen U.S. competitiveness in international trade.

“Third, in the wake of last year's Wall Street financial meltdown, will the new market for carbon credits be designed smartly, drawing on all of our knowledge and experience of how efficient markets work.”

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Decline in Industrial Natural Gas Consumption Tied to Influences Other Than Recession

/PRNewswire/ -- Economists at C. H. Guernsey & Company have determined that the decline in industrial natural gas consumption since January 2008 is partly associated with a long-term trend in energy efficiency and structural changes to the economy and is not solely related to the effects of the recession. The Energy Information Administration reported that U. S. industrial natural gas consumption declined by approximately 14% during the recessionary period since January 2008 for a net average monthly decline of 80.4 Bcf. In fact, the Guernsey economists, Don Murry and Zhen Zhu, also found that if the price of natural gas had not declined by nearly 50% over the same period, industrial natural gas consumption probably would have declined by over 19%.

Murry and Zhu found that only 73 Bcf per month was a direct effect of the decline in economic activity. This is the rate at which the natural gas industrial sales are likely to expand even with a strong economic recovery, and this is only if prices stay near their current level. The economists associated the remainder of the decline with longer- term trends reducing gas consumption per unit of industrial output such as improvements in energy efficiency and changes in the economic structure.

As a corollary to their modeling, they determined that fuel switching had little effect, either positively or negatively, on the level of industrial natural gas consumption during this period. This is very likely because fuel oil prices declined at similar rates during the period. A brief explanation of the study can be found http://www.chguernsey.com/ema.

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John W. Rich, Jr: OPEC Plot Could Siphon 15-20% of Stimulus Dollars to Offshore Oil Suppliers' Bank Accounts

/PRNewswire-USNewswire/ -- Congress's trillion dollar economic stimulus plan fails to address one of the primary threats to our future economic stability: OPEC's plan to push oil prices up which will siphon hundreds of millions of stimulus dollars to the offshore oil producers, according to John W. Rich, Jr., a leader in the waste coals to liquid transportation fuels field.

"Just recently, OPEC announced plans to cut production by 4.2 million barrels a day and has stated its goal is to get oil prices back to $75 per barrel. If OPEC succeeds in getting oil prices back up, that could mean that more than 15 or 20% of the new stimulus dollars would simply be exported to foreign oil producers' bank accounts which will further diminish, not stimulate, our economy," said John W. Rich, Jr. "Congress should not ignore the problem with OPEC and prepare a stimulus bill that could essentially be a direct deposit of billions of dollars into foreign oil suppliers' pockets."

Oil spiked to $147 per barrel last summer, driving gas prices to nearly $5 per gallon and crippling our economy. If OPEC succeeds in driving the $30 per barrel price ($300 million per day) of a month ago to $75 per barrel, that would mean the U.S. would be exporting another $450 million per day for a total of $750 million per day to the offshore oil suppliers.

John W. Rich, Jr. has been a leader in the energy sector for decades and he is the CEO of WMPI PTY, LLC in Gilberton, PA. For over a decade his company has been leading the drive to build a waste coal to liquid transportation fuels industry in the United States. Rich is proposing utilizing new technology for the gasification of existing waste coal intermingled with traditional biomass feedstock to produce an abundant supply of domestic liquid transportation fuels that will displace the foreign oil we are importing.

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GridWise Alliance Releases Smart Grid Jobs Report: 280,000 New U.S. Jobs Tied Directly to Smart Grid Deployment

/PRNewswire-USNewswire/ -- In a Smart Grid Jobs Report released today by the GridWise Alliance, it is estimated that up to 280,000 new jobs can be created directly from the deployment of smart grid technologies. The report explains that Federal investment in a smart grid could act as a catalyst for these planned and immediate direct jobs as well as spawn many indirect jobs.

The Smart Grid Jobs Report was written by GridWise member company, KEMA, Inc. In addition to the 280,000 direct jobs, the report notes that a smart grid will drive a substantial number of indirect jobs as it enables the deployment of new technologies such as plug-in hybrid electric vehicles, distributed renewable energy resources such as solar, smart appliances, home automation software and hardware, and wind energy generation. The report does not quantify the number of these indirect jobs. To view the full report visit www.gridwise.org.

"Increasingly a smart grid is seen as a key enabler for the new energy economy and as such, is foundational for the millions of 'green collar jobs' President-Elect Obama is aiming for," says Guido Bartels, Chairman of the GridWise Alliance and General Manager Global Energy & Utilities Industry at IBM.

