GLOBAL CLIMATE DEBATE

[SUITERS] Hello, and welcome to "Clean Skies Sunday," a weekly half-hour look at energy issues facing Washington and America -- I'm Tyler Suiters. The latest White House budget proposal is now out, President Obama emphasizing, among other things, "building on the largest investment in clean energy in history." That is last year's Recovery Act funding. He also mentioned, "increasing investment in scientific research." But that proposal presents a mixed bag of funding boosts and cuts to the government's energy and environmental sectors. We start with the proposed budget for DOE -- what would be a 7% increase over last year's funding. The White House also calls for essentially tripling the loan guarantee authority for the nuclear energy sector, up to $54.5 billion. Also, the budget would give $4.7 billion in "clean energy technology investments" through government funding. Now, while DOE would have more federal funding under the White House plan, EPA would actually take a budget cut. But it seems the Obama administration is asking the agency to prepare for a heavier workload in years to come. Under the FY 2011 proposal, EPA would get 3.2% less funding than it did last year. At the same time, the budget would give $56 million for what it calls "EPA and states "to address climate change effectively "through regulatory initiatives to control greenhouse gas emissions." That particular total includes $43 million in new funding -- more than triple last year's overall funding for the program. And unlike last year's proposal, the White House is not including any prospective revenue from a CO2 emission permit auction that would be the result of a cap-and-trade system. Joining us to talk more about these budget proposal issues is someone who is very well versed in this process. Christine Todd Whitman right now is co-chair of CASE, the Clean and Safe Energy group. But you probably know her best as the former governor of New Jersey, and also the former administrator of the EPA. Governor, it's wonderful to have you with us this morning. [WHITMAN] Thank you, Tyler. Glad to be with you. [SUITERS] Let's dive into these proposals. I want to start with the EPA side, if we may, and with what is not included. Unlike last year's White House proposal, there is no direct funding or revenue expected from a cap-and-trade system to cap carbon emissions. But there is a placeholder included here. [WHITMAN] Well, I think that's reflective of the reality on the Hill -- there's been so much political capital spent on the issue of health care that they see their chances of getting a cap-and-trade bill, as such, through the House and the Senate as being pretty negligible this year. So they've put the placeholder in there just in case something amazing happens, but I think the reality is that they're not expecting to get anything done this year. [SUITERS] Was last year's plan a mistake, to include all of that revenue and potentially upset some of those lawmakers who were on the fence about a cap-and-trade system? [WHITMAN] I think it was, because it's going to -- it's a very complicated system, and it's going to take a while to get it in place, so to start anticipating revenues almost from the get-go is a real stretch, and that makes people nervous, particularly in this economy, when you're looking at running the big deficits that we've been running up and the spending issues that we're facing. That scared some people off, and that's a problem. When you overreach, you tend to do that. You hurt yourself more than not. [SUITERS] When you said, Governor, "that makes people nervous," I think that phrase also applies to the potential for EPA regulation of greenhouse gas emissions, and this budget does include a major boost for EPA for the regulation of specifically that. [WHITMAN] Right, and you know how nervous that makes them, because you've seen some of the action on the Hill, especially on the Senate side, to try to curb EPA's ability to do this kind of regulation. And it's not the ideal way. EPA knows it's not the ideal way. They'd rather have legislation from the Hill, because any time EPA proposes a regulation, it goes to court. I mean, it just is never a smooth process. It can be years before you actually get the implementation. So if you really are serious about trying to curb greenhouse gases, then the best way to do it is through legislation, because then it's the law. [SUITERS] Governor, if we could shift to the Department of Energy's budget proposal now and specifically some of the funding that is included for the nuclear energy sector, a major boost in loan guarantee authority, virtually tripling what is already out there. [WHITMAN] Yeah, and that, from my perspective, is a very good thing. As you mentioned before, I co-chair the Clean, Safe Energy