Kerry, Lieberman Unveil Climate Bill Without Graham

Joined by over a dozen stakeholders, but absent the presence of Sen. Lindsey Graham (R-S.C.), Sens. John Kerry (D-Mass.) and Joe Lieberman (I-Conn.) put forth their much-anticipated energy bill today, the American Power Act (APA).

After months of delay, the duo decided they could no longer wait for Graham, an original co-author of the bill, to move forward with them. Graham has expressed displeasure over the Obama administration's calls for Congress to take up work on immigration reform. Earlier in the day, however, Kerry told MSNBC that Graham will support the bill, which If enacted, he said, would leave a positive print on just about every aspect of American society.

"The bill that we are introducing today...will restore America's economy and reassert our position as a global leader in clean energy technology," he said. "It will create millions of jobs, move us towards energy independence and strengthen America's security. And it will give us cleaner air."

The Kerry-Lieberman bill is being framed as somewhat of a compromise between the American Clean Energy and Security Act (ACES), passed by the House last year, and the broad energy proposal laid out by President Obama. On a controversial item known as cap and trade, a system by which companies are provided with economic incentives for limiting their emissions, the APA would gradually implement the policy, first on utilities and industries, and then on the broader economy by 2025. The President's plan calls for the imposition of an economy-wide system of cap and trade, while the House bill would mandate cap and trade for utilities, industries and big oil starting in 2012.

Similar to both the White House plan and the House bill, the APA aims to lower emissions by 80% below 2005 levels by the year 2050. Yet unlike them, the APA contains support for nuclear energy and natural gas, items that could win the support of conservative Democrats and Republicans. In addition, its price tag is slightly lower than both its counterpart in the House and the administration's plan. Another key difference is its inclusion of language that would allow states to opt out of offshore drilling within 75 miles of their coast.

But although the bill attempts to usher in a new era of clean energy usage in the U.S., many of its provisions already face legions of criticism. For starters, opponents say it will ration energy use for Americans by increasing the cost of everyday consumption for businesses and individuals.

Ben Lieberman, a senior energy and environment policy analyst at the conservative Heritage Foundation, told Talk Radio News Service that the APA amounts to nothing more than a giant energy tax.

"The only way to reduce these greenhouse gas emissions from fossil fuels is to raise the cost of energy," he said. "They have to raise costs high enough so that people are forced to use less, that's how this works."

In addition, there are concerns about the bill's impact on the nation's coal industry, which has lately been the focus of an intense debate in Washington over energy safety due to the tragic deaths of dozens of miners in West Virginia earlier this year. Though the APA contains weaker financial restrictions on coal production than the House bill, critics believe the administration favors moving completely away from coal. In fact, days before he was elected President in 2008, Mr. Obama said "if somebody wants to build a coal-powered plant, they can; it's just that it will bankrupt them because they're going to be charged a huge sum for all that greenhouse gas that's being emitted."

According to Lieberman, the net effect of smaller investment in coal and natural gas will be increased unemployment.

'Sure, there's a few 'make-work' jobs created in specialized industries that will deal with reducing emissions," he said. "But overall the impact is negative; higher cost of energy and fewer jobs."

Click here for more on the American Power Act

Food vs. Fuel: Battle of the corn

The Senate Energy and Natural Resources Committee held a hearing on renewable fuels and their effect on food prices. The chairman of the Committee, Senator Jeff Bingaman (D-NM), said that the U.S. must be mindful of any impacts of biofuel production. He said that between four and five percent of the 45 percent global increase in food prices in the last year was because of U.S. biofuels policy alone. Bingaman added that it is essential to ensure that U.S. biofuels policy does not harm the world’s poor.

Jack Huttner, Vice President of Biorefinery Business Development at Genencor, said that the biggest concern with the higher prices of fuel is how to meet energy needs and also produce enough food. Huttner said that a second generation of biofuels uses non-edible parts of corn, such as cobs and stalks, to make ethanol, which increases the amount of output per acre.

Jason Pyle, CEO of Sapphire Energy, presented a sample of a renewable gasoline made of algae. Pyle said that its production does not release carbon and does not involve agricultural lands or products. Pyle added that repealing the renewable fuel standards would inhibit innovations, such as the algae fuel, from helping to solve the energy crisis.

