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 The Waxman-Markey Bill (also known as the American Clean Energy and Security Act) hearings ended with a bang, featuring Former Vice President and Nobel Laureate Al Gore, former Senator John Warner and former Speaker of the House Newt Gingrich. The testimony they gave was no surprise, but it underlined the deep divisions that exist, at least at the political level, and the uphill battle that this Bill faces.

Gore's Testimony

Former Vice President Gore was first in the witness chair. He gave his standard (and very effective) stump speech about climate change: the country is at risk on three fronts: economy, national security and climate. He likened the Waxman-Markey bill to a civil rights bill: “the most important of our lives. It is a moral imperative.” He stated that it is an environmental Marshall Plan, which is what he called for (and outlined) in his book “Earth in the Balance.” Gore then started talking about “tipping points,” his belief that the levels of CO2 in the air and other factors that might tip the balance to a point that it is irreparable. He ended his statement with “the USA is the world’s leader. Once we find the courage to take on this issue the world will also act. We need to act.” 

The Climate Change skeptics on the Committee sought to discredit Gore, but were largely unsuccessful. First, Rep. Fred Upton (R.-Mich.) tried to paint Gore as being anti-nuclear. Gore responded that he is not anti-nuclear, it is just his belief that the problems associated with nuclear energy, i.e., waste, accidents, size, fuel sources, weapons issues, are not easily addressed. Rep. Steve Scalise (R.-La.) took a shot at Gore accusing him of conspiring with Ken Lay of Enron for setting up insider trading deals that are contained in the cap-and-trade portion of the Bill. Gore responded with the respect that such a comment deserves: “there are people that still think the moon landing was staged in a Hollywood studio.” Rep. Marsha Blackburn (R.-Tenn.) also attempted an ad hominem attack, asking whether Gore personally profited “from this push towards a cap-and-trade system?” She specifically referred to Gore’s presence on the Board of the firm Kliner Perkins. Gore responded incredulously “are you serious? Do you think I have devoted the past 30 years of my life to this cause just so I could benefit from a bill that is up for debate right now?” In all, the attacks on Gore did not move the skeptic’s agenda forward.

Warner's Testimony

Former Sen. Warner, a Republican from Virginia, who was the co-author of last year’s Warner-Lieberman Bill which covered much of the same ground as this bill, echoed Gore.  Warner stated that “energy independence, global climate change and national security are very interwoven.” Warner recognized that there will be costs to industry and to the people, but that “if we keep on with business as usual, we will reach a point where the worst effects are inevitable.”

Gingrich's Testimony

By contrast, former Speaker of House Newt Gingrich’s testimony focused on his proposal that instead of clean energy, the U.S. ought to expand off-shore drilling, oil shale, oil refineries, “green” coal, and nuclear energy to resolve its energy security issues. Gingrich heightened the rhetoric by calling the EPA economic analysis “intellectually dishonest” in not presenting both sides of the story. This tactic, reminiscent of the debate over evolution, seeks to paint one side as presenting something that is not certain and claiming that that side is not releasing all of the facts. 

The Democrats ripped into Gingrich. Chairman Henry Waxman (D.-Calif.) excoriated Gingrich for using scare tactics and talking in circles, ending by asking “if you are scared to work with us, what are doing here?” Likewise, Rep. Jay Inslee (D.-Wash.) asked Gingrich “you were asked in 2007 if you supported a cap on carbon. You responded ‘frankly, it is something I would strongly support.’ What happened?” Indeed, Gingrich appeared in ads for Gore’s “We” campaign promoting the reduction of greenhouse gas emissions. Gingrich did not have a reply.

Industry and Regulator Testimony

In the afternoon, various industry officials paraded before the Committee to ask for specific changes to the Bill that would benefit their industry and regulators stating that those changes should not be made. For example, Dr.  Dan Sperling from the University of California at Davis stated that the California Air Resources Board voted for a Low Carbon Fuel Standard, and the U.S. should follow California’s lead. On the other hand, Charles Drevna, President of the National Petrochemical and Refiners Association testified that Low Carbon Fuel Standard is redundant, costly and punitive. There were a few good points made, though. Ian Bowles, from the Massachusetts Office of Energy and Environmental Affairs, updated the Committee on Massachusetts’ experience with 100% auctions, concluding that auctions work and they work “brilliantly.”

Click on "Continue Reading" for a Witness List with links to their prepared testimony as well as links to video of the session.

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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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Over two years ago, on April 2, 2007, the Supreme Court in Massachusetts v. EPA, 549 U.S. 497 (2007), directed the EPA Administrator to determine whether or not emissions of greenhouse gases from new motor vehicles cause or contribute to air pollution which may reasonably be anticipated to endanger public health or welfare, or whether the science is too uncertain to make a reasoned decision.  Finally, after two years and much hand-wringing, EPA Administrator Lisa Jackson issued her proposed finding that carbon dioxide, methane, nitrous oxide, hydrofluorocarbons, perfluorocarbons and sulfur hexafluoride may endanger public health or welfare.

