Energy, Commerce Leaders Release Draft Cap-and-Trade Bill

Two powerful Democrats on the U.S. House of Representatives Energy and Commerce Committee on Tuesday unveiled a long-awaited draft global warming bill that will serve as a key guidepost for next year's Capitol Hill debate on climate policy.

In their 461-page bill, House Energy and Commerce Committee Chairman John Dingell (D-Mich.) and Energy and Air Quality Subcommittee Chairman Rick Boucher (D-Va.) propose a cap-and-trade system that would cover about 88 percent of U.S. heat-trapping greenhouse gas emissions.

It includes restrictions on electric utilities, petroleum producers and importers, large industrial plants, producers and importers of bulk gases, natural gas and local distribution companies, and geological sequestration sites.

Under the proposal, U.S. emissions would decline to 6 percent below 2005 levels by 2020, 44 percent below 2005 levels by 2030 and 80 percent below 2005 levels by 2050. The draft outlines a number of options for distributing emission credits and containing costs to the U.S. economy.

Hearings and a legislative markup of Dingell's proposal will not happen until 2009, when Democrats are expected to hold larger margins in both the House and Senate. House Speaker Nancy Pelosi (D-Calif.) said she will make cap and trade a top priority next year. Both presidential candidates support cap-and-trade legislation.

Click here to review the discussion draft at the House Energy and Commerce Committee Web site.

Contact David Hubbard.

Hazardous Emission Fall Sharply Across Industry Sectors

In a report released on Tuesday, the  U.S. Environmental Protection Agency (EPA) said hazardous emissions from nine major industrial sectors have fallen sharply in recent years, despite rising production and value in most of those industries.

Hazardous air pollutants reported to EPA's Toxic Release Inventory by nine industries fell by 64 percent  between 1996 and 2005, the 2008 Sector Performance Report says. Total normalized emissions for those sectors declined by 61percent during that period.

The report covers manufacturers of cement; chemicals; food and beverages; forest products; iron and steel; metal castings; paint and coatings; refined petroleum; and ships. Those industries represent about 35 percent of total emissions reported to the toxics inventory through the covered period.

Only cement manufacturing reported a rise in total emissions through the period -- from 9 million tons in 1996 to 10.6 million tons in 2005, an 18 percent increase.

The industry's production grew by 24 percent during that time.

"You'd expect, given the increase in production, that there would be a commensurate increase in absolute emissions," said Tom Tyler, EPA's national sector leader for iron and steel. Since the cement industry's absolute emissions rose 18 percent, not 24 percent, he called it "a great story."

Contact Deidra Ciriello.

European Union Presents Emission Reduction Rules

Lawmakers earlier this week gave their backing to two draft laws detailing how the European Union (EU) will reduce its greenhouse gas output by a mandatory 20 percent below 1990 levels by 2020.  

The laws are targeted at EU member states and at heavy industry that participate in the EU emissions trading scheme (ETS).   The laws set the reductions that each must achieve as a contribution to the 20 percent target.
Before being adopted into EU law, the draft legislative texts must be approved by a vote of the full European Parliament.  They then must be negotiated with EU member states represented in the EU Council, currently headed by France, which holds the rotating presidency of the EU through December 31.  

Under the drafts, heavy industries such as cement plants taking part in the ETS, would be required to reduce their emissions 21percent by 2020 compared to 2005. At the same time, auctioning of emissions allowances would become the norm, compared to the current situation in which most are given to participants for free.

Industry continued to warn of the economic consequences of being forced to take part in emissions trading, as well as buying  emissions allowances at auction, especially when international competitors are not subject to the same rules.

A study published on October 7 by the European Cement Association said that if carbon prices rose to €35 (US $48) per ton, and industry was forced to buy allowances at auction, cement production "would be wiped out of the EU" after 2013.   

This would result in negative impacts for global emissions because relocating companies will be subject to less-stringent climate regulation elsewhere, the association said.

Contact Andy O'Hare.

Rules in Question for Hours of Service, Onboard Recorders

Although the Federal Motor Carrier Safety Administration (FMCSA) is aiming to finalize rules soon on drivers’ hours of service and the use of electronic onboard recorders (EOBRs), the actions may have been stalled because of a procedural glitch.

For the final rules to be published, it has to be vetted through the U.S. Secretary of Transportation who then delivers it to the White House’s Office of Management and Budget (OMB) for review. This process takes 90 days; however, in order to publish both rules by the end of 2008, they would have to had been delivered to the Secretary before the end of last month.  

Commenting about the situation, Steve Keppler, Director of Policy and Programs for the Commercial Vehicle Safety Alliance, expressed both optimism and doubt on finalizing the rules.

“I do think that EOBR will get out, but I don’t know about hours of service," he said, adding, "I’ve got to believe that if it doesn’t happen in the next week, the next two weeks at most, then its chances of getting out are slim.”

FMCSA Administrator John H. Hill said in May said he hoped to have a new rule governing the number of hours commercial motor vehicle operators can drive during specified times published by the end of 2008.   Administrator Hill also indicated that a final rule requiring commercial motor carriers with a poor HOS compliance record to use EOBRs also would also be finished by the end of 2008.

A spokeswoman for the Federal Motor Carrier Safety Administration was recently quoted as saying that a final rule on HOS regulations and EOBRs are “under departmental review, and we anticipate that they will be sent to OMB sometime soon.”

When the rules are finalized, it is believed drivers' hours of service rules will be very similar to (or unchanged) from what is currently in place.

Contact Kevin Walgenbach.

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