Budget Trimmers Target Ethanol

  • CEO of Growth Energy, Tom Buis argues ... we spend plenty of money for overseas oil ... why not support home-grown ethanol?(Photo courtesy of the NREL)

President Obama’s visit to the Corn Belt is highlighting a tough debate about the future of corn-based ethanol used in our cars.

Transcript

President Obama’s visit to the Corn Belt is highlighting a tough debate about the future of corn-based ethanol used in our cars.

Congress is looking to cut the federal budget and one target is a key ethanol subsidy.

It’s a tax credit of about 4 and a half billion dollars, and it runs out by the end of the year.

Ethanol trade groups are fighting to extend that credit.

Tom Buis is CEO of Growth Energy.

He argues … we spend plenty of money for overseas oil … why not support home-grown ethanol?

“We create jobs, jobs that can’t be outsourced. I don’t know why we want to fund economies of foreign governments. We should be looking at spurring our own economic development here in the United States.”

Last year the Government Accountability Office questioned whether we need this particular ethanol tax credit, since the government requires gasoline refiners to blend-in billions of gallons of ethanol anyway.

For The Environment Report, I’m Shawn Allee.

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Using NAFTA to Restrict Canadian Oil Imports?

  • In their submission, the environment groups charge that oil extraction processes leach contaminants into both surface and groundwater in the Athabasca watershed. (Photo courtesy of Aude CC-2.0)

You might think about imported oil and Saudi Arabia or Venezuela come to mind. But, the single biggest source of imported oil to the U.S. comes from Canada. And half of that comes from a dirty form of oil called tar sands oil. Lester Graham reports environmentalists are trying to use NAFTA to get restrictions on tar sands oil:

Transcript

You might think about imported oil and Saudi Arabia or Venezuela come to mind. But, the single biggest source of imported oil to the U.S. comes from Canada. And half of that comes from a dirty form of oil called tar sands oil. Lester Graham reports environmentalists are trying to use NAFTA to get restrictions on tar sands oil.

Environmental groups say extracting tar sands oil causes a lot of water pollution. Matt Price is with Environmental Defence Canada:

“We keep on presenting the evidence to the government, and they just sort of keep on ignoring it which is why we filed this citizens’ complaint.”

They’ve filed the complaint under the North American Free Trade Agreement. The say oil companies in Canada are not complying with Canadian environmental laws and that might be a violation of the NAFTA treaty. So, his group and others are taking the fight to Canada’s trading partners.

They’re hoping the U-S and Mexico will step in.

For The Environment Report, I’m Lester Graham.

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Co-Opting “Cap and Dividend”

  • Senator Maria Cantwell says something has to be done to push the country toward alternative sources of energy – and away dependence on polluting fossil fuels. (Photo courtesy of the NREL, Warren Gretz)

A new climate change bill will be introduced next week. It’s expected to be very complicated because of so many competing interests. Critics say it won’t pass. Julie Grant reports another much shorter and simpler bill in the Senate is getting some overdue attention:

Transcript

A new climate change bill will be introduced next week. It’s expected to be very complicated because of so many competing interests. Critics say it won’t pass. Julie Grant reports another much shorter and simpler bill in the Senate is getting some overdue attention.

Carbon emissions come from smokestacks, tailpipes and all kinds of manufacturing processes. It’s considered the biggest culprit in the greenhouse gas pollution contributing to climate change.

We’ve heard a lot about a possible cap and trade program to reduce carbon emissions. The House of Representatives passed a cap and trade bill last summer, but it hasn’t gone far in the Senate. Senators John Kerry, a Democrat, Joseph Lieberman, an independent, and Lindsey Graham, a Republican have been working on a bill for months.

But a simple bill called The CLEAR Act introduced last December has been is gaining interest. Senator Maria Cantwell is a Democrat from Washington State. She co-sponsored the bill with Republican Susan Collins of Maine.

