As the Senate moves quickly on climate and energy legislation, many opponents of the House-approved Waxman-Markey bill are hoping to see significant changes in the Senate's version. During today's OnPoint, Joe Lucas, senior vice president at the American Coalition for Clean Coal Electricity, discusses the provisions he hopes will change as the legislation makes its way through the Senate. Lucas explains how his industry will shape its lobbying efforts this summer. He also discusses the Obama administration's progress on funding and R&D for carbon capture and storage technology.
Monica Trauzzi: Welcome to the show. I'm Monica Trauzzi. Joining me today is Joe Lucas, senior vice president of the American Coalition for Clean Coal Electricity. Joe, it's great to have you on the show.
Joe Lucas: Great to be here.
Monica Trauzzi: Joe, after the House passed the Waxman-Markey bill your organization released a statement saying you did not support the bill because it did not adequately protect the economy or ensure reliable, affordable energy for Americans. The Senate is now taking up climate legislation. As this bill makes its way through the Senate, what kind of changes are you hoping to see to the language?
Joe Lucas: Well, there's several things that need to be changed in the bill. First off, what we would like to see where there were significant changes made in the House, such as allowance allocation versus auction. We know that that will drive down the costs for consumers. One of the things that we asked for was to put a compliance cap cost into the bill that would guarantee that consumers would not have to pay higher energy costs. We think at a time when our economy is in trouble putting that type of guarantee into the bill makes a lot of sense. We're also very concerned that the initial timelines that were in the House bill just actually went too far too fast. In order for electricity generators to meet something that's in the 2012 to the 2020 timeframe, you're talking about they needed to make investment decisions five years ago. And so in order to meet those sorts of near-term dates, those are just simple things that we're looking for. I think at the end of the day the House made significant changes to the bill that made it a better bill, still, it was not a bill that we thought would achieve four primary goals; protect access to affordable, reliable energy, promote greater energy independence, create jobs, and ensure that we bring technology to the marketplace to reduce emissions. Those are the four parameters under which we will judge any climate legislation that's out there.
Monica Trauzzi: Many people believe though that this bill provided a good middle ground between what the enviros wanted and what industry wanted. So are you suggesting that the bill needs to be weakened? You talked about targets and deadlines, does it need to be weakened in order for it to gain your support?
Joe Lucas: I was reading the Washington Post story Monday talking about the bill and what the Washington Post says is even as this bill is written, this bill is not going to have the dramatic shift in emissions reductions, that it would have negligible impact, if you would, on changing greenhouse gas concentrations on a global scale. So long term we need to have a strategy that talks about how we bring technology to the marketplace and allow technology to be the driver. Because, as we know here, if we make some type of decision here in this country to enact a policy that hurts our economy is search of emissions reductions other nations on the global scale are not going to follow our lead. So this is about a long-term strategy that brings technology to the marketplace and ensures that we're doing three things at once; meeting our energy, our environmental, and our economic goals.
Monica Trauzzi: So, how are you going to be shaping your lobbying efforts throughout the summer in order to influence the debate in the Senate?
Joe Lucas: Well, I think that the House vote gives you a lot of clues as to how this issue is being viewed on the Hill and how it will be viewed in the Senate. The fact that the vote was as close as it was in the House is a real significant barometer for where the public support is and the political support is for this bill. Last summer, when the Senate looked at the Lieberman-Warner bill, the fact that 16 Democratic senators, mainly from heartland states, coal dependent states, sent the letter to Chairman Boxer and to Majority Leader Reid saying they voted for cloture on that bill, but they would have voted against that bill. That is a real sort of indication that in order for a bill to pass the Senate it's going to have to meet those four goals that we talked about and, again, I would say that I think that coming out of the House debate there are three things that we learned. Number one, clear recognition that a climate policy is going to focus on the fact that coal is going to play a growing role not only in meeting U.S. energy needs, but around the world. Second, technology funding for advance carbon capture and storage is a necessary ingredient of a policy. And number three, that allowance allocation as opposed to an auction is the best way to drive down the consumer cost.