The report projects that a $16 billion Federal investment in smart incentives over the next four years would drive $64 billion in smart grid related projects resulting in approximately 280,000 new direct positions across various categories. "Over 150,000 of these jobs would be created by the end of 2009 and nearly 140,000 newly created high-value positions would become permanent after a smart grid deployment," explained Ralph Masiello, Sr. VP, Energy Systems Consulting, KEMA, Inc.

"We know first-hand that a smart grid allows our electric infrastructure to be more reliable, resilient, and secure. There is also a growing consensus that a smart grid is one of the critical and necessary enablers for optimizing renewable resources, maximizing energy efficiency, and unleashing the potential of distributed energy storage technologies," said Katherine Hamilton, President of the GridWise Alliance.

President-Elect Obama and key Senate and House leaders have frequently mentioned a smart grid as an economic and infrastructure booster. The GridWise Alliance, with 70 members from all across the energy value chain, believes that a smart grid is essential to achieving goals for integrating energy from renewable resources and energy efficiency technologies such as plug-in hybrid electric vehicles.

"A smart grid will enable a transformed electric supply sector and related job creation; incentivize a strong domestic market for U.S. smart grid technology firms; and create high value permanent positions in the energy economy," concludes Hamilton.

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Grassroots to Hold Obama to Clean Energy Promises: 67 Groups in 28 States Urge President-Elect to Act Now

/PRNewswire-USNewswire/ -- Barack Obama campaigned on the need to create a clean-energy economy in the United States. Today, 67 grassroots organizations in 28 states sent a letter to the President-Elect to let him know that they intend to support the goal of clean energy, underscoring that this does not include taxpayer investment of so-called "clean coal" technology or unsafe nuclear power.

The joint letter organized by theCLEAN.org (http://www.theclean.org/) and the Civil Society Institute outlined 10 needed steps for short-term economic stimulus/job creation and additional movement to a clean-energy economy. The nonprofit and nonpartisan Civil Society Institute think tank is an action-oriented research and community organizing center based in Massachusetts. CSI is a convener of a collaboration of grassroots organizations around the U.S. that are organized as TheClean.org.

The joint letter states: "We write to support your stated goals to invest in clean energy and to lead the country toward a new energy economy that will address global warming, stimulate near- and long-term economic prosperity and help ensure our national security. As you made clear in your Presidential campaign, and in statements since, a strong economy for the United States is dependent on energy efficiency, investment in clean, renewable energy technologies, investment in new energy infrastructure, and training of our workforce to transit from old energy technologies to new technologies. The benefits to the United States are clear. For every $1 million spent on clean energy 18 jobs will be created as opposed to the 7.5 jobs created per million dollars on old energy technologies ..."

The 10 steps outlined by the 67 grassroots organizations are as follows:

-- Direct the Department of Energy to build a robust EHV transmission system to provide capacity to transfer power (including wind) from one region in the United States to another;

-- Support $45 billion in immediate direct government spending for public building retrofits, expansion of mass transit, freight rail and smart grid systems;

-- Encourage homeowner use of renewable energy technologies by enacting a tax credit of $7500 for the installation and/or use of energy efficiency saving devices such as solar heating, windmills and PV to generate electricity;

-- Support $500 billion in investment in renewable energy over a 10-year period, including transiting to a new digital electricity grid;

-- Support the enactment of a renewable electricity standard of 30% by 2020, 50% by 2030, and 100% by 2050;

-- Support the extension of the production tax credit for wind projects for 10 years;

-- Support an economy-wide cap and trade program to reduce greenhouse gas emissions to 80% below 1990 levels by 2050 and auction carbon allowances to finance a transition to a clean energy economy, making the funds available for investment and infrastructure costs;

-- Support the enactment of domestic incentives that reward forest owners, farmers, and ranchers when they plant trees, restore grasslands or undertake farming practices that capture carbon dioxide from the atmosphere;

-- Support tax credits for cars using hybrid and clean diesel technologies graded on miles per gallon efficiencies. $1500 and $3000 tax credits respectively established for cars obtaining 30 and 40 miles per gallon; and

-- Enact a moratorium on building nuclear power plants and coal fired plants in order to transit to a clean, energy efficient economy while at the same time phase in renewable and energy efficiency technologies that eliminate fossil fuel usage and nuclear power by 2050.

