WRAP UP

Tamar Hallerman and Lindsay Kalter
GHG Monitor
11/30/12

IN CONGRESS

The House Energy and Commerce Committee this week announced its leadership for the next Congress, and most of the key posts related to the Department of Energy in the Committee will continue to be filled by the same lawmakers. Fred Upton (R-Mich.) will remain the full Committee’s chairman, while Rep. Marsha Blackburn (R-Tenn.) was named the full Committee’s vice chair. Ed Whitfield (R-Ky.) will remain chairman of the Energy and Power Subcommittee, and John Shimkus (R-Ill.) is staying on as head of the Environment and Economy’s subcommittee. However, Rep. Tim Murphy (R-Pa.) is taking over the Oversight and Investigations subcommittee from Rep. Cliff Stearns (R-Fla.), who was defeated in a fierce primary battle earlier this year. “I am grateful to my colleagues for continuing to place their trust in me and the entire Energy and Commerce team. We have a talented group of leaders with the experience, expertise, and diverse backgrounds that make us well positioned for the important work that lies ahead in the next Congress,” Upton said in a statement.

Rep. Shelley Moore Capito (R-W.Va.) announced Monday that she would challenge Sen. Jay Rockefeller (D-W.Va.) for his Senate seat in 2014. In a statement this week, Rockfeller did not directly address Capito’s announcement, but instead emphasized that his “total focus right now is on the national budget situation and the fight for West Virginia families.” Capito throwing her hat into the ring could mean that the “war on coal” rhetoric that percolated throughout this year’s campaign cycle will likely continue over the next two years.  Rockefeller has been heavily criticized by West Virginia’s powerful coal industry over the last six months following a particularly scathing assessment of the industry in a floor speech this summer. Rockefeller criticized the industry for failing to modernize, instead focusing its attention almost exclusively on fighting “false enemies” like the EPA. At a subsequent public meeting, Rockefeller said he did not regret his remarks. “This issue had been gnawing at me for many years,” the senior senator was quoted as saying. The 75-year-old senator has not announced whether he will run for sixth term in the Senate.

Lamar Smith, a Texas Republican who has previously expressed skepticism about whether global warming is occurring and whether humans are contributing to it, was named the new chairman of the House Science Committee this week. Smith will replace current Chairman Ralph Hall (R-Texas), who is term limited under GOP rules, in January. Smith has in the past criticized the mainstream news media for not displaying enough “dissenting opinions” about global warming. “[ABC, CBS and NBC] have shown a steady pattern of bias on climate change,” Smith said in a statement in 2009 during the cap-and-trade debate. “During a six-month period, four out of five network news reports failed to acknowledge any dissenting opinions about global warming, according to a Business and Media Institute study. The networks should tell Americans the truth, rather than hide the facts.” The House Science Committee has jurisdiction over energy R&D at the Department of Energy and Environmental Protection Agency and also oversees the National Science Foundation and the National Weather Service. Smith has served as chairman of the House Judiciary Committee in the current Congress.

The presumptive new top Republican on the Senate Environment and Public Works Committee announced this week that he will be introducing a concurrent resolution that states that Congress does not believe that a carbon tax is in the country’s best economic interest. Sen. David Vitter (R-La.) and Rep. Mike Pompeo, a Kansas Republican on the House Energy and Commerce Committee, said they would soon introduce the resolution in both houses of Congress and that they are currently trying to gain support from colleagues. “There’s a lot of talk in Washington about raising taxes, and finding ‘revenues’ in creative ways, to avoid going over the fiscal cliff,” Vitter said in a statement. “But a carbon tax—which would force more financial hardship upon family budgets, energy consumers and job seekers—needs to be completely taken off the table. Our resolution would enshrine that.” In recent months, policymakers have discussed a carbon tax as a potential fix for the so-called ‘fiscal cliff,’ but in recent weeks the White House and top lawmakers have backed away from the issue.

IN THE STATES

California’s first auction of carbon allowances earlier this month ahead of its cap-and-trade program start date was a “success,” the state’s air chief said. “The auction was a success and an important milestone for California as a leader in the global clean tech market,” Air Resources Board (ARB) Chair Mary Nichols said in a statement following the Nov. 14 auction. “By putting a price on carbon, we can break our unhealthy dependence on fossil fuels and move at full speed toward a clean energy future.” ARB said last week that the auction sold more than 23 million carbon allowances for 2013 while netting more than $233 million for the state. Regulators said allowances sold for slightly more than the established floor price of $10 per ton. Roughly 350 of California’s largest industrial emitters, which operate roughly 600 facilities, participated in the auction. The trading scheme will be expanded in 2015 to include heating and transportation fuel distributors.

A new report from the Government Accountability Office is the latest analysis to predict widespread coal capacity retirements over the next few decades due to a combination of factors such as cheap natural gas prices and new environmental regulations. However, the report underscores that coal will continue to be a major force in electricity generation in the years to come. “According to stakeholders and three long-term forecasts GAO reviewed, coal is generally expected to remain a key fuel source for U.S. electricity generation in the future, but coal’s share as a source of electricity may continue to decline,” GAO says in the report, which does not make any policy recommendations. As part of its analysis, GAO examined statements from utilities about coal unit retirement plans, interviewed stakeholders and reviewed long-term energy forecasts from groups like the Energy Information Administration. GAO projects that companies will retire 15 to 24 percent of the country’s coal capacity by 2035.

ON THE INTERNATIONAL FRONT

Statoil and Gassnova confirmed last week that all five post-combustion carbon capture technology suppliers vying to be named the equipment vendor for Norway’s first full-scale carbon capture and storage facility at Mongstad have been awarded contracts for the concept phase of the facility’s technology qualification program. Statoil and Gassnova said Mitsubishi Heavy Industries, Alstom, Siemens AG, Aker Clean Carbon and Huaneng-CERI Powerspan all received the green light to move forward with the third and final phase of the program. “Statoil and Gassnova are satisfied with the progress in the technology qualification and the cooperation with all companies involved, and believe the award of contracts is an important step towards realizing a full scale CO2-capture facility at Mongstad,” the two companies said in a joint statement. Under this concept phase, vendors must draw up a potential plant design for the facility incorporating their technologies. The competitors previously completed feasibility work and are in the process of finishing 3,000 hours of performance testing.

Despite global pledges to reduce carbon emissions, the World Resources Institute reports that a total of 1,199 new coal-fired plants are being proposed across 59 countries, which amounts to 1,401,278 MW of generating capacity. According to a recent report from the Institute, plants in China and India comprise 76 percent of these proposed facilities, and new plants have also been proposed in 10 developing countries including Cambodia, the Dominican Republic and Sri Lanka. The new facilities have come from 483 power companies, with China Huaneng Group proposing the most.  The report cites International Energy Agency estimates that global coal consumption reached 7,238 million tonnes in 2010. In addition, the IEA estimates that global coal trade increased to over 13 percent in 2010.

IN THE INDUSTRY

Exxon Mobil Corp. last week reiterated its support for a carbon tax, a show of support that could aid supporters’ efforts to instate such a mechanism as part of Congressional ‘fiscal cliff’ negotiations. “Combined with further advances in energy efficiency and new technologies spurred by market innovation, a well-designed carbon tax could play a significant role in addressing the challenge of rising emissions,” said Kimberly Brasington, a spokeswoman for the company, in an e-mail released by Bloomberg. “A carbon tax should be made revenue neutral via tax offsets in other areas.” The company could benefit from a carbon tax, being the largest natural gas producer in the U.S. Exxon opposed the so-called Waxman-Markey cap-and-trade bill in 2009.