Is Cap-and-Trade the Answer?

Coffee Brown, University of New Mexico, Talk Radio News


At the Washington Post Company Conference on "Planning for a Secure Energy Future," Rep. John Dingell (D-Mich.) said, "We are the Saudi Arabia of coal." It's harmful, he acknowledged, but we have it in abundance and we’re dependent on it. If we don't use coal, China and India will. We should have committed to alternative energy 30 years ago, "but American attention to these matters goes on and off like the light when you throw the switch," he said.
Clean coal is a relative term. We can substantially reduce emissions, but how and at what cost will involve serious debate, he said.
"The Europeans have had at least two fine messes" applying cap-and-trade, Dingell said, adding that there are many options, all having flaws, and Congress will have a huge fight over them.
Jay Inslee (D-Wash.) said coal is a great energy source, "but it has one bad feature: if we burn the coal reserves that we know exist in this country and in China, the planet will cook." He said the coal industry needs cap-and-trade, because if it does not become clean, it becomes unsustainable. Cap-and-trade revenue could fund the necessary research. "The future of this industry depends on the existence of that research," he said. "These are job-creating opportunities."
We have overestimated the cost and difficulty of such projects, according to Inslee. We had to commit to the Apollo project, and then we succeeded. "We are on the cusp of enormous technological transformation, but it cannot happen at the pace it has to happen unless we have (the pressure that cap-an-trade would exert),” he said. “As long as we can burn coal that is not sequestered, it strangles in the bed all of these new companies that are champing at the bit to start getting going." "This pace of global warming is not Al Gore's schedule,” he said, adding that it is a fact of nature and it is happening much faster than had been predicted even one year ago.

Rep. Fred Upton (R-Mich.) said, "By the year 2020, our country is expected to need 40 percent more electricity generation than we're using today. Coal has to be part of that picture." It's about 53 percent of total national energy generation.
We are not building new coal plants, and China is building many, he said, “and they're not using carbon capture.”
Pointing out that efficient carbon capture is 10-15 years away, but cap-and-trade starts immediately and benchmarks begin in 2012, Upton says that the technology should precede the regulations.

Rep. Greg Walden (R-Ore.) agrees: "This is like (anesthetizing) the patient while the researchers are still trying to figure out how to operate." He characterized cap-and-trade as a redistribution of wealth from businesses to individuals. "Far from being a job creator, I think this could be a huge job killer."
He said that when cap-and-trade decreased sulfur dioxide emissions, circumstances were different.
All of the participants at the conference agreed on the reality and the danger of climate change, but debated whether various alternative energies are practical, and whether cap-and-trade should drive the reduction of carbon emissions or await more cost-effective technology.

U.S. struggling to keep up with U.A.E. in renewables

At the 11th Annual Congressional Renewable Energy and Energy Efficiency Expo and Forum, several representatives delivered remarks on the potential of private sector businesses in the support of renewable energy. Private companies lobbying for federal assistance presented such products as private home and community wind generators.

Senator Wayne Allard (R-Colo.) said the private sector is the most appropriate and efficient means to expand renewable energy sources. Congressman Zachary Wamp (R-Tenn.) said the transition from natural gas to renewable fuels is "the most important challenge of our generation." Congresswoman Gabrielle Giffords (D-Ariz.) said the U.S. has a lot of work to do to catch up with countries like Germany and the United Arab Emirates in terms of renewables. Congressman Jay Inslee (D-Wash.) said the U.S. needs to find freedom from its slavery and addiction to oil. He added that renewable energy is a huge economic growth opportunity and also "saves the planet."

The blame game: What’s causing high gas prices?

The role of market speculation and its effect on the dramatic increases in the price of oil was discussed by the House Energy and Commerce Committee’s Oversight and and Investigations Subcommittee. Rep. Michael Burgess (R-Texas) stated that the American economy will not be sustainable if high prices at the pump continue to climb.

Rep. Jay Inslee (D-Wash.) said a solution to inappropriate speculation would help to lower prices in the short term, contrasting this idea with calls to increase supply by drilling in the ANWR. Inslee said that these measures would affect future generations but have no immediate result now. Rep. Bart Stupak (D-Mich.) stated that speculation of future demand for oil has played a large role in oil’s price increase and that one can solve the issue of high prices by traveling to New York or Chicago.

Rep. Joe Barton (R-Texas) said the cost of oil can be attributed to low supply, not market speculation. Barton suggested opening the Strategic Petroleum Reserve and selling two million barrels each day. Barton said this would return oil prices to under $100 per barrel. He noted that the Bush administration opposes this strategy and that its success would rely on an act of Congress. Rep. Greg Walden (R-Ore.) said supply and demand principles, as well as deflation and market forces cannot be ignored.

Michael Masters of Masters Capital Management said that investment firms are good at making profits but ignore the long-term consequences of their decisions, naming the subprime mortgage crisis as an example. Inslee recalled being told by Vice President Dick Cheney that he did not understand economics when he presented Cheney with information concerning Enron, comparing that experience with what he views as the Bush administration’s refusal to acknowledge the effect of futures markets on oil.

Gas prices making us reach for change

Consumers are being tipped upside down by the big oil companies, with money being shaken out of their pockets at the pump. This statement made by Chairman Edward Markey (D-MA), was widely echoed by all members of Congress present at the House Select Committee on Energy Independence and Global Warming. President Bush, he said, refuses to use our oil reserves, and not only is that something that can be done, it is something that should be done. Congressman James Sensenbrenner (R-WI) echoed that by adding that they need to put aside bipartisanship and releasing the reserves was essentially paying attention to Economics 101.

Congressman Jay Inslee (D-WA) made an even stronger statement, saying ‘when your house is on fire it is more important to get the hose instead of take out another insurance policy.’ Why is it, he said, that we regulate wheat but not gas? Speculation is driving up prices, and the administration has refused to help us.

And that speculation of world condition is 1/3 of the price per barrel, according to Dr. Mark Cooper, Director of Research at the Consumer Federation of America. America uses 1/4 of the oil in the world, and that 1/3 price is actually $38 dollars a barrel [as of today]. A side effect of high gas prices, is that trucks deliver almost all the consumer goods in the United States, Dave Berry, Vice President of the Swift Transportation Company, Inc, added. The high prices of gas and/or diesel are causing prices in consumer goods to go up, since they are trucked from place to place.

Kevin Book, Sr. Vice President & Senior Analyst for Energy Policy, Oil, & Alternative Energy, summed up the crisis as follows: We need to save energy on a daily basis and quit our oil addiction. This element was not expanded on, and instead all the questioning reverted to whether or not the panel thought that President Bush should deploy the Strategic Petroleum Reserve. The answer was a very enthusiastic “yes” from Dave Berry. We’d like the President to stop filling the SPR, he said, and consumers at the pump will see the benefit.