Climate:

Sen. Bingaman to introduce new emissions bill in June, talks biofuels, RPS, CTL

With the Senate likely taking up the energy debate after the Memorial Day recess, questions still remain about how the full Senate will act on key issues like implementing a new federal RPS and agreeing to a new federal mandate for the use of coal-based transportation fuels. During today's OnPoint, Sen. Jeff Bingaman (D-N.M.), chairman of the Senate Energy and Natural Resources Committee, discusses what his committee has done in these areas plus he talks about the competing biofuels proposals that have emerged in the Senate. Bingaman also previews his new climate legislation saying the new bill will be introduced in June and will still include the controversial "safety valve" provision.

Transcript

Monica Trauzzi: Welcome to OnPoint. I'm Monica Trauzzi. Joining me today is Senator Jeff Bingaman, chairman of the Senate Energy and Natural Resources Committee. Senator, thanks for coming back on the show.

Sen. Jeff Bingaman: Nice to be with you.

Monica Trauzzi: You recently introduced biofuels legislation and it cleared the committee despite the opposition of many environmental groups. The main issue that the enviros had with the legislation was that it didn't include enough climate protections. Why didn't you take a closer look at the environmental implications?

Sen. Jeff Bingaman: Well, we did include an amendment, which I offered at committee, that would require that any biofuels that were eligible to count toward the renewable fuels standard that we set in the bill, they would have to demonstrate that they had at least 20 percent less emissions than regular gasoline would in the lifecycle production and use. I think that was a step forward. It's possible we can do other things to the bill by way of amendment on the Senate floor to further strengthen the safeguards in that regard. But we were trying to get a bipartisan bill. We got 20 senators to vote for it. Three voted against it. I felt very good about the bipartisan nature of the bill. And, frankly, I think we did all we were able to get done in committee.

Monica Trauzzi: And Senator Boxer has now introduced her own biofuels legislation, which is in essence competing with yours. What's your take on her legislation and how much of a compromise do you think will need to happen to get it to the floor?

Sen. Jeff Bingaman: Well, I don't know what her plan is with regard to her bill, if she would plan to try to mark it up in committee or take parts of it and offer them as amendments to the bill that we've reported or what action she would take. As I say, I think there are ways that the bill we reported can be strengthened from the point of view of environmental safeguards. And we've talked to various environmental groups about possible ways that they would like to see that happen. And we'll just see what the specific proposals turn out to be and how much support they can generate.

Monica Trauzzi: There's a lot of talk about setting a federal renewable portfolio standard and you've proposed an RPS at 15 percent by 2020. Why did you stop at 15 and not do something slightly more aggressive like 20 percent?

Sen. Jeff Bingaman: Well, in the past, in the Senate, we've had the votes to pass a 10 percent renewable portfolio standard. I think we passed it three times through the Senate in the last several Congresses. And the House was never willing to agree. The administration, of course, is opposed to any kind of a requirement in this regard. We decided that the technology had advanced to a point where we could require 15 percent. This is a minimum and clearly there are many states that have decided to require more and their ability to do that continues. We would not interfere with that, with this legislation, but this would set a national minimum and we think that 15 is about the right number. I hope we're able to achieve that.

Monica Trauzzi: Does it have enough votes to pass?

Sen. Jeff Bingaman: I don't know. I think, again, we'll have to see when we get to the Senate floor whether there's sufficient support for 15 percent. If not we would, I think it's important to have a national requirement to pursue renewable energy sources for utilities. But I would hope we could get the votes to enact 15 percent.

Monica Trauzzi: If emissions legislation is passed is there still a need for a federal RPS?

Sen. Jeff Bingaman: I believe there is. I believe, the way I'm thinking about it, when you say emissions legislation you're talking about a federal cap and trade system or something of that sort. It's my view that if we were able to adopt an economy why national cap and trade system to control greenhouse gas emissions there would still be a need to have other specific regulatory requirements in place. Regulatory requirements with regard to vehicle fuel deficiency, CAFE standards, or something to replace CAFE standards, something with regard to a renewable portfolio standard for utilities. There are a variety of ways in which I think we can regulate and try to help achieve the overall emission caps that would be in addition to the emission caps themselves.

Monica Trauzzi: And let's focus more specifically on climate legislation. When can we expect your new bill to be introduced and what changes might be included in that?

Sen. Jeff Bingaman: Well, we have, as you know, had it circulating for some time now. And we've gotten a lot of feedback and very constructive feedback. I think that we are now trying to determine which of those suggestions we can incorporate into the bill. And, frankly, some of them are fairly significant, so we're still sort of in the debate about that. I believe this next two weeks from now, during our Memorial Day recess, I'm going to be meeting with some people involved with the cap-and-trade system that was put in place in Europe and the changes that they're making in it. I'm planning to travel to Brussels for meetings on that subject, also London and Paris. And I think we'll want to get the feedback from them before we settle on the particular parameters of the bill that we have. So it's most likely although I had thought we'd introduce it in May, prior to the Memorial Day recess, I think it's more likely now that it will be June.