Cantwell says something has to be done to push the country toward alternative sources of energy – and away dependence on polluting fossil fuels. That’s why they’re pushing the bill, called cap and dividend:

“We’re saying we think it’s very important to have a simple approach that the American people can understand. a 41-page bill is a lot about getting people to understand how this can work and helping us make a transition.”

Like cap and trade, the CLEAR Act would limit carbon emissions—it would put a cap on them. But it’s different from the complicated cap-and-trade plan that would target those who use energy and allow for many kinds of loopholes.

The Cantwell and Collins cap and dividend plan would concentrate on those who produce energy from fossil fuels. It would cap carbon at the tanker bringing in imported oil, the mine extracting coal, the oil and gas at the well head.

It would charge those energy producers for permits. Each year the number of permits would be reduced, so theoretically, the amount of carbon pollution would be gradually reduced.

Twenty-five percent of the money from the permits would go toward a clean energy fund. The other 75-percent would be paid at a flat rate to each person in the nation to offset higher energy prices.

So, fossil fuel energy would be more expensive, but families would get money to offset the higher costs.

Cantwell says no matter what we do, even if we do nothing, energy costs are going to rise. She says people want to know what to expect in their energy bills.

“What they want to know is how do you make that transition with the least impact to people and that’s what the Clear act is about; it’s about making a stable transition, and helping consumers along the way not get gouged by high energy prices.”

Many economists and environmentalists like the cap and dividend idea.

Senators Kerry, Lieberman and Graham have said they’ll fold some elements of cap and dividend into their massive proposal.

Darren Samuelsohn is the Energy and Environment Reporter for GreenWire. He says the three Senators are taking a comprehensive look at carbon pollution in relation to the entire U.S. energy policy.

“They’ve been meeting as a group of three behind closed doors working to try and satisfy the needs for a price on carbon emissions, across multiple sectors of the economy–power plants, heavy manufacturing and transportation.”

And they’re using bits and pieces of the Cantwell-Collins proposal.

Senators Cantwell and Collins say they don’t want their bill

cannibalized by that large scale bill.

One reason Cantwell is concerned is that the Kerry, Lieberman Graham bill allows trading permits. She says trading hasn’t worked in the European system. And she’s concerned it will make the price of carbon vulnerable to speculators who could drive the prices up artificially.

Instead, she wants carbon prices decided at monthly federal auctions.

Cantwell says the time is right for a simple, predictable bill like the CLEAR Act.

“You don’t have to ahve a 2-thousand page bill and figure out how many allowances you have to give away in the back room to make somebody believe in this. This is a concept the American people can understand and one they can support.”

On Monday, the Kerry-Lieberman-Graham bill is expected to be introduced. The vote will be very close, so they can’t afford to ignore what Senators Cantwell and Collins want.

For The Environment Report, I’m Julie Grant.

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European Cap-And-Trade Example

  • Europe was the first to do carbon cap-and-trade, four years ago. (Photo courtesy of NASA)

Congress is haggling over a climate
bill that includes a carbon cap-and-
trade system. In many ways, it’s
similar to the one the European Union
put in place several years ago. Liam
Moriarty looks at what
the European experience has been and
what the lessons for the US might be:

Transcript

Congress is haggling over a climate
bill that includes a carbon cap-and-
trade system. In many ways, it’s
similar to the one the European Union
put in place several years ago. Liam
Moriarty looks at what
the European experience has been and
what the lessons for the US might be:

Slashing greenhouse gas emissions is hard. Our economy is powered mostly by fossil fuels. Switching to clean fuels will be disruptive and expensive, at least to start with.

So how do we get from here to there? The approach that’s proving most popular is what’s called “cap-and-trade.” It works like this – first, there’s the cap.

“We’re going to put an absolute limit on the quantity of carbon-based fuels that we’re going to burn. And we’re going to develop a system to make sure we’re not burning more fossil fuels than that.”

Alan Durning heads the Sightline Institute, a sustainability-oriented think tank in Seattle. He explains that once you put the cap in place…

“Then, we’re going to let the market decide who exactly should burn the fossil fuels based on who has better opportunities to reduce their emissions.”

