President Bush Signs Energy Bill into Law; EPA Immeidately Uses New Legislation to Reject California's Clean Air Act Wavier Request

President Bush signed the 2007 federal energy bill into law today. The new legislation will boost fuel economy standards for vehicles and increase renewable fuel production, but is actually a major step backward for the renewable electricity industry, particularly solar and wind.

National Public Radio takes an in-depth look at the provisions of the new legislation, including an interview with Tom Carnahan (mp3), president of the Wind Capital Group. Mr. Carnahan discusses the likely impact of the failure to extend the production tax credit for renewable projects.

Meanwhile, on a related issue, EPA has just rejected California's request for a Clean Air Act waiver to implement tighter carbon dioxide emissions standards for vehicles. EPA's justification? We like the fuel economy standards in the new energy legislation better:

The Environmental Protection Agency on Wednesday slapped down California's bid for first-in-the-nation greenhouse gas limits on cars, trucks and SUVs, denying a request for a waiver that would have allowed those restrictions to take effect.

``The Bush administration is moving forward with a clear national solution - not a confusing patchwork of state rules,'' EPA Administrator Stephen L. Johnson told reporters on a conference call. ``I believe this is a better approach than if individual states were to act alone.''

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In explaining his decision, Johnson cited energy legislation approved by Congress and signed into law Wednesday by President Bush. The law requires automakers to achieve an industrywide average fuel efficiency for cars, SUVs and small trucks of 35 miles per gallon by 2020 - the first increase in the federal requirement in 32 years. That law``achieves the greatest greenhouse reductions in the history of the United States,'' Johnson said, and is preferable to a state-by-state approach.

Governor Schwarzenegger has already indicated that California will appeal the determination.

UPDATE: The L.A. Times has more on EPA's waiver request denial as does Green Car Congress. EPA's explanation of its decision is here.

House Passes Revised Energy Bill; President Bush Expected to Sign Wednesday

The U.S. House approved a revised version of the federal energy bill today on a vote of 314-100. The legislation returned to the House for final approval last week after the Senate dropped key renewable energy provisions from the bill.

President Bush is expected to sign the bill into law tomorrow.

The AP has more.

Senate Passes Energy Bill; Key Renewable Energy Provisions Axed

The U.S. Senate passed a watered-down version of the federal energy bill yesterday 86-8. Democratic leaders dropped key renewable energy provisions from the legislation after a cloture vote failed by one vote.

That move leaves federal support for the renewable energy industry in limbo. The vast majority of federal renewable energy tax credits where last renewed in 2006, and are due to expire at the end of 2008.

The House version of the bill originally included an extension of important credits, including the production tax credit (PTC) for renewable electricity generation and a solar investment tax credit. The Senate version that failed yesterday morning included a 2-year extension for many of these credits, but even that limited extension was axed in the final bill that passed last night.

Loss of federal tax credits could be devastating for the renewable energy sector, particularly for the wind energy and solar energy industries, which are just starting to hit their stride.

We've previously discussed the importance of these programs to the long-term stability of the industry. As other observers have noted, wind project development often grinds to a halt 6-8 months before the expiration of the PTC. Projects that haven't started construction by then risk not coming on-line in time to take advantage of the credit. If that trend holds true the wind industry could be looking at a slow-down in the next six months.

The lack of tax credits will have a similar impact on commercial solar investments outside California, according Barry Cinnamon, CEO of Akeena Solar, who was interviewed today by the San Jose Mercury News.

Senator Reid says the Senate will try to pass a tax credit extension in a separate legislative package in January. In the meantime, the oil & gas industry has walked away holding the tax bag - and the renewable energy industry is left holding its breath (again).

One Vote Short; Senate Fails to Proceed With Federal Energy Bill

The Hill is reporting that the Senate vote to proceed with the energy bill fell short by one vote, 59-40. According to the article, Senate Majority Leader Harry Reid plans to strip out the renewable energy tax package and try to pass the remainder of the bill this afternoon.

CNN also has a report on the vote.

U.S. Renewable Energy Use to Double by 2030

The Energy Information Administration (EIA) released its annual long-term U.S. energy forecast yesterday (large pdf). The EIA's new analysis anticipates that renewable energy use will double by 2030. According to the Annual Energy Outlook 2008 Report:

The use of renewable technologies for electricity generation is stimulated by improved technology, higher fossil fuel prices, and extension of the tax credits in EPACT2005. The reference case also includes State RPS programs where the legislation is in place. Total renewable generation in the AEO2008 reference case, including combined heat and power (CHP) and end-use generation, grows by 2.1 percent per year, from 385 billion kilowatthours in 2006 to 631 billion kilowatthours in 2030. The projection for renewable generation in the AEO2008 reference case, which includes State and regional programs, is significantly higher than the comparable AEO2007 projection.