In actuality, the EPA proposed two findings:  (1) an endangerment finding, that the six GHG endanger public health and welfare; and (2) a “cause and contribute finding” that the combined emissions of carbon dioxide, methane, nitrous oxide, and hydrofluorocarbons from new motor vehicles and motor vehicle engines contribute to the atmospheric concentrations of these key greenhouse gases and hence add to the threat of climate change.

EPA characterizes its proposed Endangerment Finding as follows:

This is not a close case in which the magnitude of the harm is small and the probability great, or the magnitude large and the probability small. In both magnitude and probability, climate change is an enormous problem. The greenhouse gases that are responsible for it endanger public health and welfare within the meaning of the Clean Air Act.

The EPA, however, was careful to walk a fine line between complying with the dictates of Massachusetts and actually regulating GHG.  While this proposed rule does not actually regulate GHG,  it does propose defining greenhouse gases as “air pollutants” under the Clean Air Act. EPA proposes defining the six GHG as a single pollutant, rather the defining them individually - similar to the approach the EPA took with ozone years ago. EPA explained its decision as follows:

It is the Administrator’s judgment that this collective approach for the contribution test is most consistent with the treatment of greenhouse gases by those studying climate change science and policy, where it has become common practice to evaluate greenhouse gases on a collective CO2-equivalent basis

Although the EPA usually issues emission control standards concurrently with an endangerment finding, in this case, the EPA indicated that the emission standards would be issued “several months from now.”   This bifurcation of the normal process has been taken by observers to mean that these rules are meant to goad the Congress into action, rather than a serious proposal that EPA regulate GHG.  Indeed, the EPA’s Press Release on the Endangerment finding specifically stated that “[n]otwithstanding this required regulatory process, both President Obama and Administrator Jackson have repeatedly indicated their preference for comprehensive legislation to address this issue and create the framework for a clean energy economy.”

And Congressional leadership seems ready to oblige.  Rep. Edward Markey (D.Mass.), Chair of the Energy and Environment Subcommittee, had this to say about the EPA’s Endangerment Ruling:

This decision is a game-changer. It is now no longer a choice between doing a bill or doing nothing. It is now a choice between regulation and legislation. EPA will have to act if Congress does not act.

Markey and Rep. Henry Waxman (D-Calif.) have introduced the American Clean Energy and Security Act of 2009 (ACES) to set up a system for reducing emissions from all sources and creating a financial incentive for companies to stay within emission limits.   See, “U.S. House Energy and Commerce Committee Releases Draft Climate Change Act,” posted April 2, 2009.  Waxman wants to pass the bill from his Energy and Commerce Committee by the end of May, but its fate is uncertain in the Senate.

Aircraft and other aviation sources seem to have received a pass with respect to these regulations:

EPA has received a petition under the Act to consider the regulation of 64 aircraft emissions (water vapor and NOx) that lead to formation of contrails (in addition to aircraft greenhouse gas emissions), and EPA plans to evaluate this issue further. At this time, the Administrator is not proposing to include aircraft-related contrails or emissions that are not greenhouse gases within the definition of air pollution for purposes of section 202(a).

This does not mean, however, that once the emission control standards are promulgated (if they are promulgated), aviation sources will not also be regulated.  Likewise, the Waxman-Markey bill may affect aviation sources as well.

A 60-day comment period will follow publication of the proposed rule in Federal Register, which has not yet occurred.  There will be public hearings in Arlington, Virginia, and Seattle, Washington in May, 2009.   Click on Continue Reading at the bottom of this post for details about written comments and public hearings.

Previous posts on this subject:

• “U.S. House Energy and Commerce Committee Releases Draft Climate Change Act,” posted April 2, 2009.
• “EPA Proposes National Reporting Rules for Greenhouse Gases,”  posted March 10, 2009.
• “U.S. House Subcommittee Hears Testimony on  Problems of Carbon Offsets in Climate Change Legislation,”  posted March 5, 2009.
• “EPA Administrator Issues Memorandum Prohibiting Controls on Carbon Dioxide in Clean Air Act Permits,” posted December 21, 2008.
• “GAO Issues ‘Expert Opinion on the Economics of the Policy Options to Address Climate Change,’” posted June 9, 2008.
• “Senate ‘Debates’ Global Warming Bill,”  posted June 9, 2008.
• “EPA Administrator States that Greenhouse Gas Regulation May Not Be Issued Until After January, 2009,”  posted May 20, 2008.
• “States File Lawsuit to Enforce Ruling in Massachusetts v. EPA,”  posted April 3, 2008

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