That’s the “trade” part. Companies get permits to put out a certain amount of greenhouse gases. Outfits that can cut their emissions more than they need to can sell their unused pollution permits to companies that can’t.

The cap gets ratcheted down over time. There are fewer permits out there to buy. Eventually even the most polluting companies have to reduce their emissions, as well.

The goal is to wean ourselves off dirty fuels by making them more expensive. And that makes cleaner fuels more attractive.

Europe was the first to do carbon cap and trade, four years ago. And things got off to a rough start. They set the cap on emissions too high and way overestimated the number of permits – or allowances – that companies would need.

“We have too many allowances. Simple supply means that the prices of those allowances crashes. They don’t have much value, and therefore the price went down to close to zero.”

That’s Vicki Pollard. She follows climate change negotiations for the European Commission. She says the whole system got knocked out of kilter.

For the first two years, European carbon emissions actually went up. After the collapse of Phase One, big changes were made. The next phase of the trading system has a tighter cap, more stringent reporting requirements and enforcement with teeth.


Today, Europe’s on track to meet its current emissions target. But environmentalists, such as Sanjeev Kumar with the World Wildlife Fund in Brussels, say those targets are still driven more by politics than by science.

“We have a cap that’s very weak, i.e. that means that it doesn’t mean that we’re going to achieve the levels of decarbonization that we need within the time scale.”

Leading climate scientists say we have to cut greenhouse gas emissions to 80% below 1990 levels by the middle of this century to avoid catastrophic climate change.

Business still has concerns about the EU cap and trade scheme. Folker Franz is with BusinessEurope, sort of the European version of the US Chamber of Commerce. He says companies worry about the additional cost of carbon emissions putting them at a competitive disadvantage.

“If you produce one ton of steel, you emit roughly one ton of CO2. So any ton of steel produced in the EU is right now some 17 dollars more than outside the European Union. And that makes a difference.”

But, Franz says, European businesses accept the need to take prompt action on climate change and are on board with the stricter cap and trade rules coming over the next few years.

Americans have watched Europe struggle with carbon cap-and-trade. The Sightline Institute’s Alan Durning says we can benefit from Europe’s willingness to break new ground.

“It was a big advance when they started it, because nothing like it had ever been done. But, it’s not the be-all-and-end-all. In fact, the United States now has an opportunity to learn from their mistakes and leapfrog ahead to a much better climate policy.”

Durning says an American cap and trade system could avoid the costly stumbles that’ve hampered Europe’s carbon reduction efforts.

For The Environment Report, I’m Liam Moriarty.

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Clearing Up Cap-And-Trade

  • In cap-and-trade, businesses can purchase the right to pollute from other companies that reduce their emissions more than they need to. (Photo courtesy of the US EPA)

Congress is considering restricting
carbon emissions causing climate
change with a cap-and-trade scheme.
But, recent polls show only a handful
of people have heard of cap-and-trade.
Even fewer understand what it is.
Lester Graham reports cap-and-trade
is not new:

Transcript

Congress is considering restricting
carbon emissions causing climate
change with a cap-and-trade scheme.
But, recent polls show only a handful
of people have heard of cap-and-trade.
Even fewer understand what it is.
Lester Graham reports cap-and-trade
is not new:

We’ve been using the market-based tool to reduce other pollution.

Frank O’Donnell is with the environmental group Clean Air Watch. He says ‘remember acid rain?’ The government ‘capped’ the pollutants causing acid rain. And then came the ‘trade’ part.

“Sources can either reduce their emissions further or purchase the right to pollute from other companies that reduce their emissions more than they need to.”

O’Donnell says that cap-and-trade was cheaper than anybody predicted, and it reduced acid rain. But it didn’t eliminate it.

“And the reason is that the cap-and-trade target was essentially a politically-driven target. It was not one based fully on science.”

In fact, the US EPA is now proposing cutting acid rain pollutants more.

O’Donnell thinks a cap-and-trade scheme for carbon emmissions could be far more susceptible to political maneuvering.