Coalition, CASE Energy, and that's all about getting facts out about nuclear. Nuclear is 20% of our power today, and it's 70% of the green power we have today. So, if we're serious about trying to clean up our air quality, irrespective of whether you believe in climate change or not, we want to have as much green energy as we can. Now, that does mean renewables, it means more conservation, but as far as base power goes, nuclear is the way to go, and then, of course, you've got the other side of nuclear, which is the enormous job potential. I mean, when you're building a new nuclear reactor, there are up to 2,400 jobs on a reactor. And after that, you've got anywhere from 300 to 700 permanent jobs that pay better than the average salary for that equivalent job in that community. So there are a lot of reasons to want to see nuclear. [SUITERS] Governor, final question for you -- Is the loan guarantee authority enough to spur U.S. nuclear construction? We are still emerging from a recession, and there is the fact that each reactor costs billions upon billions of dollars. In fact, no one knows, since one hasn't been constructed in so long. [WHITMAN] Actually, we do have a pretty good idea because the technologies that are going to be used are the ones that have been being used recently in the other countries around the world, so they're not the same kind of surprises as we had back when the nuclear industry first started. So they're between $6 billion to $8 billion. It's expensive, but, you know, to get the same amount of power as an average nuclear reactor from a wind-powered energy, that's between $10 billion and $12 billion. So nothing is going to come cheap here. If we're going to address our energy issues of a 23% increase in electricity demand by 2030, we're going to have to spend some money, and that's going to be the challenge. So then you have to step back and say, "What does us the most good, as we go forward, doing that?" And it's going to be a combination of things. You know, we, as Americans, would love to be told, there's one thing we have to do and that takes care of all of our problems. Unfortunately, that's not the way it's going to be with this particular challenge. [SUITERS] Christine Todd Whitman is a former EPA administrator and currently co-chair of the Clean and Safe Energy Coalition. Governor, thanks again for joining us this morning. In the meantime, what may be the key to passing a climate bill in the Senate. Clean Skies News now has a working draft copy of the nuclear title currently under construction by Senators Kerry, Graham, and Lieberman. I spoke with an energy policy insider who is familiar with the ongoing discussions in the U.S. Senate, and these are some of the critical components of the nuclear portion of that draft. First of all, language emphasizing the importance of commercial nuclear energy as a source of "clean" baseload power. That's something that could clear the way for nuclear inclusion in a clean energy electricity standard or something similar to a renewable electricity standard. Also, investment tax credits to create parity with the benefits enjoyed by wind and solar power. Both of those renewable sources received long-term extensions of their tax credits last year. And $38 billion in loan guarantee authority to be made available for nuclear projects. That seems to be less than the $54.5 billion the White House allotted in its budget proposal, but we may not be comparing apples to apples here. We won't know until all of this emerges in the Senate. And finally, language to streamline new plant permitting for companies with strong track records of safely operating nuclear facilities. That working draft nuclear title also contains language about recycling spent fuel. And this is a favorite topic among nuclear advocates in Congress. Republican senators often refer to France's nuclear recycling system, and this is an inside look at that process. Last year, Clean Skies News visited both the La Hague and MELOX recycling facilities in France, and I was there for that trip. Now, according to the Senate draft's short summary, the nuclear title "recognizes "the need to minimize the byproducts "of nuclear power creation by investing "in the research and development of processes to recycle spent waste." And that seems to support the recently named blue ribbon commission in its search for alternatives for managing U.S. nuclear waste. Now, I contacted the offices of both John Kerry and Lindsey Graham, some of the co-sponsors for this legislation, and I asked if they would comment on the working draft nuclear title. Senator Kerry's office tells me that "the draft floating around is very old language that is no longer operative," and that "the entire bill, including the nuclear component, is under constant negotiation and