Senate Approves National Renewable Energy Standard

By J.R. Pegg

WASHINGTON, DC, June 17, 2005 (ENS) - The U.S. Senate on Thursday narrowly approved a five-fold increase in renewable energy production and moved closer to finalizing its version of a comprehensive energy plan.

But the inclusion of a renewable portfolio standard in the Senate energy bill is at odds with the positions of both the U.S. House of Representatives and the Bush administration, and could prove another stumbling block for lawmakers eager to finally pass a national energy plan.

turbines

Wind turbines at Buffalo Ridge near Lake Benton, Minnesota (Photo by Jerry Miller courtesy Northern States Power)
The measure, which passed 52-48, mandates 10 percent of U.S. electricity be generated from renewable energy sources by 2020. It allows electric utilities to trade renewable energy credits in order to help the entire sector meet the goal.

Proponents say it would result in enough renewable energy by 2025 to power 56 million homes and note that currently only two percent of the nation’s electricity is produced by renewable sources such as wind, solar and geothermal.

"That is a paltry sum," said Senate Minority Leader Harry Reid, a Nevada Democrat.

Eight Republicans supported the measure, but not John McCain of Arizona, who is the co-author of a climate stewardship bill pending before the Senate. Only two Democrats voted in opposition.

Critics of the provision said it is unrealistic and expensive.

The standard could cost utilities – and consumers – some $18 billion, said Georgia Republican Saxby Chambliss.

"It imposes a one-size fits all mandate on the whole country without regard for whether the requirement is technologically or economically feasible," Chambliss said.

But the amendment’s coauthor, New Mexico Democrat Jeff Bingaman, said the $18 billion in estimated costs for the electric utility industry would be more than offset by lower spending on natural gas.

The measure will have a "negligible cost to consumers," Bingaman said.

Bingaman

New Mexico Senator Jeff Bingaman is ranking member on the Senate Energy and Natural Resources Committee. (Photo courtesy Office of the Senator)

Seventeen states, including Texas and Wisconsin, have enacted renewable energy standards that require electric companies to increase their use of renewable energy sources.

The amendment was coauthored by Republican Senator Norm Coleman of Minnesota, who said the amendment is good for his constituents.

"With Minnesota’s wind energy production the fastest growing in the nation, the extension of wind energy tax credits, the Rural Renaissance style bonding authority, and the Renewable Energy Standard are all important incentives, for greater energy independence, environmental protection, and economic development," Coleman said.

Chambliss

Senator Saxby Chambliss of Georgia, a Republican, says he supports developing domestic sources of energy - oil, coal, nuclear, hydroelectric, wind, and alternative energy sources. (Photo courtesy Office of the Senator)

Environmentalists praised the renewable portfolio standard, but noted that the Senate has passed such a provision in each of the last three sessions only for the overall energy bill to falter.

Immediately after the vote approving the measure, Chambliss called on Senate leaders to modify the proposal in the conference report to give states "greater flexibility and protect consumers from price increases."

The Senate on Thursday considered another provision not supported by the House or the White House – mandatory cuts in the nation’s oil consumption.

The amendment, offered by Washington Democrat Maria Cantwell, calls on the White House to cut oil imports 40 percent by 2025.

The U.S. currently imports some 58 percent of the 20 million gallons of oil it consumes each day.

Given current forecasts of increasing foreign oil dependence, the goal in the amendment represents a total reduction of some 7.5 million barrels per day.

The amendment failed by a vote of 47-53.

Three Republicans voted in favor of the amendment, with only one Democrat – Michigan’s Debbie Stabenow - in opposition.

Domenici

Senator Pete Domenici of New Mexico chairs the Senate Energy and Natural Resources Committee. (Photo courtesy Office of the Senator)
Senator Domenici called the measure a "gaudy, impossible resolution."

"[The president] would have to send us a plan that the whole world would laugh at," Domenici said. "Our cars would have to be the size of golf carts."

Many proponents of the amendment oppose efforts to increase the domestic supply of oil, Domenici said, in particular the bid to open the Arctic National Wildlife Refuge (ANWR).

"They don’t even want to get the oil from ANWR," Domenici said. "That is a million barrels [a day] of what they are asking for."

Critics noted that the energy bill already contains a provision that requires the White House to enact a plan to cut oil consumption by one million barrels a day by 2015.

Cantwell

Senator Maria Cantwell is a Washington Democrat. (Photo courtesy Office of Congressman Inslee)
But Cantwell said that provision "does nothing" to curb dependence on foreign oil and would result in the nation importing a greater percentage of its oil by 2018.

"It is the status quo and a bump and an increase," Cantwell said. "It is too timid."

The White House opposes Cantwell’s amendment as well as the existing provision to cut oil consumption – a measure that is also absent from the House bill.

Critics of mandatory cuts say such provisions will force automakers to rapidly increase fuel economy, a move that could harm the economy.

Illinois Democrat Dick Durbin rejected that criticism and said "it has been 20 years since we held Detroit responsible" for fuel economy.

"During that time fuel economy has gone down and down and down," Durbin said. "If you want to drive a Hummer, you ought to join the Army."

Senate Majority Leader Bill Frist, a Tennessee Republican, told colleagues he intends to make sure the Senate finishes work on the energy bill next week.

The legislation is expected to pass without much trouble, although debate is still expected on several amendments, including provisions to address global warming and offshore oil drilling.

Ironing out the differences with the House and White House could prove far more difficult.

On Thursday, the Senate Finance Committee approved $14.1 billion over 10 years in tax incentives for the energy bill.

The figure is more than double what the White House has requested and it is far richer in tax incentives and credits for renewable energy than the House legislation. The Senate bill also contains a mandate for ethanol in excess of that proposed by the House and requested by the administration.