Civil Society Institute President and Founder Pam Solo said: "We see the agenda outlined in our letter as relevant to both short-term policies that should be part of an economic stimulus that can also build toward a new, clean energy economy. CLEAN is determined to advance the public education and involvement on these issues from the grassroots up! It is our firm conviction that it will take a concerted and coordinated grassroots mobilization to realize the serious changes being proposed by the President. While there are numerous national groups weighing in on the policy direction of the Obama Administration, very few look at what is possible from outside the Beltway. In this letter, we offer our support for the needed bold steps and the assurance of the kind of grassroots pressure that will make it possible for these steps to become the policy of the nation."

Solo noted that The Civil Society Institute has sponsored pioneering work on how near-term transitional steps for moving the U.S. toward a new energy economy. These 11 related reports can be found at http://www.civilsocietyinstitute.org/csiresearch.cfm. In May 2008, CSI sponsored a report by ACEEE on the economic/job-creation benefits of energy efficiency titled "The Size of the U.S. Energy Efficiency Market: Generating a More Complete Picture" (#E083).

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Deloitte Survey: Seventy-Three Percent of Voters Say America on the Wrong Track

/PRNewswire/ -- Voters feel the country is headed in the wrong overall direction by a five-to-one margin, according to a national survey from Deloitte's Oil & Gas industry group.

The Deloitte survey also identified the four most urgent issues facing the new presidential administration: the nation's economy, 84 percent; the wars in Iraq and Afghanistan, 39 percent; health care, 26 percent; and energy, 19 percent (multiple responses were permitted; numbers do not add up to 100 percent).

The survey placed a special focus on the national energy situation, which voters believe is on the wrong track by a three-to-one margin -- 79 percent claiming that the nation's energy situation is in worse shape now than five years ago.

The survey shows that Americans have a particular passion for renewable energy, but may not realize the need for more hydrocarbons like oil and gas, which are projected to account for the majority of the world's transportation fuels through 2030. Given this fact, the new presidential administration could face a challenge meeting the public's short-term aspirations for renewable energy.

"It's clear from our survey that most voters believe renewable energy is the way of the future," said Gary Adams, vice chairman, oil and gas, Deloitte LLP. "While this is very important, many voters may not understand the current costs and complexities of developing renewable energy."

In the survey, renewables like solar power and wind power have an 86 percent favorability rating, consistent across all age and education groups. Moreover, a plurality of voters (41 percent) believe renewable energy is the cheapest type of energy today, with an additional 10 percentage points (51 percent overall) claiming renewable energy will be the cheapest energy source 25 years from now.

In contrast, the percentage of voters surveyed who believe oil and gas is currently the cheapest energy source trails renewables by 25 points (16 percent feel oil and gas is currently a cheap energy source). What is more, the percentage trails renewables by a full 45 points when voters look into the future (6 percent believe oil and gas will be a cheap energy source 25 years from now).

Adams points out that there is confusion among voters about the real costs of renewable energy sources. "Right now, renewables simply are not as cheap as fossil fuels, which adds to the challenge of satisfying the public's desire to move away from conventional oil and gas in a short time period."

When it comes to sustainability, oil and gas decline even further in voters' minds: 25 percent surveyed say oil and gas are a sustainable energy source today, but only 8 percent say the same will be true 25 years from now -- a 17 point drop.

Adams points out that America urgently needs a comprehensive energy policy that will promote investment in the development of economical alternative fuels, such as renewables and, at the same time, encourage local exploration and production of oil and gas to bridge to the gap to the future.

"The world will be primarily reliant on fossil fuels for at least two generations -- the bridge to tomorrow's new energy future depends on this. The key is to have a sensible plan to transition to a new, cleaner energy era. It is also clear that the oil and gas industry needs to do more to educate the public on the challenges ahead."

Deloitte's survey offers a few clues as to how voters would like go about this transition. First and foremost, voters widely agree on requiring more stringent and mandatory fuel economy standards for all cars sold in America. Most voters, especially younger ones, are also in favor of funding major clean energy projects despite high costs.

Surprisingly, the survey showed that oil and gas are viewed with less outright disdain than one might assume: Conventional oil and gas generally enjoy two-to-one support as an energy source among all voters surveyed, although the level of support is highest among those over the age of 55. At least one in three voters prefers using fossil fuels more efficiently rather than moving away from them. Older voters are also in favor of building new refineries to produce more gasoline.

Still, voters are increasingly skeptical about the longevity of oil and gas as an energy solution. While they are evenly split over whether oil and gas are a short-term or medium-term solution for fulfilling America's energy needs, a mere 10 percent think oil and gas are a long-term solution.

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