continues to evolve." On that same note, last week I discussed this working draft with Marv Fertel. He is President and CEO of the Nuclear Energy Institute here in Washington. And he tells me he sees a strong nuclear title as essential to getting any climate bill through the Senate. [FERTEL] I think all along, having a robust and appropriate nuclear title has been necessary to get votes, but it's not sufficient to get votes. The utility industry, overall, which nuclear is a part of, is looking at, how can you implement what's in there? And I think issues like the targets and timetables and other things are still issues. So we don't believe you'll get a good climate bill without a good nuclear title, but we don't believe it, alone, gets you the votes that you need to get one. You still have other things you need to fix. [SUITERS] And still ahead on "Clean Skies Sunday," 2010 is emerging as the year of the electric car. We're taking you out to the D.C. Auto Show. Plus, Tony Posawatz, the man in charge of Chevrolet's Volt, is talking to us about the drive toward plug-ins. And EPRI's Mark Duvall explains how all of these electric vehicles will impact our national grid. [BREAK] Snow diamonds glitter across a sleeping winter earth. December skies have always represented an end, a quiet, restful death of the year, of a romance, of a well-worn life. But I look at a frozen white landscape and see perfect harmony, an interconnected planet where everything eventually comes together. The line between sky and a snow-covered horizon disappears. A beautiful reminder that there may be nothing better than a fresh start. I wish I could capture cherished moments to put in my pocket and keep forever. Like the first cold snap of the season, when there's a crisp edge in the air that says, winter is almost here. And then a few months later when the sun cuts through the morning mist and you can almost hear the dogwood blossoms bursting out of their branches. But the best moment, by far, is when I'm playing with one of my kids and they get one of those deep belly laughs from way down inside, with a look on their face that can only be described as absolute joy. Some things are definitely worth hanging on to. [END BREAK] [SUITERS] Welcome back to "Clean Skies Sunday." The D.C. Auto Show has now wrapped up its week-long run here in the nation's capital, and with new CAFE standards for the automotive industry, plus programs to reduce CO2 emissions, green themes were very popular, both at the D.C. show and also at the North American International Auto Show -- this is the big one that happens every year in Detroit. "Clean Skies'" Lee Patrick Sullivan attended both of those shows, and he has this report. [SULLIVAN] And the awards keep coming at the D.C. Auto Show. [COGAN] Green Car Journal is proud to present its 2010 Green Car Vision Award to the Nissan Leaf. [SULLIVAN] Nissan only brought one car to this year's D.C. Auto Show and it walked away with the award that the Green Car Journal says symbolizes the future of green auto technology. [WOODARD] Nissan recognizes that zero emission is the only answer to questions about climate change and energy independence. The Nissan Leaf is first in a portfolio of all-electric vehicles that Nissan will introduce in the coming years. [SULLIVAN] The Nissan all-electric Leaf will debut later this year and will be able to go 100 miles on a single charge. They'll cost around $30,000. The folks at the Green Car Journal say this year's competition for Green Car Vision Award was tight, with several automakers getting high marks for innovation. Like Mercedes, with its "F-cell" hydrogen vehicle. [SCHWEIZER] I think what they saw in it is the fact that the vehicle has zero emissions, and it's possible from a well-to-wheel, not just a dispenser-to-wheel, scenario, with the production of hydrogen from clean materials, and the fact that this car is going to be introduced this year in the U.S. [SULLIVAN] Other cars up for the Green Car Vision Award included, for the first time, a Chinese automaker. The all-electric Coda sedan promises to go 100 miles on a single charge. Also, Ford was one of the finalists with its all-electric version of the Ford Focus, scheduled to hit showrooms next year. Now, the granddaddy of all green automakers, Toyota, did not rest on their reputation. One of their vehicles, a plug-in version of the Prius, was one of the five finalists. [BREW] The Prius that we know, that's on the road today, is powered by nickel metal hydride, whereas this is powered by a lithium ion battery. It is the same power train. It's got the same hybrid synergy drive system, except the lithium ion battery is able to hold enough energy to operate the Prius on all electric for up to 13 miles. [SULLIVAN] The folks at Toyota say, if driven correctly, the new