For The Environment Report, I’m Lester Graham.

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A Fight Over the Climate Change Bill

  • Groups are arguing over whether the climate change bill in the Senate will create jobs or kill them. (Photo courtesy of the National Renewable Energy Laboratory)

America has a big decision coming up. We have
to decide whether we want to keep spending our
money on energy from fossil fuel sources such as
coal and oil. Or, do we want to invest more in
renewable energy such as solar, wind, and bio-fuels?
Lester Graham reports the next stage for the
national debate will be when the Senate considers
a climate change bill late this month:

Transcript

America has a big decision coming up. We have
to decide whether we want to keep spending our
money on energy from fossil fuel sources such as
coal and oil. Or, do we want to invest more in
renewable energy such as solar, wind, and bio-fuels?
Lester Graham reports the next stage for the
national debate will be when the Senate considers
a climate change bill late this month:

The U.S. House has already passed a version of the bill. It includes a carrot and stick plan to cap greenhouse gas emissions and put a price on them. It will mean fossil fuels will become a little more expensive to use. Revenue from the program will be invested in clean energy and energy efficiency projects.

President Obama’s Secretary of Commerce, Gary Locke, says using that money America can reinvent itself and, in the process, create jobs.

“The technological innovations needed to combat climate change, to reverse it, to mitigate it, can spawn one of the most promising areas of economic growth in the 21st century.”

Environmental groups believe that. And labor unions believe it. And some progressive businesses are counting on it. They’ve been joining forces in groups such as the Apollo Alliance, and then there’s the United Steel Workers Union and the Sierra Club’s Blue/Green Alliance.

Leo Gerard is the President of the United Steelworkers.

“We need a climate change bill that is focused on creating jobs and cleaning up the climate. With a lot of conservation, a lot of investments in the newest technologies, what we’ll end up doing is taking a huge amount of carbon out of the atmosphere and creating a lot of good jobs.”

Business groups say all carbon cap-and-trade will do is make coal, gas and oil more expensive.

“This legislation is a job killer.”

Keith McCoy is a Vice-President with the National Association of Manufacturers. He says the government should not penalize businesses that rely on cheaper fossil fuels.

“So, if you’re a company that’s reliant on natural gas or oil or even coal in the manufacturing process, these companies suffer the most.”

Business says drop cap-and-trade. And just use the carrot. The government should just offer incentives for energy efficiency and invest in technologies such as nuclear power and carbon capture and sequestration for coal-burning industries.

So the two sides are rallying the troops.

The unions and environmental groups are urging their members to push for cap-and-trade for the sake of the planet and for the promise of green jobs.

Business groups are launching TV ad campaigns against it. Oil companies are using a front group called Energy Citizens to hold public rallies oppsing cap-and-trade. They raise the spector of high gasoline prices and higher electricity bills and throw in the threat of losing as many as 2.4 million jobs.

Ed Montgomery is President Obama’s Director of Recovery for Auto Communities and Workers. He says a clean energy policy is not going to hurt the US, it’ll save it.

“Something’s gone wrong. Our manufacturing sector isn’t able, and hasn’t been able to compete and continue to create new and effective jobs. And what a clean energy policy opens up for us is a whole avenue forward. It’s a way to create both new jobs, to open up new avenues of competitiveness, the competitiveness that uses the strengths of our workers – who know how to make product.”

But first, the debate will devolve into shouting matches about whether global warming is real and, if it is, whether cap-and-trade will do anything to slow it. There will be distortions on both sides about the end of the economic good of the country, and the climatic end of the world as we know it.

And because of all the complexities, the arguments will leave a thoroughly confused public about whether we should use government policy to shift from reliance on carbon-emitting fossil fuels to banking more on renewable energy.

For The Environment Report, I’m Lester Graham.

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Job Killer or Job Creator?