Republicans work towards "clean energy independence"

The Senate Republican Conference met with several witnesses to discuss the solution to gaining “more American energy” and achieving “clean energy independence.” A major focus of the discussion was Sen. Lamar Alexander’s (R-Tenn.) “New Manhattan Project” in which he outlines seven steps or “Grand Challenges” which he considers essential to achieving this goal in the next five years. The Grand Challenges include making plug-in electric vehicles commonplace, making carbon capture a reality for coal-burning power plants, achieving cost-competitive solar power, creating safe storage for nuclear waste, developing cost-competitive biofuels, constructing environmentally-friendly buildings, and providing fusion energy.

Sen. Bob Bennett (R-Utah) highlighted that even if the U.S. were to keep its fossil fuel emissions level without decreasing them, the increase in demand will grow by 30 percent in the next 20 to 30 years. He also emphasized that even if the U.S. met its global warming goals, the impact worldwide would be very low. Sen. Kit Bond (R-Mo.) said the U.S. needs to “get real” about its energy future and that the situation is a basic lesson in “Economics 101.” He said the country needs to increase supply and decrease demand by tapping into U.S. domestic oil reserves and proliferation of more fuel-efficient vehicles. All the senators reiterated that there need not be a choice between energy and the environment, but that both goals can be achieved.

Dr. Rhone Resch, President of the Solar Energy Industries Association, said that solar technology is available but a significant market for it does not exist in the U.S. Dr. Scott W. Tinker, Director of the Bureau of Economic Geology, said that one-third of U.S. oil supply is imported, which makes energy independence difficult to achieve.

Global food prices up 43 percent

The Senate Foreign Relations Committee held a hearing on “Responding to the Global Food Crisis,” focusing in particular on U.S. agricultural investment in foreign nations and how the development of corn-based ethanol and other biofuels have contributed to the rise in food prices.

Edward Lazear, chairman for the Council of Economic Advisors, said that global food inflation was 43 percent during the 12 months ending in March 2008. He emphasized that Americans spend less than 14 percent of total expenditures on food, while Africans spend about 43 percent and for the poorest populations in Sub-Saharan Africa subsisting on less than one dollar per day, this figure may be as high as 70 percent.

Lazear testified that wheat prices have increased 123 percent, soybeans 66 percent, corn 37 percent, and rice 36 percent. Emerging market consumption, he said, has increased by 45 percent from 2001 to 2007 compared to 1991 to 2000, and that this increase in demand accounts for about 18 percent of the rise in food prices. Other factors, he said, are adverse weather conditions that destroy crops and to a smaller degree, ethanol production. He said that the world’s ethanol production accounts for approximately 13 percent of this year’s 37 percent increase in corn prices, and since corn makes up a small fraction of the International Monetary Fund’s Global Food Index, it is responsible for only about 1.2 percent of the year’s 43 percent total global food price increase.

U.S. Agency for International Development Administrator Henrietta Fore testified that the world’s one billion poorest people are living on one U.S. dollar per day, and that while Africa and Asia suffer most from this kind of poverty, Haiti is also facing a crisis. She also said that three-quarters of the world’s poorest people living on less than 50 cents per day are located in Africa. She advocated changing trade policies that present barriers to food supply and said that U.S. agricultural investment would be “enormously positive.” She mentioned that “even short term hunger” can “unalterably” affect a child through increased risk for disease, cognitive and developmental malfunction, and early death.

Sen. Richard Lugar (R-IN) said that people in nearly 40 countries face food shortages and potential civil unrest as a result. In 1980, he said, agricultural projects accounted for 30 percent of World Bank spending, whereas in 2007 that number was less than 13 percent. Along with Chairman Joe Biden (D-DE), he called for a “second Green Revolution” to increase agricultural research, development, and investment in order to augment yield per acre of crops by improving techniques. He said such an initiative would “benefit developed and developing countries alike,” as would removing trade barriers and tariffs. He also said that ethanol research cannot be curtailed because of its contribution to food price increases because it would put additional pressure on oil prices, which he emphasized is already at $120 per barrel.