Aviation and Airport Development Law : Aviation Lawyer & Attorney : Dr. Barbara E. Lichman : Airport Development, Environmental Law

Day Two of the Hearings on the American Clean Energy and Security Act, also known as the Waxman-Markey bill, proved to be as contentious as expected.  There was much evidence that the Bill would not have an easy road ahead of it, since the Committee is deeply divided.  Although there were a few forays into the ridiculous, (Rep. John Shimkus (R.-Ill.:  "I think this is the greatest assault on democracy and freedom that I've ever seen in Congress;" Energy Secretary Steven Chu comparing the Bill to Wayne Gretsky' famous comment that "I was good because I skated to where the puck will be" (upon reflection, that comparison does work)), the Committee focused its questions to Panels (which featured EPA Administrator Lisa Jackson, Energy Secretary Steven Chu and Transportation Secretary Ray LaHood) on the issues of jobs, allowances, energy costs, and American leadership in the world.

Jobs

In these times of economic uncertainty, no issue pulls at the hearts of politicians than jobs, especially when it can be used to hammer a point home.  Rep. Joe Barton (R.-Texas) led the way citing statistics from the National Association of Manufacturers, the Heritage Foundation, and Charles Rivers Associate claiming that the bill would result in anywhere from 1.8 to 7 million jobs "destroyed."  Rep. Shimkus made his statement about jobs in a more theatrical way, stating that "those of us who want jobs are going to try to defeat this bill" while hoisting a small lump of coal for the panelists to see.

On the other hand, the proponents of the Bill were not about to concede that the Bill would cause mass unemployment.  Rep. Waxman asked EPA Administrator Jackson, Secretary Chu, and Secretary LaHood if they believed that the Bill would create jobs.  Administrator Jackson replied that she believed the Bill is a "jobs bill."  Secretary LaHood added that the legislation would create jobs, "especially green jobs."  Secretary Chu agreed that the Bill would create millions of jobs and reduce America's dependence on foreign oil.

Cap-And-Trade and Allowances

The part of the Bill that drew the most fire were the allowances:  should they be given away or should be they auctioned or should there be some sort of hybrid.  Administrator Jackson stated for the record that the Obama Administration supported the idea that 100 percent of the allowances should be auctioned.  In response to Rep. Jay Inslee's (D.-Wash.) statement that we have to multiple approaches to addressing the problem through EPA regulations and a cap passed by Congress, Administrator Jackson stated that she "could not agree more."  A cap-and-trade law, she continued, was "powerful and necessary," but we need other regulations as well.

Understandably, the energy company officials who testified were not so eager to embrace a 100% auction.  They wanted at least some free allowances, while various scientists ad economists stated that a cap-and-trade with an auction is the only way to go.  Rep. Cliff Stearns (R.-Fla.) stated that "free carbon credits were windfall profits in Europe."  Contrast that statement with  Rep. Ralph Hall's (R.-Texas) statement that "we'll be in a weakened position if adopt cap-and-trade."  Thus, there is much work to get to a point where there can be agreement on whether there should be a cap-and-trade, let alone whether it should be a 100% auction of allowances or something else.

Energy Costs

The other big issue at the Hearing, particularly with respect to the later panels, was energy costs.  Rep. Barton told the Committee that "the debate is not about whether cap-and-trade legislation will raise energy costs; the only dispute is by how much." He then went on to cite "findings" that the Bill would increase household energy costs up to $3,128 per year and that "filling your gas tank will cost anywhere from 60 to 144 percent more.  The cost of home heating oil and natural gas will nearly double."  Rep. Fred Upton (R.-Mich.) commented that this was not a "cap-and-trade," this was a "cap-and-tax."

The response to this onslaught was a little more nuanced.  Secretary Chu responded that "it would be unwise to want to increase the price of gasoline" and then went on to outline the plans to lower transportation costs with electric cars, and low-carbon fuels, among other things.  In response to a question from Rep. Jane Harman (D.-Calif.) Secretary Chu indicated that refrigerators use one quarter the amount of energy they used in 1975 and these are real savings seen by households.  He then concluded by stating his belief that the "overall costs of living . . . can be held constant."  Even the ConocoPhilips Executive Red Cavaney stated that although there will be costs "the benefits to the overall American economy will outweigh these costs."

American Leadership

Another area of concern addressed at the Hearing was the wisdom of the United States regulating climate change when there are no assurances that the number one and two emitters in the world - China and India - will also take steps to reduce their emissions.  Rep. Ed Whitfield (R-Ky.) asked Secretary Chu:  "If we unilaterally move to take steps and China and India and other countries are not, how do we deal with that?"  Chu responded that that he believed that the United States should take a leadership role on this issue.  This sentiment was echoed by Rep. Diana DeGette (D-Colo.) who stated that she believed that America should lead and not wait for India and China to get their act together.

Compromise

Outside the Committee Room Rep. Rick Boucher (D.Va.) and Rep. Jim Matheson (D.Utah) stated that they would meet with Chairman Waxman to discuss a comprehensive amendment that could be presented on Thursday.  Rep. Boucher stated that the Bill's schedule was "achievable" but it would depend on whether an agreement could be quickly reached on issues including how to allocate credits to existing industries, the schedule for reducing carbon emissions and flexibility in meeting renewable electricity requirements.

Click on "continue reading" for a complete Witness List with links to the witnesses written testimony and links to the video of the Hearing.

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On Day One of a planned four days of hearings on the American Clean Energy and Security Act of 2009, also known as the Waxman-Markey bill, there were no surprises.  This day was devoted to "opening statements" by the members of the Committee, before the Administration's heavy hitters take the stage tomorrow. With a resounding "the time for delay and denial has come to an end," Chairman of the Energy and Environment Subcommittee, Rep. Edward Markey (D-Mass.) opened the hearings.

