The Senate voted 91-0, last night (6/11/07) on the "motion to proceed" to consideration of its version of a comprehensive energy independence bill, S. 1419, the Renewable Fuels, Consumer Protection and Energy Efficiency Act of 2007. The Senate started debating the bill in earnest today, with numerous amendments expected in coming weeks.
The bill is designed to reduce reliance on oil imports and increase energy efficiency. It would boost corporate average fuel economy (CAFÉ) standards to 35 miles per gallon by 2020 and expand the renewable fuels production mandate to 36 billion gallons by 2022, with 21 billion of those gallons coming from advanced biofuels such as cellulosic ethanol rather than corn ethanol. It would also provide funding to spur production of advanced biofuels and new-technology vehicles, increase appliance and federal building efficiency and advance the demonstration of carbon sequestration technologies. Lastly, the measure would create new civil and criminal penalties for gasoline "price gouging."
The Senate Finance Committee is expected to mark-up an energy tax package later this month that will likely be added to the energy measure before final passage.
We anticipate several major floor battles. They include, but are not limited to, an intense debate on corporate average fuel economy (CAFÉ) standards, a federal renewable portfolio standard (RPS), funding for coal-to-liquid (CTL) technology, and additional environmental restrictions on bio-fuels.
CAFÉ Amendments Expected
On CAFÉ, the bill currently mandates an average of 35 miles per gallon by 2020 for cars and light trucks. Sen. Carl Levin (D-MI) is working on an amendment that would modify the underlying bill to require 36 mpg for passenger cars by 2022 and 30 mpg for light trucks by 2025. Levin has said his bi-partisan approach would "boost efficiency without harming the domestic auto industry." His amendment, which is still under development, is also said to include industry incentives for biofuels, plug-in hybrids, and other "leap ahead" technologies.
RPS vs. CPS Standard
On the federal "renewable portfolio standard" (RPS), there is competition between two proposals: one being advanced by Senate Energy and Natural Resources (ENR) Committee Chairman Jeff Bingaman (D-NM) that would require utilities to provide 15 percent of their power from renewable energy sources by 2020. The other proposal is being advanced by the ENR Committee's Ranking Member Pete Domenici (R-NM). It would create a broader "clean portfolio standard" (CPS) that allows carbon storage and sequestration projects, new nuclear and new hydropower generation as well as energy efficiency and demand side management programs to count toward a federal mandate of 20 percent by 2020. (For a copy of the Domenici CPS amendment please contact Lori Pickford at lpickford@morganmeguire.com.)
The dueling plans are generating heavy lobbying, with some utilities, particularly those in the Southeast, pushing the CPS while environmentalists are pressing lawmakers to restrict the plan to renewable sources.
Coal-to-Liquid Amendments Expected
Sen. Jim Bunning (R-KY) is planning to offer an amendment to require use of coal-to-liquid (CTL) fuels for the transportation sector. Bunning and the late Sen. Craig Thomas (R-WY) offered an amendment when the bill was before the Senate Energy and Natural Resources Committee to create a mandate of 21 billion gallons for coal-based transportation fuels by 2022. Their plan said that greenhouse gas emissions from the fuel's production and use could not exceed that of conventional gasoline. Their amendment failed by one vote in committee.
Current speculation is that Sen. Bunning may agree to increased testing and subsidies for a limited number of CTL projects, as opposed to fuel production mandate.
Biofuels Amendments Under Development
The Chairman of the Environment and Public Works (EPW) Committee, Barbara Boxer (D-CA), is working with Sen. Bingaman on a package of amendments to strengthen the biofuels title of the bill. The current Senate bill expands the biofuels mandate from 8.5 billion gallons in 2008 to 36 billion gallons per year by 2022. Starting in 2016, an increasing amount of the goal must be met with advanced biofuels such as cellulosic ethanol.
The amendment are likely to mirror the provisions of the biofuels bill Boxer introduced earlier, including environmental requirements on biofuels crops and requiring biofuels to meet higher emissions reduction goals.