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‘American Power Act’ Defangs EPA, Gives States Offshore Drilling Veto

| Wednesday May 12th, 2010 | 5 Comments

A draft of the American Power Act, the aggressive, official name for what had been called variously “the climate bill,” “the energy bill,” or “KGL” was leaked online Tuesday night, the day before its official unveiling by Senate co-sponsors John Kerry and Joe Lieberman.

The draft, which was first available on Joe Romm’s Climate Progress blog, contains few surprises but, after months of speculation, plenty of solid information. A summary is available here, the full document here.

On the touchy subject of offshore drilling, the bill has apparently been amended to include a provision allowing states to veto coastal drilling in nearby states. No idea how this sort of beggar-your-neighbor policy would play out…I predict a lot of blood in the water if this becomes law.

Among other controversial provisions are amendments to the Clean Air Act prohibiting the EPA from regulating greenhouse gas emissions, and a bar on states creating their own cap-and-trade programs (the only time the words “cap-and-trade” are mentioned in the bill).

Instead, the draft bill establishes a “carbon market” that would set an “annual tonnage limit on greenhouse gas emissions from specified activities.” Certain industries would be given carbon allowances, measured in one-ton amounts, which they could trade on the market. Unused allowances could also be rolled over from year to year, like rollover minutes.

Two thirds of funds collected from the issuance of credits not used to reduce the deficit would be returned to tax payers in the form of various refunds and energy credits. This “cap-and-rebate” system is similar to that in the CLEAR Act introduced by Senators Maria Cantwell and Susan Collins last year.

The price of the allowances would be “collared” between $12 and $25 a ton initially, and only sources emitting 25,000 tons of carbon pollution a year would fall under the emissions limit. Industrial sources would not be regulated until 2016 — so we’re basically talking fossil fuel power plants until then.

The bill also includes various incentives for nuclear power, renewable power, energy efficiency and clean technology — a hodge-podge of smart incentives and government pork barreling — it’s a bit hard to tell which is which, at this point. (I think carbon capture technology, which is promised billions under the bill, seems like the biggest fandango of them all, but who knows?).

Nearly there already…?

The bill’s stated goal is to reduce greenhouse gas emissions nationwide 17 percent below 2005 levels by 2020. As Romm noted and we reported last week, according to the latest data from the Energy Information Agency the country has already reduced emissions from energy-related sources 10 percent below 2005 levels.

However, it should be pointed out that a significant part of that reduction was due to the recession, and that the energy sector is not the only contributor of GHG emissions. The last year for which overall emissions data is available is 2008, which saw only a 2.7 percent drop from 2005, according to the recently released US Greenhouse Gas Inventory (PDF).

The main benefit of the American Power Act and its watered down cap-and-refund, or whatever you want to call it, is it gives businesses a much clearer regulatory landscape with which to plan future growth, and encourages the development of new forms of development in America that are not so utterly unsustainable.

Of course, that’s if it passes.


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  • lianhanedf

    This act is going to get our foot in the door toward stricter emissions programs, and as an initial offering it is very promising. While controversial issues like offshore drilling are not formally resolved, this is huge positive step. Now as long as it passes, we'll have a good chance of getting the ball rolling toward stricter emissions standards. Visit lesscarbonmorejobs.com for more information

  • guest

    Only problem I'd have with the legislation at first glance is it's banning the EPA from regulating carbon emissions. Otherwise I think this is good legislation.

  • RP Siegel

    Very weak bill. Disappointing. Gutting the EPA, big handouts for coal and nuclear. Sequestration will not work, it's just a ploy to keep building new plants that like companies that are “too big to fail” will be “too expensive to shut down.”
    And worst of all, the cap of 17% is not nearly enough.

  • guest

    Only problem I'd have with the legislation at first glance is it's banning the EPA from regulating carbon emissions. Otherwise I think this is good legislation.

  • RP Siegel

    Very weak bill. Disappointing. Gutting the EPA, big handouts for coal and nuclear. Sequestration will not work, it's just a ploy to keep building new plants that like companies that are “too big to fail” will be “too expensive to shut down.”
    And worst of all, the cap of 17% is not nearly enough.

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