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Union of Concerned Scientists: House Energy Bill Analysis

FOR IMMEDIATE RELEASE
DECEMBER 5, 2007
5:33 P
M

CONTACT: Union of Concerned Scientists
Emily Robinson, 202-331-5427

 
Union of Concerned Scientists: House Energy Bill Analysis
House Energy Bill Momentum Builds; Vote Expected Tomorrow
 

WASHINGTON - December 5 -The House will move another step closer to securing a new energy future when representatives vote tomorrow morning on a comprehensive energy package. The legislation includes several provisions that are integral to making the nation's energy system cleaner, cheaper and more secure. Below are some of the key elements of the package.

FUEL ECONOMY STANDARD

First and foremost in the final bill is a compromise congressional leadership hammered out late last week to boost vehicle fuel economy. The bill language would increase the Corporate Average Fuel Economy (CAFE) standard to a fleetwide average of at least 35 miles per gallon (mpg) by 2020. The current average is about 25 mpg.

According to analysis by the Union of Concerned Scientists (UCS), the measure would save roughly 1.1 million barrels of oil per day in 2020, about half of what the United States currently imports from the Persian Gulf. Consumers would save $22 billion dollars in 2020 -- even after paying the cost of the necessary fuel economy technology. Additionally, the provision would prevent more than 190 million metric tons of global warming pollution, the equivalent of taking 28 million of today's average cars and trucks off the road.

"If passed, this will mean more patriotic cars for every American worried about our national energy security and struggling to pay $3 for a gallon of gasoline," said David Friedman, research director of UCS's Clean Vehicles Program. "Automakers can meet the new standards with today's technology. Cars and trucks will be the same size and perform the same way they do today, and people will be able to afford to drive them, even if gas prices get worse."

Unlike the current CAFE rule, the new standard would be based on vehicle "attributes," such as size, allowing companies that make more large vehicles to meet lower requirements. The UCS analysis indicates that Detroit's Big Three automakers might only have to reach a 33-mpg average by 2020. By contrast, companies that sell fewer large vehicles, such as Honda and Volkswagen, might have to reach a 37-mpg and 39-mpg average, respectively. The bill also would not allow any interference with federal or state governments' ability to take further action to reduce vehicle global warming pollution.

Finally, the fuel economy language extends the so-called "flex-fuel" loophole, which allows automakers to take credit for vehicles that can run on alternative fuels, such as ethanol, but almost never do. The loophole would be phased out and ultimately eliminated in 2020.

RENEWABLE ELECTRICITY STANDARD

The energy bill includes a national renewable electricity standard requiring major utilities to generate at least 15 percent of their electricity from renewable energy sources, such as wind, solar and bioenergy, by 2020. States would have the option to meet more than a quarter of that obligation through energy efficiency measures.

A UCS analysis on the proposal showed that consumers would cumulatively save $13 billion to $18.1 billion on electricity and natural gas bills by 2020. By 2030, UCS projects that the savings would grow to $27.7 billion to $31.8 billion. Energy bills would be lower in all 50 states. Two other recent analyses -- including one released this week by the Department of Energy's Energy Information Administration -- also conclude that the national renewable electricity standard would save consumers money.

In addition to lowering energy bills, a national renewable electricity standard would bolster the nation's energy independence, reducing the need for natural gas imports by as much as 2 trillion cubic feet. The standard also would reduce global warming pollution by as much as 126 million metric tons per year by 2020, the equivalent of taking some 20 million of today's cars and trucks off the road.

"More than 20 economic analyses over the last decade found that a national renewables requirement is achievable and affordable," said Marchant Wentworth, Washington representative for UCS's Clean Energy Program. "Public opinion polls show overwhelming support for the renewable electricity standard because it will save consumers money, create jobs, and increase our energy security."

RENEWABLE FUEL STANDARD

The bill includes a renewable fuel standard (RFS) requiring an increase in biofuel production of 36 billion gallons by 2022, a sevenfold jump over current production. Twenty-one billion gallons of that fuel would have to be "advanced" biofuel, meaning that it could not be made from corn, and would have to cut global warming pollution at least 50 percent below that of gasoline, on a life cycle basis. Sixteen billion gallons of the advanced biofuels would have to be produced from cellulosic biomass and reduce global warming pollution at least 60 percent below that of gasoline. The bill stipulates that the remaining biofuels produced to satisfy the RFS emit at least 20 percent less global warming pollution than gasoline. The legislation also contains language to protect critical habitat and limit other potential environmental damage from the effects of biofuel production.

"This bill ensures that biofuels will help reduce global warming pollution," said Eli Hopson, Washington representative for UCS's Clean Vehicles Program. "The House bill provides tools to reduce the threat that unsustainable biofuels development poses to public health and the environment, and requires substantial cuts in biofuel global warming pollution, from seed to sedan."

NUCLEAR LOAN GUARANTEE

The House Rules Committee scrapped language that would have left taxpayers responsible for covering defaulted loans for new nuclear power plant construction. Because Wall Street is unwilling to accept the financial risk of building new nuclear plants, the nuclear industry lobbied Congress to shift the risk to taxpayers by making the U.S. Treasury liable for 100 percent of as much as $50 billion in loan guarantees for 2008 and 2009. If Congress had adopted this provision, taxpayers would have been responsible for as much as $25 billion, based on a Congressional Budget Office estimate that the risk of default is 50 percent.

This is not the last time we could see such a provision, however. Sen. Pete Domenici (R-N.M.), the main proponent of massive nuclear loan guarantees and the ranking member on the Energy and Water Appropriations Subcommittee, likely will try other avenues. Last month he attempted to attach the provision to the farm bill, hiding it in a renewable fuel standard amendment. Now that the farm bill has been shelved, he could try to eliminate a budget cap for the loan guarantee program in the fiscal 2008 appropriations bill.

For more on the House energy bill, go to:

www.ucsusa.org/clean_vehicles/fuel_economy/2007-energy-bill-resource-center.html.

The Union of Concerned Scientists is the leading science-based nonprofit organization working for a healthy environment and a safer world. Founded in 1969, UCS is headquartered in Cambridge, Massachusetts, and has offices in Berkeley, California, and Washington, D.C. For more information, go to www.ucsusa.org.

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