Value Engineering Energy Efficiency--The Kerry Lieberman Bill

Last week, Senators John Kerry and Joseph Lieberman debuted the American Power Act, their Senate compromise energy bill which was supposed to be nominally bipartisan, until Lindsey Graham decided to back out at the last minute. Among the compromises that Kerry, Lieberman and Graham appear to have made is to gut energy efficiency provisions from the Act.

Technically, provision for energy efficiency, and the building code, it is still nominally there, in Section 1603 of the draft bill, on page 199 for those of you following along at home. However, it looks nothing like the versions in Waxman-Markey and prior senate versions. In the Kerry-Lieberman version, states are allocated between 2.5% and 1% of all green house gas emission allowances. Of that allocation, .5% must go to Indian Tribes. With the remainder, the states may use for a variety of programs, including energy efficiency, renewable energy and transportation. Specifically:

1) Energy efficiency purposes, including implementation of programs related to—
(A) building codes that improve energy efficiency;
(B) energy-efficient manufactured homes;
(C) building energy performance labeling;
(D) low-income community energy efficiency improvements; and
(E) energy efficiency retrofits of existing buildings.

(2) Renewable energy purposes, including—
(A) deployment of technologies to generate electricity from renewable energy sources; and
(B) deployment of facilities or equipment, such as solar panels, to generate electricity or thermal energy from renewable energy resources in and on buildings in an urban environment.

(3) Cost-effective energy efficiency programs for end-use consumers of electricity, natural gas, home heating oil, or propane, including, if appropriate, programs or mechanisms administered by local governments and entities other than the State.

(4) Enabling the development of a Smart Grid (as described in section 1301 of the Energy Independence and Security Act of 2007 (42 U.S.C.14 17381)) for State, local government, and other public buildings and facilities, including integration of renewable energy resources and distributed generation, demand response, demand-side management,and systems analysis.

(5) Providing the non-Federal share of support for surface transportation capital projects under—
(A) sections 5307, 5308, 5309, 5310, 5311 and 5319 of title 49, United States Code; and
(B) sections 142, 146, and 149 of title 23, United States Code; except that not more than percent of allowances distributed to each State pursuant to this section shall be used for the purposes described in this paragraph.

The distribution among the states will be based on a complex formula:

(A) 1⁄3 of the allowances shall be divided equally among the States.
(B) 1⁄3 of the allowances shall be distributed ratably among the States based on the
population of each State, as contained in the most recent reliable census data available from the Bureau of the Census of the Department of Commerce, for all States at the time the Administrator calculates the formula for distribution.
(C) 1⁄3 of the allowances shall be distributed ratably among the States on the basis of
the energy consumption of each State, as contained in the most recent State Energy Data
Report available from the Energy Information Administration (or such alternative reliable
source as the Administrator may designate).

Essentially, Kerry Lieberman took the best, easiest and cheapest means of reducing greenhouse gas emissions—through energy efficiency—and gave them the very short end of the stick, meanwhile allocating the vast majority of federal resources to cap and trade. Is this a good compromise?

Little Energy Bill Likely To Include Energy Efficiency Code

Kerry and Lieberman are due to unveil their long awaited--and until Lindsay Graham's recent exit, nominally bipartisan--cap-and-trade bill this week.  But in a less heralded move, Harry Reid indicated that he could do a smaller energy bill which would likely include national energy efficiency codes.  According to EENews (subscription required):

The "smaller" proposal Reid referred to centers around legislation (S. 1462) the Senate Energy and Natural Resources Committee approved last June. The bill, which won the votes of four Republicans, would impose a national renewable electricity standard, overhaul federal financing for "clean energy" projects, establish a suite of efficiency measures, mandate new federal electricity-transmission siting power and allow wider oil and gas leasing in the eastern Gulf of Mexico.

So, even if cap-and-trade fails, this year may be a big one for federalizing green  building regulations. 

In The Department Of Doublespeak Department--We Cannot Deal With The Environment Because We Have An Environmental Problem

I don't often post twice in one day, but this came across my desk and I simply had to comment. 

I have written extensively about the progress of the Climate Bill in Congress.  Today, Lindsay Graham, Republican participant in the Kerry-Lieberman-Graham effort to put forward a bipartisan Senate version of a climate bill announced that he would not participate in developing climate legislation because of the BP oil spill.  According to the New York Times:

“In addition to immigration, we now have to deal with a catastrophic oil spill in the Gulf of Mexico which creates new policy and political challenges not envisioned in our original discussions. In light of this, I believe it would be wise to pause the process and reassess where we stand.”

What? Let me see if I understand this correctly--we have a huge environmental problem, so we cannot deal with our...huge environmental problem? Does anyone see this as a cynical pretext for actually having to particpate in putting forward a  bipartisan effort towards getting a climate bill passed? 

Boxer Climate Bill Redraft Adds Nothing To Energy Efficient Building Code Provisions

On Friday, Senator Barbara Boxer released a 923-page climate change and energy bill.  A draft of the bill had been leaked to the media in late September, and I discussed it here

Although the overall bill has swelled from 600+ pages to 900+ pages, there is still just 1.5 pages on the National Energy Efficiency Building Code, first proposed as Section 201of the Waxman-Markey Bill.  In the Waxman-Markey Bill, the House called for: 

1. Establishing a “national energy efficiency building code” for residential and commercial buildings, sufficient to meet each of the national building code energy efficiency targets.

2. Setting energy efficiency targets for the national building code: “on the date of enactment of the American Clean Energy and Security Act of 2009, 30 percent reduction in energy use relative to a comparable building constructed in compliance with the baseline code…effective January 1, 2014, for residential buildings, and January 1, 2015, for commercial buildings, 50 percent reduction in energy use relative to the baseline code; and…January 1, 2017, for residential buildings, and January 1, 2018, for commercial buildings, and every 3 years thereafter, respectively, through January 1, 2029, and January 1, 2030, 5 percent additional reduction in energy use relative to the baseline code.”

3. If consensus based codes provides for greater reduction in energy use than is required under the ACESA, the overall percentage reduction in energy use provided by that successor code shall be the national building code energy efficiency target.

4. Requiring that states and local governments comply with or exceed the national energy efficiency building code, and providing for enforcement mechanisms for states which are out of compliance.

The original Boxer-Kerry draft backed off of the Waxman-Markey structure entirely, simply mandating that the Department of Energy or "other agency head or heads as may be designated by the President shall promulgate regulations establishing building code energy efficiency targets...beginnning not later than January 1, 2014... "

The exact same language is mirrored in the current version of the Senate Bill at Section 163 (starting at page 200 of the current bill).  No structure, no mandatory energy efficiency targets, no requirments that states adopt energy efficiency codes by a certain date.  

This is a fascinating development because of the vast energy savings possible through regulation of new buildings and retrofits of old buildings.  According to a study by McKinsey on energy efficiency,

by 2020, the United States could reduce annual energy consumption by 23 percent from a business-as-usual projection by deploying an array of...efficiency measures, saving 9.1 quadrillion BTUs of end use energy...

The majority of the 900 page bill is dedicated to defining and establishing a cap-and-trade program.  While a worthy goal, I think that the Boxer bill misses the opportunity to grasp low-hanging fruit in energy savings through energy efficient building requirements.