Reuters has a report on the new forecast. A summary of the AEO2008 report is available on the EIA's website.

Senate Energy Bill Showdown Expected Tomorrow

According to reports, Senate Democrats plan to press ahead this week with an energy bill that maintains a substantial renewable energy tax package. Democratic leaders have dropped plans for a 15% renewable energy portfolio standard, but believe that they can pass a revised version of the bill which still includes portions of the $21 billion renewable energy tax package passed by the House last week.

The original House version of the bill stalled in the Senate on Friday when it failed to gain enough support to survive a Republican filibuster threat. E&E Daily reports (subscription required) that a cloture vote on the revised energy bill is expected tomorrow:

The Senate will vote as soon as tomorrow on a revised energy bill that Democrats have altered to win more support. They have jettisoned a controversial renewable electricity mandate and altered some tax provisions.

But the bill is expected to retain higher oil company taxes to help fund renewable energy incentives. Plans to push ahead with a tax plan -- which increases taxes on oil companies by more than $13 billion -- are prompting conflicting predictions about whether the bill can overcome a GOP-led filibuster. And if it does, a White House veto threat looms.

The central provisions of the energy bill, which enjoy wider support, are increased auto mileage standards, an expanded biofuels mandate, and a host of conservation measures such as phasing out inefficient light bulbs.

Over at Gristmill, Bill Becker, Executive Director of the Presidential Climate Action Project, takes a closer look at the oil & gas industry's arguments against the renewable energy tax package:

One of the potholes the bill has encountered is its $13 billion take-back from Big Oil. The bill proposes to repeal tax breaks given to the industry by the Republican-controlled Congress in 2004-2005 and to close some tax loopholes that allow oil companies to game the system when they report income from foreign oil and gas extraction.

Predictably, the oil industry and the White House complained about a tax increase and warned of higher prices at the pump -- two time-tested themes to trigger knee-jerk opposition from the public.

Let's break it down.

First, rolling back a tax break isn't the same as raising a tax. It's the equivalent of having the oil industry return a gift it doesn't need or deserve, rather than picking its pockets.

Second, while oil companies might use the rollback as an excuse to raise gasoline prices, it wouldn't be the fault of the energy bill. The U.S. Energy Information Administration says that subsidies in this range are "too small to have a significant effect on the overall level of energy prices and consumption in the United States." In other words, subsidies at this scale don't lower energy prices, and their repeal won't raise them.

Federal Energy Bill Stalls In Senate

The Hill reports:

The Senate Friday voted against taking up the energy bill approved by the House earlier this week, making it likely that some provisions in the House bill will have to be stripped in order for Congress to complete a final energy package.

In a 53 to 42 vote, the Senate rejected a motion by Majority Leader Harry Reid (D-Nev.) to invoke cloture on the House energy bill, which could have led to a vote on the package itself.

Immediately after the vote several senators rose to say they would work to seek a compromise, including Sen. Pete Domenici (R-N.M.), the top Republican on the Energy and Natural Resources Committee. He said Friday’s vote marked the beginning of a process to complete work on an energy package in this Congress.

The Washington Post has the AP report up.

Those tracking the legislation expect the Senate to dismantle or discard the renewable portfolio standard and renewable energy tax package in the House version.

U.S. House Approves 2007 Federal Energy Bill; Senate Cloture Vote Expected Saturday

The U.S. House of Representatives has approved the energy bill (H.R. 6) on a vote of 235-181.

The AP reports:

The House approved the first increase in federal automobile fuel efficiency requirements in three decades Thursday as part of an energy bill that also repeals billions of dollars oil company tax breaks and encourages use of renewable fuels. The bill, passed by a vote of 235-181, faces a certain filibuster in the Senate and a veto threat from the White House.

Democrats characterized the legislation as ``a new direction'' in U.S. energy policy away from dependence on fossil fuels. But Republicans said the actions amount to government mandates that would lead to higher energy prices, while doing little to produce more domestic oil or natural gas - fuels they say will remain essential for decades to come.

The action now shifts over to the Senate. Majority Leader Harry Reid apparently wants to move soon on the bill, according a report earlier today from E&E Daily (subscription required):

Reid wants the Senate to act quickly when and if the House passes the bill. He said on the Senate floor Wednesday that he plans to file for cloture -- which means cutting off debate -- on the bill today. A spokesman said a Saturday cloture vote is likely. The timing of a subsequent vote on the bill itself is not clear.

David Roberts over at Gristmill has a similar report.