The Republican Energy Bill

The Republicans put up an alternative to the Kerry-Lieberman energy bill yesterday via Sen. Richard Lugar (R-Ind.). For starters, it’s much smaller (112 vs. 987 pages) and has fewer titles (4 vs. 7) than Kerry-Lieberman. It is called the Practical Energy and Climate Plan Act of 2010 vs. The American Power Act. We don’t know if Lugar will have a nice logo drawn up for his bill, as Kerry and Lieberman did for theirs. Lugar has posted a video of his press conference introducing it. See that on his home page, along with a lot of links.

Let’s see what the bill offers:

• No provisions for mandatory reductions in carbon emissions – that is, no cap-and-trade or carbon tax. Lugar has ideas on how to achieve carbon emission reductions, so hold tight.
• The bill heavily stresses energy efficiency, especially as regards cars, trucks and light vehicles.
• And buildings, too. The bill proposes $2 billion to DOE to use as a basis for loans, loan guarantees and other financial tools to help homes and businesses retrofit for energy efficiency.
• It cuts back on foreign oil imports by encouraging domestic oil production. It’s silent (at least on our first read) on off-shore oil drilling.
• Coal plants do not need to introduce new technology as long as they close by 2018.
• Biofuels get a big push, especially algae-based fuel and especially not grain-based fuel. Lugar proposes $250 million per year to DOE over the next five years to seed this effort.

We’re not completely sure we understand the clean energy provisions, but the bill proposes that states can include “clean coal,” nuclear energy (but see below) and energy efficiencies (presumably a national standard) toward carbon emission reduction goals.

Those goals are 15 percent by 2015, incrementing to hit 50 percent by 2050. How different states would accommodate this is where we’ll need further explanation, as the states will start off in drastically different places based on their current electricity production.

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Oh, and what about nuclear energy? There’s strikingly little, with only two mentions in the bill.

Lugar proposes $36 billion in additional loan guarantees for 2011 (for a total of $54 billion), equal to the amount requested in the 2011 DOE budget request.

Only new nuclear plants qualify in the clean air goals specified above. This is also true of hydroelectric plants, though (apparently) uprates to existing hydro count but not uprates to existing nuclear plants. (By uprates, we mean adding capacity.) We don’t get this one at all – it’s as if using existing nuclear energy to further reduce carbon emissions is cheating or too easy.

So that’s it. Do read the whole thing – if we’ve misread a section, let use know in comments and we’ll correct.

Bills offered by the minority traditionally do not gain much traction, but this one may buck that common wisdom a bit by de-stressing climate change issues and anything that could be called a “carbon tax.”

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Energy Secretary Steven Chu sent a letter to Sen. Lugar about his bill. There’s this:

I appreciate your ideas for reducing America's oil dependence - which has taken on greater urgency as a result of the BP oil spill.  I also commend your focus on energy efficiency, which as you have noted is the fastest, cheapest route to our energy and climate change goals.  Even as we focus on efficiency, we also need a broad approach that includes building the next generation of nuclear power plants, deploying technologies to burn coal more cleanly, significantly expanding renewable power generation and a host of other clean energy technologies.

That’s pretty positive. And this:

I continue to believe that to fully capitalize on these opportunities we need comprehensive legislation that puts a price on carbon and makes clean energy the profitable kind of energy.

Oops! Well, Lugar probably expected that.

Sen. Richard Lugar presents his bill.