Monica Trauzzi: Does the bill incentivize utilities to move away from using coal and move towards using natural gas for example?
Joe Lucas: Monica, I think that's part of the problem with the way this issue is being shaped. There are many people who want to use this as a lever, if you would, to change U.S. energy policy. There are many groups who are dissatisfied with the bill because they think that the bill is too soft and that means that we'll continue to use coal. We should not use environmental regulation to set fuel policy. We should use environmental regulation to set an environmental standard, bring technologies to the marketplace, and let all fuels compete fairly.
Monica Trauzzi: But commercially scalable carbon capture and storage technology is not yet available. How risky is it then for utilities to stay behind coal when they don't know if that technology is going to be around in 10 or 20 years?
Joe Lucas: We know this, we know that the technology is rapidly developing and, as a matter of fact, one of the things that we're very disappointed in is the fact that we've not done more over the last 10 years to bring this technology to the marketplace. And we know that there is significant funding in the economic stimulus package. There was significant funding in the Waxman-Markey bill. We can bring this technology to the marketplace. I'll quote none other than Barack Obama who says, "We're the United States of America. We put a man on the moon in 10 years, we can do this." I've never seen anybody sort of be so negative about the ability for American ingenuity to solve a problem. There's never been an environmental challenge facing this industry for which technology did not provide the ultimate solution and those of us who are looking at the great progress we're making with carbon capture and storage recognize that will not be the exception to this rule.
Monica Trauzzi: What's your take on how the Obama administration is handling funding for R&D of carbon capture and storage? They're putting a billion dollars behind the FutureGen project, does more need to be done? Is this a good start?
Joe Lucas: We think it's a very good start and, again, that was one of our significant disagreements with the Bush administration, that there was not enough done to bring funding for advance carbon capture and storage technologies to the marketplace. We said that the money that was in the Economic Recovery Act was a good first step. We knew that there needed to be something like the Boucher bill, which is what eventually got codified into the Waxman-Markey bill. More needs to be done to bring these technologies to the marketplace. One thing that we know for sure, advancements in clean coal technologies pay a dividend to the taxpayer much quicker and more over time than any other investment in energy R&D the federal government makes.
Monica Trauzzi: Do you think this bill helps to provide some clarity over the debate on clean coal, whether it actually exists, whether we can achieve our climate goals by using so-called clean coal?
Joe Lucas: Well, I mean the term clean coal is something that has been somewhat of a political tug-of-war if you would. I mean clean coal technology does exist. If clean coal technology didn't exist how could we build a plant today that removes 98, 99 percent of the sulfur dioxide? I mean technology is evolutionary and we didn't say in the 1970s that we don't have medical technology because we didn't have laser surgery. The fact is, this whole debate has come to be about whether or not we will have technologies to capture and store carbon. And this is the United States of America, we see a challenge, we put ingenuity out there and we solve that challenge. And, you know, you can look at a number of projects that are underway, the We energies project that's becoming a commercial deployment of carbon capture and storage at Mountaineer this year. You can look at a whole host of other technologies that are out there to show we're making great progress not only on bringing these technologies to the marketplace, that's step number one. Step number two needs to be driving down the cost of using these technologies so that we keep the cost of energy affordable for the American consumer.
Monica Trauzzi: Final question here, how far do you see this all going in the Senate?
Joe Lucas: I think that at the end of the day it's just going to be a matter of timing and it's going to be a matter of priorities with the Senate, how this is going to line up with their desire to do health care legislation. The fact is this is a very complex bill. This is going to have far-reaching consequences into our economy, into our energy security, all those things, and so it is worth doing right. I mean we support Congress passing a bill. We support Congress passing a bill that does those four things that I laid out and we're going to work with leaders in the Senate. We're going to continue to work with folks in the House, in the administration, toward that goal of having a bill that meets our energy, environmental, and economic goals.
Monica Trauzzi: OK, we'll end it right there on that note. Thanks for coming on the show.
Joe Lucas: Thank you so much.
Monica Trauzzi: And thanks for watching. We'll see you back here tomorrow.
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