Monica Trauzzi: OK and one of the main points, and also it's a controversial point of your current legislation, is the safety valve. The idea of implementing a safety valve for carbon credits so prices don't go over a certain point. Why do you think it's so important to have the safety valve and is it going to be included in this new piece of legislation?

Sen. Jeff Bingaman: Well, yeah, in the draft that we have circulated there is a safety valve and we're still debating what the right level for the safety valve is. But I think it's an important element to include because what it does is it gives some assurance to the companies that are going to be regulated by this that they will know that the price of carton is going to be there and it's going to continue to increase over the coming years, but that there is going to be a maximum. I think one of the problems they've encountered in Europe is that the price of the permits to emit in Europe has fluctuated from €30 to €3 at various places. And it's very hard for company to plan intelligently if they don't have more assurance as to what that price is likely to be five years from now, 10 years from now.

Monica Trauzzi: Environmental Defense says, "A price cap form of safety valve could undercut the development of the very technologies that some high emitting industries will need in the future to meet their emissions targets." How do you respond to that?

Sen. Jeff Bingaman: Well, I think if the safety valve is at the right level I don't think that's true. I think that the safety valve can be an assurance to those companies that the price of carbon is going to be going up and it's going to be at least that high in the future. And I think that it creates an incentive for them to get on with developing the technologies to reduce the carbon.

Monica Trauzzi: Senator Domenici is really set on getting China and India to make a commitment to reduce their emissions. Can the U.S. successfully proceed with its own efforts if they don't have China and India signing on as well?

Sen. Jeff Bingaman: Well, I think it's essential at this stage that the United States demonstrates its bona fides by adopting some kind of credible system to begin reducing greenhouse gas emissions. I think if we can adopt a system that people can understand, that works, then I think we can, with more success, we can engage these developing countries, China and India and others, in doing something responsible themselves. I think if we hold off until we have everybody else in the world signed up we're likely to be holding off for a long time. Whereas, if we go ahead and adopt something that makes sense, then I think we'll have a better chance of bringing other countries along. The bill that I've proposed contemplates every five years that Congress would go back and look at what other countries are doing and also look at the state of the technology and adjust the targets and adjust the safety valve and adjust the system in ways that are consistent with what others are doing.

Monica Trauzzi: You mentioned some other ways that we could reduce emissions, energy efficiency, alternative fuels, CAFE, and the idea of working on these things is becoming more prevalent. Is that because the Democrats know that passing an overall emissions legislation will be near impossible?

Sen. Jeff Bingaman: Well, I think everyone recognizes that since the president and the administration have opposed any mandatory caps on greenhouse gas emissions, any mandatory limits, it's very hard to see how we actually enact a bill that we then could get the President to sign. Now I'm probably the last person in Washington to hold out some hope that they would change their view. And if we could get a bill to the President that had substantial support from industry and labor I think that the President would be hard-pressed not to sign it. But I think that there is a lot of focus on what are the specific forward steps we can take, short of a cap and trade system, and that's, of course, the legislation that we reported out of our committee. That's also the Commerce Committee legislation. Also Environment and Public Works has a bill that they've reported out with regard to GSA buildings.

Monica Trauzzi: On to coal to liquids. You have previously said you weren't sure that CTL would play a significant role in a climate change solution. Why is that?

Sen. Jeff Bingaman: Well, I think the big problem with coal to liquids is what you do with the carbon? And we are doing a variety of things in this legislation we've passed out of the energy committee to try to demonstrate, at a commercial level, that carbon capture and storage or storage and sequestration is, in fact, practical and can be done on a large scale. That hasn't been demonstrated yet. I think that it's very difficult for people to show that they can get ethanol or some type of fuel from coal without substantial emissions of carbon. I mean I'm open to any kind of a proposal that would allow that to happen, but I just haven't seen it yet.

Monica Trauzzi: What are you expecting when the CTL issue is brought up before the full Senate?

Sen. Jeff Bingaman: Well, I'm not sure what will happen. We, of course, had an amendment offered in committee which tried to set a separate renewable fuels standard or a requirement for fuel from this coal to liquids process. I did not support that. A majority of the committee did not support that. But I don't know if we'll see that same proposal revisited on the Senate floor or something else. I do support trying to do all the research that makes sense with regard to seeing what can be done using coal. But I have not, as I say, I have not seen yet a proposal that would actually persuade me that we should lock in a requirement for using fuel from that coal to liquids process.

Monica Trauzzi: All right. We're going to end it right there. Thanks for coming back on the show.

Sen. Jeff Bingaman: Thank you very much.

Monica Trauzzi: This is OnPoint. I'm Monica Trauzzi. Thanks for watching.

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