Prius plug-in hybrid could get 80 to 100 miles per gallon. Now, that's visionary. In Washington, Lee Patrick Sullivan, Clean Skies News. [SUITERS] Among the high-profile policy leaders who visited both the D.C. and Detroit shows -- Ray LaHood. And I recently asked the Secretary of Transportation about the change of direction that he is now seeing among the American car companies this year. [LAHOOD] I think GM is very serious about the Volt. I don't think there's any question about it. I think the fact now that they've established new leadership at GM, that was announced today, with Mr. Whitacre becoming the permanent CEO, I think you'll see more of these activities. But I think battery-powered is what the American people want. [SUITERS] And joining us now to talk about the present and the future of electric vehicles here in the U.S. is Tony Posawatz with General Motors. He is director of the Chevy Volt program. He is also co-chair of the Electric Drive Transportation Association. Tony, great to have you with us today. [POSAWATZ] It's great to be with you. [SUITERS] Is it fair to say that 2010 is the year of the EV, judging from what we've seen in the auto shows, both there in Detroit and also here in Washington? [SUITERS] I think you're absolutely right. I think the electric vehicle and the plug-in car era is upon us. By the end of this year, 2010, I think you'll begin to see thousands of cars hit the market here in the United States. [SUITERS] Let's talk about the design you brought into the Chevy Volt, because it is an EV but has its gasoline-powered motor as well for backup. Why put both of them in a single vehicle rather than building up the battery strength itself? [POSAWATZ] Well, right now, the way battery technology is at, it's made great, great strides. We're now into the lithium ion technology and chemistry that people are familiar with in their cell phones, in their small devices and power tools. We're scaling that technology up to an automotive application so there's a lot of learnings there first. In spite of the advancements in that technology, most pure EVs -- battery-electric only -- can probably only go about 100 miles or so, which really doesn't satisfy customer needs and wants. In order to create a revolution that we hope to with the Chevy Volt, you need to make it so that it can be everyone's everyday car, and the Chevy Volt will give you over 300 miles. And you have choice, whether you use regular gasoline, ethanol in the future, or just plugging it in to drive in a very spirited and exciting advanced technology way. [SUITERS] Well, "breaking our dependence on foreign oil" is a catchphrase that really caught traction with voters back in 2008. The president says it repeatedly now. So does the energy secretary. But one of the realities of this entire process, Tony, is that, even if we go to EVs, electric vehicles, and even if we're relying on battery technology, if those batteries aren't made and manufactured here in the U.S., we're still dependent on a foreign entity, correct? [POSAWATZ] Absolutely, but I think one of the things that you're seeing, and we've put this into place with the Chevy Volt -- the Chevy Volt vehicle will be produced in Michigan in the United States. The battery pack will be produced by General Motors in the United States, and the electricity used to power this exciting new car is domestically produced. That's the one beauty of electricity. Electricity has many, many pathways. Many of them are very green and renewable, like wind and solar and the like. And it is available to everyone. And it's really, really inexpensive as it compares to gasoline today. Even more so in the future. Chevy Volt will probably cost you about 2 cents a mile to drive, using domestically produced electricity. An equivalent gasoline car is 10 to 12 cents a mile, and we anticipate that, relative to some of the fuel price projections, that gasoline will go up, it will cost you even more than that in the future. [SUITERS] And Tony, final question. The Washington, D.C. metro area is one of three regions where you and GM will roll out the Volt in 2011. Why D.C.? Why did you pick this particular region for that? [POSAWATZ] Well, the three regions that we're focused on with launching the Volt before the end of 2010 are California, Michigan, and the D.C. area. They're regionally dispersed areas. So we get different temperatures and climates. We've got each of the coasts covered, and certainly it is important to show evidence to our leaders in Washington, D.C., that this technology is real, it works, and this will help them further the cause as it relates to other initiatives, support incentives that we need to really usher in this electric vehicle plug-in era that is really upon us. [SUITERS] And the Chevy Volt rolls out in 2011. Tony