Energy

Tuesday, March 30, 2010 1:47 PM

Lugar Rolls Out Cap-And-Trade Alternative

By Darren Goode, NationalJournal.com

Senate Foreign Relations ranking member Richard Lugar, R-Ind., is trying to sell both parties on a strategy he detailed today that avoids addressing climate change through a cap-and-trade program or other system for putting a price on industrial greenhouse gas emissions.

"Several colleagues have diligently worked on proposals centered on cap-and-trade,," Lugar wrote Friday to 32 Senate colleagues. "No matter your position on such proposals, I believe that we can have broad bipartisan agreement on the streamlined plan I share with you today." Lugar sent his letter to Senate leaders of both parties and centrist fence-sitters, as well as to President Obama and Energy Secretary Steven Chu.

Lugar says his plan -- which is dominated by items he and others have introduced in previous bills -- would reduce dependence on foreign oil by two-thirds, or 1.75 billion barrels, by 2030 and would cut greenhouse gas emissions by 25 percent over business as usual by the same date. Lugar says this can be done without hurting economic growth or losing jobs while saving households an average of 10 percent on their electricity bills.

While an outline has been sent to legislative counsel to be made into a stand-alone bill, a Lugar aide said that the more practical goal is to build momentum around amendments to be offered to an energy bill approved last year by the Senate Energy and Natural Resources Committee. Lugar shares the view of Energy and Natural Resources Chairman Jeff Bingaman, D-N.M., Sen. Byron Dorgan, D-N.D., and others that the energy bill should be moved separately and before one that puts a price on U.S. carbon emissions.

According to a draft outline, Lugar's proposal would extend and increase by 4 percent annually Corporate Average Fuel Economy standards for cars and light trucks from 2016 to 2030. Those standards would be extended to include medium- and heavy-duty vehicles with the same goal of increasing the efficiency by 4 percent annually.

It also calls for broadening and giving financial help toward meeting the current federal mandate of producing 21 billion gallons of advanced renewable fuels; while echoing legislation Lugar, Senate Agriculture Chairman Tom Harkin, D-Iowa, and Sens. Sam Brownback, R-Kansas, and Maria Cantwell, D-Wash., have backed which ramp up the number of flex-fuel vehicles.

There is a mandate for electric utilities to produce electricity from cleaner sources, including solar, wind, new nuclear energy, coal-mined methane, certain hydropower, marine and coal from facilities using carbon capture and storage technology that reduces emissions by 80 percent. The requirement is 11 percent by 2015, 30 percent by 2030 and 50 percent by 2050.

Other details include investing $11 billion toward retiring the dirtiest coal-powered plants, expanding loan guarantees for nuclear power and cutting energy use in commercial buildings in half over six years.

Lugar's counterpart on the Foreign Relations Committee -- Chairman John Kerry, D-Mass. -- is continuing to draft a climate and energy plan with Sens. Lindsey Graham, R-S.C., and Joe Lieberman, I/D-Conn., that may touch on many of the areas in Lugar's proposal.

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