As could be predicted, the Climate Change skeptics were present.  Leading the way was Rep. Steve Scalise (R-La.) stating that the causes of global warming are far from settled.  Although not really doubting the existence of Climate Change, Rep. Michael C. Burgess (R-Texas) issued a veiled threat, claiming "we do have the capacity to withhold funding from the EPA" if the EPA chooses to regulate CO2 on its own.

Jobs and the economy were another major concern.  On the one hand you had Rep. Joseph Pitts (R-Pa.) who believes that the Bill will cost jobs and hurt an already hurting economy.  This was also the concern of Rep. Zachary Space (D-Ohio) who stated that the Bill is vitally important to the coal and manufacturing industries in Ohio - a state hard hit by the economic downturn.

On the other hand, Rep. Doris Matsui (D-Calif.) related that new companies in her district are building the "clean energy economy.  They are the realities of the modern American economy.  They are real businesses creating real jobs."  Likewise, Rep. John Sarbanes (D-Md.), added that clean energy jobs plan "is turning the Titanic around."  Rep. Jay Inslee (D-Wash.) is worried that we are already falling behind:  "we can't let China dominate the lithium battery car market.  We need to keep those jobs here.  This bill will do that."  That being said, Rep. Michael C. Burgess (D-Texas) threw cold water on the notion of a clean energy economy, stating that new energy technology should be left up to stronger, growing economies.

Representatives from both sides of the aisle from coal producing had comments about the effect the Bill would have on the coal industry.  Rep. Ed Whitfield (R-Ky.) said that he thought that because China is building more coal plants, the United States should, too.

One of the topics that was mentioned more than once was what should be considered to be "renewable energy."  Rep. Bart Gordon (D-Tenn.) stated that he wanted clean coal and nuclear to be considered renewable, as well as credits for renewable forms of energy.  Likewise, Rep. Baron Hill, (D-Ind.) came up with an interesting proposal - he wants municipal solid waste to be categorized as a renewable resource.

As can be expected, there were many questions and comments about the structure and goals of the bill itself.  Rep. Whitfield commented that the problems with the structure of the Bill "may dwarf" those of climate change.  Like wise, Rep. Jim Mattheson (D-Utah) had many objections to content and structure of the Bill.  Rep. G.K. Butterfield (D-N.C.) said that 20% by 2025 is impossible.  Thus, there is still much work to be done on the Bill.

At the same time, the EPA released its review of the Bill, concluding that the proposed curbs on U.S. greenhouse gas emissions would allow limited economic growth while spawning development of low-carbon energy technologies.

• Click here for EPA's Analysis
• Click here for the EPA's Analysis Appendix
• Click here for the EPA's Executive Summary

Tomorrow, the big guns are set to appear before the Committee:  EPA Administrator Lisa Jackson, Energy Secretary Steven Chu, and Transportation Secretary Ray LaHood are all scheduled to give testimony.

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As part of the California Air Resources Board's (CARB) "Climate Change Proposed Scoping Plan," the Board, on October 24, 2008, released its Preliminary Draft Staff Proposal on recommended approaches for setting Interim significance thresholds for greenhouse gases under the California Environmental Quality Act (CEQA).  Since these thresholds of significance will affect the conduct of EIRs for projects subject to CEQA, such as airport development projects and Airport Land Use Compatibility Plans, participation in the setting of these standards is critical.

California law provides that climate change is an environmental effect subject to the CEQA.  Lead agencies, such as Airport Land Use Commissions, are therefore obligated to determine whether a project's climate change-related effects may be significant, thereby requiring preparation of an Environmental Impact Report and to impose feasible mitigation to substantially lessen any significant effects.

CARB is specifically requesting participation from the public stakeholders and local lead agencies.  The Preliminary Draft Staff Proposal suggests a "sector approach" due to the fact that "(1) some sectors contribute more substantially to the problem, and therefore should have a greater obligation for emissions reductions, and (2) looking forward, there are differing levels of emissions reductions expected from different sectors in or to meet California's climate objectives."

The PDSP includes flowcharts that address CARB's "threshold concepts" for industrial projects and for residential and commercial projects.  The PDSP also states that that the staff is working on a proposal for an interim approach for thresholds for transportation projects.  CARB proposes, for example, a significance threshold of 7,000 metric tons of CO2e/year.  For Projects that go over that amount, an EIR would have to be prepared and "all feasible GHG mitigation measures implemented."

CARB has identified a few questions to solicit public comment, but notes that the "list is not exhaustive."

• Will the recommended approaches have any unintended consequences, for example, encouraging the piecemealing of projects?
• As set out in the attachments to the Staff Proposal, staff proposes to define certain performance standards (e.g., for energy efficiency) by referencing or compiling lists from existing local, State or national standards.  For some sub-sources of GHG emissions (e.g., construction, transportation, waste), ARB staff has not identified reference standards.  How should the performance standards for these sub-sources be defined?
• Are any of the industrial, residential, or commercial project types eligible for categorical exemptions likely to contribute more significantly to climate change than staff's preliminary analysis indicates?
• For residential and commercial projects, staff has proposed that the GHG emissions of some projects that meet GHG performance standards might under some circumstances still be considered cumulatively considerable and therefore significant.  What types of projects might still have climate change-related impacts?

As noted above, since these thresholds of significance will affect the conduct of EIRs for projects subject to CEQA, such as airport development projects and Airport Land Use Compatibility Plans, participation in the setting of these standards is critical.

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