Posawatz with General Motors, thanks so much for joining us from Michigan today. [POSAWATZ] Thank you. [SUITERS] We're now going to talk about the technological realities of a turn to an electric vehicle fleet, and with me now is Mark Duvall. He is director of the Electric Transportation Division at the Electric Power Research Institute, a regular guest of ours, and, Mark, good to have you back with us. [DUVALL] Thank you. Nice to be here. [SUITERS] Let's talk about the realities and begin kind of on the small scale, that is, with these cars themselves and where battery technology stands right now. [DUVALL] Okay, well, a lot has happened in the battery world. What we've seen is, lithium ion batteries, they used to be in our computers and cell phones, and they're really the battery of choice. You're not likely to see any vehicles in the near future that aren't based on lithium ion batteries. A lot has happened in the United States. The administration has spent about a billion and a quarter dollars on domestic battery production, so we've gone, literally, in the automotive industry, from having, two years ago, no talk about any domestic battery production -- we would get all the cells from Japan and Korea and China -- to having no less than at least six facilities that are using and matching federal funds to build production facilities in the U.S. Plus, all the support facilities for the packs and everything else like that. And we also had the loan guarantee, also through the DOE, to Nissan, for battery and vehicle production in Tennessee, so, a lot has happened on that front. [SUITERS] Many of the conversations around EVs, Mark, deal with infrastructure, and at a smaller scale, we're talking about charging stations. If you're not plugging in and charging at home, you need to do it somewhere else, especially if you're running low on juice. [DUVALL] Yeah, that's right, and we don't want to understate this, but the most important place to address infrastructure is at the home. You have to have a place to plug in. Cars are parked at home about 2/3 of the time. So getting that charger installed there -- it is a barrier to adoption. People are uncertain about doing electrical upgrades to their house. And some vehicles can be plugged into an 120-volt outlet and charged pretty well. But pure electric vehicles, people that want to charge quickly, they have to do a small upgrade. [SUITERS] Your assessment of the ability of the grid, our electricity delivery system, to handle such a bigger draw, if we go to an electric fleet here in the U.S.? [DUVALL] The good news is, we have a lot of capacity. We can generate all the electricity we need and we can transmit it to local areas easily, no matter how many electric vehicles you have. Even if you give everyone in the United States, put them in an electric vehicle. It's not going to be a problem to generate the power. Locally, there can be issues. An electric vehicle can draw about 5 kilowatts, which is about the load of a house. So if your utility is designed, your portion of the distribution system, for five houses, so you and four neighbors are on a transformer and then someone pulls an electric vehicle into their driveway, they just added a sixth house that wasn't really planned for, and if you really like it and go get one, then there's a seventh house there. So, locally, it can cause issues. And I think we spend a lot of time working on that issue because, if you simply just manage the charging of those cars, so you're charging them more at night rather than when they first come home. 5:00 P.M. is summer peak in most parts of the country, so the grid is stressed, and you just push that charging to sort of the after-9:00 time, and you're kind of smart about how you do it, you can really minimize the impact, which will keep electrical rates low and ensure that the people who don't have electric vehicles don't see the people who have electric vehicles as a problem. [SUITERS] Mark Duvall is director of Electric Transportation at EPRI. It's always good to have you. Thanks for joining us today. Still to come on this edition of "Clean Skies Sunday," a presidential task force is recommending spending more money to manufacture biofuels here in the U.S. -- why last week's White House announcement is such a controversial and complex political topic here on Capitol Hill. [BREAK] "Tomorrow" may be the most destructive word in our vocabulary. Tomorrow I'll spend more time with my family. I'll clean out the closets. I'll recycle. I'll donate to charity. Tomorrow. I'll walk instead of driving a few blocks, tomorrow. It's easy to look at these skies that seem to go on forever and say, tomorrow we can think about clearing the air. We can wait until tomorrow when someone else takes the first step, when our leaders come up with