Blog Post

Senate Passes Energy Bill, Cuts RPS and Oil Taxes

After failing to close debate on the Energy Bill, the Senate has passed the Bill by removing the renewable portfolio standard (RPS) and a keeping a $21 billion tax package that gives the oil industry billions in tax breaks. The newly trimmed bill will now head back to the House. It’s expected to be passed early next week before moving on to the White House for the presidential signature. While Bush had threatened to veto the bill, the exclusion of the RPS and new big oil taxes looks to provide a bland enough set of provisions that are palatable to everyone.

The biggest achievement of the bill is the increase in the corporate average fuel economy (CAFE) standard, which raises the average mileage of the auto fleet — including light trucks and SUVs — to 35 mpg by 2020. It also includes provisions to further Bush’s hopes for biofuels, requiring that some 36 billion gallons of renewable fuels be blended into gasoline by 2022.

The RPS would have required utilities to generate 15 percent of their energy from renewable resources; cutting it is a huge blow to utility-level clean tech. Many states, or consortia of states, have their own RPSs in place, but a federally mandated RPS would have pushed large-scale renewables beyond the coasts and into middle America.

While the potential of the first pie-in-sky iteration of the bill was huge for clean tech, with tax breaks pulled from big oil and given to emerging renewables, the current bill still contains some of the most significant environmental and energy legislation since the Clean Air Amendment of 1990.

The American Council for an Energy-Efficient Economy (ACEEE) released a statement saying that this energy bill will save consumers and business $400 billion dollars and reduce U.S. energy consumption by 7 percent and emissions by 9 percent by 2030 relative to their 2007 levels. ACEEE notes that the CAFE standards alone account for 60 percent of those energy savings.

The Senate is also trying to force a vote on the Farm Bill today, which will likely be the last piece of big energy legislation we see for quite a while. While this energy bill is a step in the right direction, it isn’t as big a step as it might have been and it’s unclear when the next step will come.

7 Responses to “Senate Passes Energy Bill, Cuts RPS and Oil Taxes”

  1. Craig,

    Adding energy storage (such as compressed air) is an added expense for renewables which will add to their cost. Solar thermal is the only renewable technology that might be able to build in some storage, but these are not widespread systems, and far less common than, for example, wind.

    I am not against RPS per se, but I do think that some smart-metering is needed to accompany the standard . It’s unfair and improper for a RPS to condemn the use of coal-fired plants for electricity but then demand that they also stick around as backup for them. Smart-metering is something we should be doing more of anyway (to help to shave some of the daytime demand peak to use more electricity at night) and this can play well synergetically with RPS.

    I am just saying the smart-metering should be part and parcel with RPS, both to lower overall costs, and to insure grid stability. Many RPS proponents do not seem to give adequate emphasis to this side of the equation.

  2. Craig Rubens

    Re: Jim

    You’ve commented several times before (which we love!) about the importance of realizing that some types of renewable energy do not produce perfectly consistency levels of energy and therefore a “sheddable load” must be added to keep the grid stable.

    You make it seem like adding renewable power sources, like solar and wind, to the grid will damn it to fail unless a backup system, presumably powered by fossil fuels, is added to make sure the grid stays up with the sun doesn’t shit and the wind doesn’t blow.

    While storage and consistency are issues to be considered, renewable technologies have been working hard to provide steady energy streams. Solar thermal power stores energy as heat and new technologies involving compressed air have shown promise.

    It seems backwards to condemn the entire RPS because it might only be a viable solution most of the time. I am convinced that had the RPS been instated the utilities could have figured out how to effectively balance the grid by 2020, when the RPS mandate would require 15 percent of the energy to be generated from renewables.

    Now it’ll be the cleantech entrepreneurs who get to figure it out.

    If I have misrepresented your argument please comment.

  3. RPS is a mistake unless a like amount of sheddable load is added to the grid. If this isn’t done, then high renewable levels of generation can lead to instability of the grid.

    I suppose Washington D.C. would realize that if more than two members of Congress had ever passed a science class…..