  • Environmental groups and labor unions say the climate change bill will create green jobs. Some businesses disagree. (Photo courtesy of the National Renewable Energy Laboratory)

The Senate sponsors of a climate change
bill say they need more time. Lester Graham
reports Senators Barbara Boxer and John
Kerry asked the Senate leadership to give
them until the end of the month before they
introduce the climate change bill:

Transcript

The Senate sponsors of a climate change
bill say they need more time. Lester Graham
reports Senators Barbara Boxer and John
Kerry asked the Senate leadership to give
them until the end of the month before they
introduce the climate change bill:

The details of the senate bill are still being worked out. The House version included a carbon cap-and-trade scheme to reduce greenhouse gases and raise revenue for clean energy projects.

Environmental groups and labor unions are in favor of cap-and-trade. Jeff Rickert heads up the AFL-CIO’s Center for Green Jobs.

“The climate change bill is a potential stream of revenue to really make the green jobs, the clen-tech industry a reality.”

Business groups say all carbon cap-and-trade will do is make energy more expensive.

“This legislation is a job killer.”

Keith McCoy is a Vice-President with the National Association of Manufacturers.

“So, if you’re a company that’s reliant on natural gas or oil or even coal in the manufacturing process, these companies suffer the most.”

Business suggests the government should just offer incentives for energy efficiency and invest in clean technologies.

The two sides are taking their arguments to the public this month.

For The Environment Report, I’m Lester Graham.

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No Cars Left for Cash for Clunkers

  • Dealers across the country are running out of new cars to sell that qualify for the program. (Photo source: IFCAR at Wikimedia Commons)

Two billion dollars is being added to
the very popular Cash for Clunkers
program. The original one billion dollars
is almost gone. But, Lester Graham
reports, there’s a shortage of new cars
that qualify for the program:

Transcript

Two billion dollars is being added to
the very popular Cash for Clunkers
program. The original one billion dollars
is almost gone. But, Lester Graham
reports, there’s a shortage of new cars
that qualify for the program:

The National Automobile Dealers Association says they’ve been hearing from dealers across the country who’ve been running out of new cars that qualify for the program.

Steve Demers is the General Manager of Cueter Chrysler Jeep Dodge in Ypsilanti, Michigan, a state where Cash for clunkers has been especially popular.

“There’s virtually no vehicles available, so there are other areas in the country that may not be as – the program has not been as popular – so we’re able to pluck some of that inventory out of their states, but it’s a nation-wide problem. I mean, we’re out many, many states away, thousands of miles before we can find a vehicle that can be brought in for one of our custormers.”

Factories are shipping more cars to the dealers but can’t keep up with demand.

185,000 gas-guzzling clunkers have been turned in to be scrapped in exchange for the government incentives.

Car buyers get up to 4,500 dollars toward buying a new fuel-efficient model.

For The Environment Report, I’m Lester Graham.

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A Clunker’s Fate Once It’s Cashed In

  • Cars stacked up and waiting to be shredded at United Iron and Metal in Baltimore, MD. (Photo by Tamara Keith)

The federal Cash for Clunkers
program kicked off this weekend,
and dealerships were pushing it
hard to sell new cars. The program
was created by Congress last month
to give a boost to the struggling
auto industry while helping the
environment. The idea is to get
older polluting cars off the road
for good and replace them with
new more-efficient ones. Tamara Keith has this report
on what will happen to all the
clunkers:

Transcript

The federal Cash for Clunkers program kicked off this weekend, and dealerships
were pushing it hard to sell new cars. The program was created by Congress last
month to give a boost to the struggling auto industry while helping the environment.
The idea is to get older polluting cars off the road for good and replace them with
new more-efficient ones. Tamara Keith has this report on what will happen to all the
clunkers:

Car dealers suddenly have a whole bunch of cars on their lots they have absolutely
no use for. The clunkers cannot be re-sold. That would defeat the whole green goal
of the program.

So all those old trucks and sagging sedans, they’re headed to places like M and M
Auto Parts in Stafford, Virginia. Most of us would call it a junk yard. But don’t tell
that to owner Rick Morrow.

“Long before green was popular, this kind of operation, even though a lot of people
said, ‘Oh junk yard.’ But they were actually recycling cars. They were making use of
what the component was built for in the first place.”

