Weekly Climate Change Policy Update - June 15, 2009

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Article by Kyle Danish, Shelley Fidler, Kevin

Gallagher, Megan Ceronsky and Tomás

Carbonell

Commentary

Reports suggest that Speaker Pelosi may bring the ACES bill

to the floor of the House of Representatives during the week of

June 22. This implies that none of the eight committees to which

the bill was referred will hold a public mark-up, but rather that

the Democrats are working behind closed doors to reach agreement on

a procedural method (perhaps a new version of the legislation or an

amendment) that would add new matters from the various other

Committees with shared or additional jurisdiction on the issues and

address at least some of the remaining concerns of Members and

stakeholders. A new version would also allow for the inevitable

"technical" corrections. Something to watch for: a

possible enhanced role for the U.S. Department of Agriculture in

certifying domestic agriculture and forestry offsets . . . House

Republicans are advocating for 100 new nuclear power plants . . .

The Department of Energy has resurrected the FutureGen project in a

slightly less ambitious form . . . The CFTC Chairman predicts that

there will be a $2 trillion carbon market. The Congressional Budget

Office also weighs in, estimating that the ACES will generate a

$15/ton allowance price, rising to $26/ton by 2019. The CBO assigns

a key cost-saving role for offsets, but expects that it only will

be possible to use quantities well below the 2 billion ton ceiling

. . . Chairman Boxer insists that she wants to mark up climate

change legislation in the Environment and Public Works Committee

before the August recess. She also noted the lead role of Senator

Debbie Stabenow (D-MI) on offsets, and apparently expressed

enthusiasm for the direction Sen. Stabenow is headed on the role

for the U.S. Department of Agriculture in the offset programs . . .

International negotiations are underway in Bonn, and U.S.-China

talks were productive but did not yield a concrete

outcome.

Executive Branch

Presidential Nominations and

Appointments.

President Obama nominated John Norris, currently Agriculture

Secretary Tom Vilsack's chief of staff, to serve as one of the

five Commissioners of the Federal Energy Regulatory Commission

(FERC). If confirmed, Norris would fill the only vacant position on

the leadership of the Commission.

Warren F. Miller, Jr. was nominated to serve as Assistant

Secretary of Energy for Nuclear Energy. Miller is currently a

professor of nuclear engineering at Texas A&M University.

Sam Hamilton was nominated to serve as Director of the Fish and

Wildlife Service. A biologist who has worked at the Service for

thirty years, Hamilton now directs the agency's Southeast

regional office.

Bob Abbey, a private consultant with extensive experience in

federal and state public lands management, has been nominated to

serve as Director of the Bureau of Land Management.

The Senate Energy and Natural Resources Committee approved the

nominations of Catherine Zoi, for Assistant Secretary of Energy for

Energy Efficiency and Renewable Energy; Willian Brinkman, for

Director of the Office of Science at the Department of Energy; and

Anne Castle, for Assistant Secretary of the Interior for Water and

Science.

DOE Reaches Agreement to Resume FutureGen

Project. Energy Secretary Steven Chu announced last week

that the Department of Energy has reached an agreement with the

FutureGen Alliance to resume the FutureGen Project, which was

abandoned by the Bush Administration in January 2008 due to

mounting costs. The FutureGen Project is a joint venture between

DOE and a private consortium that has the goal of building a

commercial-scale coal-fired power plant with carbon capture and

sequestration (CCS) technology in Mattoon, Illinois. Under the new

agreement, DOE will contribute nearly $1.1 billion in funding and

the FutureGen Alliance will provide $400 to 600 million. The

FutureGen partners also decided to design the plant to have

emissions similar to that of a gas-fired facility, rather than the

"near-zero" emissions originally envisioned. Site studies

and preliminary design work are expected to resume in 2009 and

continue until early 2010, at which point the FutureGen partners

will determine whether to proceed with construction of the

plant.

CFTC Commissioner Predicts $2 Trillion GHG

Market. Bart Chilton, one of the Commissioners of the

Commodity Futures Trading Commission (CFTC) and the chair of the

agency's Energy and Environmental Markets Advisory Committee,

predicted last week that the U.S. market for GHG allowances and

offset credits could reach $2 trillion in value within five years

if Congress passes a climate bill in 2009. Chilton based his

estimate on the growth of global GHG markets since 2002, and

historical data showing that futures and options markets for

commodities are often 10 to 30 times as large as the market for

physical delivery. The Commissioner also backed a bill introduced

by Sen. Bernie Sanders (I-VT), which would vest CFTC with emergency

powers to curb excessive speculation in energy markets. Under the

American Energy and Security Act of 2009 (H.R. 2454), CFTC would be

the...