NEWS
Senate emissions bill would reduce oil imports, boost clean energy—NRDC
05/15/2008
Darren Samuelsohn, E&ENews PM senior reporter
A Senate global warming bill expected on the floor next month would lead to a dramatic reduction in U.S. oil imports while spurring production of more low-carbon energy and fuel-efficient vehicles, an environmental group said in a report today.
The Natural Resources Defense Council is the latest organization to model "America’s Climate Security Act," S. 2191. The bill from Sens. Joe Lieberman (I-Conn.) and John Warner (R-Va.) would establish a cap-and-trade program that seeks a midcentury reduction in heat-trapping greenhouse gases of about 70 percent compared with 2005 emission levels.
NRDC’s study, conducted by the International Resources Group in Washington, did not attempt to examine the macroeconomics of the bill, meaning there are no figures on the projected change to U.S. gross domestic product if the bill became law.
Instead, NRDC said it focused on the lowest-cost energy solutions that industries would likely reach for as they face new greenhouse gas emission restrictions under the Lieberman-Warner bill.
The report projects renewables and carbon capture with storage at coal-fired power plants becoming the most economical options for producing energy in the United States. By midcentury, NRDC said renewables—biomass, geothermal, solar and wind—will grow to between 50 and 60 percent of total U.S. electricity supply if the Lieberman-Warner bill became law.
NRDC’s study also found an increase in coal use through 2025 as carbon storage technologies become more widespread. Natural gas demand would decrease while nuclear power remains constant—a pair of findings that run counter to recent estimates from industry, U.S. EPA and the Energy Information Administration.
Impact on oil imports
The Lieberman-Warner bill also would lead to a sharp decline in U.S. oil imports as Americans demand less energy and also because of greater domestic production as the power industry pumps more of its CO2 emissions underground to open up access to once abandoned oil fields. According to NRDC, oil imports could fall from about 66 percent to about 35 percent of total U.S. oil supply between 2030 and 2035.
Greenhouse gas limits under the Lieberman-Warner bill also will stimulate greater fuel efficiency for new light duty vehicles—as much as 60 miles per gallon compared with a 35 mile per gallon limit under status quo energy and climate policies.
NRDC’s study did not consider the benefits of reducing emissions. That will be the subject of another report due out later this spring, said Dan Lashof, science director of the group’s climate center.
The NRDC study projects carbon dioxide allowance prices would increase steadily for compliance with the new climate policy, with $12 per ton credits in 2020, $20 in 2030 and almost $50 in 2050.
For comparison, EPA models show a $46 to $83 per ton price for CO2 in 2030 for the Lieberman-Warner bill, while EIA said CO2 prices would reach $30 to $76 in 2020 and $61 to $156 in 2030 (E&ENews PM, April 29).
Click here for the NRDC analysis.