His company’s logo prominently features a large green recycling symbol.

“This is the dismantling area where after the cars come are inventoried and then take
them apart.”

Morrow’s business is all about re-use. A fender, or a tail light, or maybe an alternator
from this car will live to see another day in a car that needs a replacement part.

You’d think Morrow would be totally excited about Cash for Clunkers. But he’s not.
Because the one component from the clunkers that absolutely cannot be re-sold is
the engine – pretty much the most valuable thing in the car.

“If we do a few dozen cars and it looks like it’s costing us more money than it’s worth,
we’ll say, ‘sorry.’”

From an environmental perspective, it absolutely makes sense to prevent those
engines from ever polluting again. But, from a business perspective it’s a real
problem for the nation’s auto recyclers.

“It will make it extremely hard to make money on a car.”

Scotty Davis is the vice president of All Foreign Auto Parts in Fredericksburg
Virginia. He says it costs him $1800 in labor to take apart a car.

“It’s going to cost me money to do this. It’s one of these things. I have to bring the
car in. I have to get rid of the tires. I have to get rid of all the fluids, the freon,
process it – just to crush the vehicle.”

Davis specializes in newer foreign vehicles. Parts from a clunker won’t help stock
his shelves. But he feels like he has to take the cars to stay in the good graces of
the auto dealers he sells parts to.

“And I’ll be very honest with you. A couple of them I do a lot of business with, I said,
‘I will take your cars.’ And they said, ‘what are you going to do with them?’ I’m going
to crush ‘em. I mean they’re not of any value.”

(sound of a shredder yard)

Once all the usable parts are removed, and the toxic chemicals cleaned out, most
cars will end up at a scrap yard like United Iron and Metal in Baltimore.

“Right now you can see the tail end of a car coming on the conveyor belt down into
the shredder.”

“A tremendous amount of friction is going on as these hammers are pulverizing that
car into small pieces.”

Bruce Savage is with the Institute of Scrap Recycling Industries – a trade group. It
only takes 15 seconds, and when the shredder is done with a car, it isn’t even
recognizable.

“That big pile over there is the end result. It’s just a big pile of metal pieces.”

Savage says the metal is then sold. Whether scrap recyclers will cash in on Cash
for Clunkers all depends on the commodities prices for metal in the coming months.

“What was an old car can become a new car or can become a dishwasher or siding
for a home. It depends on the materials. But everything is being reused,
reprocessed and renewed.”

So maybe a 1989 suburban can be reborn as a 2010 Ford Focus Hybrid.

For The Environment Report, I’m Tamara Keith.

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Dealerships Prepare for Clunkers

  • ‘Cash for clunkers’ became popular before all the rules were final. For the past few weeks there’s been a growing backlog of orders at dealerships. (Photo by Samara Freemark)

Today is the first official day of the cash for clunkers program. The government program offers you up to $4500 to trade in your gas guzzling car for a more fuel efficient new car. Lester Graham reports:

Transcript

Today is the first official day of the cash for clunkers program. The government program offers you up to $4500 to trade in your gas guzzling car for a more fuel efficient new car. Lester Graham reports:

The goal is to clean up the environment and give sagging new car sales a boost.

‘Cash for clunkers’ became popular before all the rules were final. For the past few weeks there’s been a growing backlog of orders at dealerships.

At Varsity Ford in Ann Arbor, Michigan, people have been seeing if their clunkers qualify, and picking out a new car that they’ll finally be able to drive off the lot today.

Matt Stanford sells cars there. He says as far as he’s concerned, ‘cash for clunkers’ is already a success.

“We’re going to sell new cars. We’re going to get cars that don’t really need to be on the road off the road.”

The National Autobmobile Dealers Association says some dealerships have been holding off until they learned more about the rules of ‘cash for clunkers’ which were just cleared up last Friday.

The clunkers will be scrapped. The cash ends when the one-billion dollars in government money runs out.

For The Environment Report, I’m Lester Graham.

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