solutions, when someone invents the technology that will make everything easier. I think the time is right today, so we can hang on to this tomorrow. [END BREAK] [SUITERS] Welcome back. As expected, EPA has now finalized the Renewable Fuel Standard 2. That rule implements the long-term mandate of 36 billion gallons of biofuels manufactured here in the U.S. by the year 2022. And it also includes indirect land use when calculating the life cycle greenhouse gas emissions of various biofuels. Plus, for the first time, EPA is now setting specific amounts for different renewable fuels included in that mandate -- among them, cellulosic, biomass-based diesel, and total advanced renewable fuels. President Obama himself revealed that decision on Wednesday, one of several energy policy announcements, in fact, made that day. The announcements came during his meeting with 11 governors from around the country. The majority of those governors are from coal states, like Wyoming, West Virginia, Kentucky and Montana. And one of the White House announcements deals directly with the future of the U.S. coal industry. Here are the three energy policy announcements the White House made that day. First of all, there is now a presidential memorandum establishing an interagency task force on carbon capture and storage. This is a key to the coal industry. The president's goal is to have 5 to 10 commercial demonstration projects for what is known as CCS online by 2016. Also, USDA is proposing a biomass crop assistance program. The purpose here is to provide financial support for the commercialization of biofuels and renewable energy. And the major announcement on renewable fuels, of course, as we delineated -- EPA finalizes the rule to implement what is known as RFS-2. And joining us now to talk a little bit more about this Renewable Fuels Standard is Tom Buis. He is CEO of Growth Energy and also the former President of the National Farmers Union. Tom, good morning and thanks for joining us today. [BUIS] Great to be here. [SUITERS] Let's dive in, first of all, with what Lisa Jackson said about the carbon impacts of corn-based ethanol. This seems to be the headline here, that, in her words, they are "less than we thought." [BUIS] She did. She made a very strong statement that corn ethanol now qualifies as a low-carbon fuel standard in the eyes of the Environmental Protection Agency for the new RFS-2 rule. And that's very significant because there's been this debate about indirect land use for the past couple of years, what the impact is and how you really measure it. You know, there's no scientific consensus out there that "A," it's happening, and "B," to what extent, and who do you blame for it. You know, land use changes in other countries occur for a variety of reasons -- for domestic consumption, for export. And we have long felt that making an indirect land use change penalty only attributable to ethanol and biodiesel, the science doesn't support it. [SUITERS] Is this enough, Tom, to satiate the critics on Capitol Hill? House AG Committee Chairman Collin Peterson is still talking about his legislation to stop the EPA from this. But Jackson did say that one of the new details that has emerged from this is that the number of countries that are used to assess indirect land use impacts has increased and thereby, the bar has been lowered to some degree. [BUIS] Yeah, and I'll give Administrator Jackson a lot of credit for at least updating their modeling, updating to more accurate yield data on our production, more accurate acreage, and expanding the scope of the impact on foreign countries. But what we don't agree with is any type of indirect land use penalty at this time because there's no consensus. Even she said, last year during the debate in the Senate appropriations legislation, that the uncertainty is there. What they did yesterday, though, is they made a good decision, in my opinion, to say corn ethanol is definitely a low-carbon fuel standard. But if you get rid of the indirect land use penalty that can't be proven, we're actually an advanced biofuel. Our modern plants produce 57% less greenhouse gases than gasoline, which is what you're compared to. And that's important because you have to be at 50% to qualify for the full 36 billion gallons. [SUITERS] Tom Buis is CEO of Growth Energy, and clearly an industry that has a great deal at stake from the Renewable Fuel Standard. Tom, thanks again. [BUIS] It's great to be here. [SUITERS] And that does it for us for this edition of "Clean Skies Sunday." I'm Tyler Suiters. We hope you enjoy the rest of your weekend and we'll see you right back here next Sunday. Until then, you can join us anytime at CleanSkies.com and follow us on Twitter and Facebook. Enjoy the rest of your snowy Sunday and we'll see you next week. [END SHOW]