Summary and Analysis of S. 1462: American Clean Energy Leadership Act of 2009, As Reported
Congressional research reportSep 29, 2009
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Summary and Analysis of S. 1462: American
Clean Energy Leadership Act of 2009, As
Reported
name redacted, Coordinator
Specialist in Energy Policy
name redacted, Coordinator
Section Research Manager
September 29, 2009
Congressional Research Service
7-....
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R40837
CRS Report for Congress
Prepared for Members and Committees of Congress
Summary and Analysis of S. 1462: American Clean Energy Leadership Act of 2009
Summary
As reported by the Senate Committee on Energy and Natural Resources, the six titles of S. 1462
are intended to address the energy security of the United States by promoting the development of
clean energy technologies, improving energy efficiency, encouraging the development of
domestic energy resources, promoting energy innovation and energy workforce development,
improving the stability of U.S. energy markets, and informing energy strategies through a series
of studies and reports. Some of these provisions build on similar or related provisions in the
Energy Policy Act of 2005 (EPACT05, P.L. 109-58), the Energy Independence and Security Act
of 2007 (EISA07, P.L. 110-140) and appropriations under the American Recovery and
Reinvestment Act of 2009 (ARRA, P.L. 111-5).
This report compares S. 1462 with certain energy provisions in H.R. 2454, the American Clean
Energy and Security Act of 2009, although there are substantial differences. H.R. 2454 is a
broader bill that includes a greenhouse gas cap-and-trade system not found in the Senate
Committee bill. (The energy provisions in S. 1462 are expected to be considered by the Senate
when crafting its own greenhouse gas bill with input from other key committees.)
Title I of S. 1462 would promote the commercial deployment of clean energy technologies by
modifying the Loan Guarantee Program and increasing Department of Energy’s (DOE’s)
authority to offer additional financial incentives.
Title II promotes enhanced energy efficiency through a combination of policies that target
manufacturing, appliances, buildings, and the electric grid.
Title III is intended to enhance U.S. energy security, according to the Committee Report, by
addressing the issues of critical electric infrastructure and its vulnerability to cyber attack; nuclear
waste disposal and reprocessing; additional petroleum storage; expansion of oil and gas leasing in
certain offshore areas; development of renewable energy resources on public lands; large-scale
and long-term geologic storage of CO2; and reduction of the reliance of U.S. island territories on
imported fossil fuels.
Title IV contains provisions for advancing energy innovation and workforce development,
including a variety of energy research, development, demonstration, and commercial application
activities; a Grand Energy Challenges Research Initiative to integrate basic and applied energy
research programs; expanding and modifying several energy programs, including the Advanced
Research Projects Agency—Energy; domestic vehicle battery manufacturing research;
lightweight materials research and development; methane hydrate research and development;
low-Btu gas and helium resources conservation; Arctic energy research, development, and
deployment; and ultra-deepwater and unconventional natural gas and other petroleum resources
R&D.
Title V contains several measures designed to stabilize the oil, natural gas, and electricity markets
and to enhance energy security.
Title VI would provide direction and authorization for a number of studies and reports that would
inform energy programs and policies.
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Summary and Analysis of S. 1462: American Clean Energy Leadership Act of 2009
Contents
Introduction ................................................................................................................................1
Key Provisions......................................................................................................................1
Brief Legislative History of S. 1462 ......................................................................................3
Title I—Clean Energy Technology Deployment ..........................................................................4
Subtitle A—Clean Energy Financing.....................................................................................4
Subtitle B—Improved Transmission Siting............................................................................8
Subtitle C—Federal Renewable Electricity Standard ........................................................... 10
Subtitle D—Energy and Water Integration........................................................................... 12
Subtitle E—Vehicle Technology Deployment ...................................................................... 14
Title II—Enhanced Energy Efficiency ....................................................................................... 15
Subtitle A—Manufacturing Energy Efficiency..................................................................... 15
Subtitle B—Improved Efficiency in Appliances and Equipment .......................................... 18
Subtitle C—Building Efficiency.......................................................................................... 20
Subtitle D—Electric Grid.................................................................................................... 23
Title III—Improved Energy Security ......................................................................................... 24
Subtitle A—Cyber Security of the Electric Transmission Grid ............................................. 24
Subtitle B—Nuclear Energy ................................................................................................ 24
Subtitle C—Improving United States Strategic Reserves ..................................................... 25
Subtitle D—Federal Oil and Gas Development.................................................................... 26
E—Public Land Renewable Energy Deployment................................................................. 28
Subtitle F—Carbon Capture ................................................................................................ 29
Subtitle G—Island Energy .................................................................................................. 32
Title IV—Energy Innovation And Workforce Development....................................................... 33
Subtitle A—Funding ........................................................................................................... 33
Subtitle B—Grand Energy Challenges Research Initiative................................................... 33
Subtitle C—Improvements to Existing Energy Research and Development Programs.......... 34
Subtitle D—Energy Workforce Development ...................................................................... 35
Subtitle E—Strengthening Education and Training in the Subsurface Geosciences and
Engineering for Energy Development............................................................................... 36
Subtitle F—Miscellaneous .................................................................................................. 36
Title V—Energy Markets .......................................................................................................... 37
Title VI—Policy Studies and Reports ........................................................................................ 38
Contacts
Author Contact Information ...................................................................................................... 41
Congressional Research Service
Summary and Analysis of S. 1462: American Clean Energy Leadership Act of 2009
Introduction
The American Clean Energy Leadership Act of 2009 (ACELA, S. 1462), an energy policy bill
reported out of the Senate Committee on Energy and Natural Resources on July 16, 2009, would
expand the deployment of clean energy technologies, improve energy efficiency and energy
security, encourage innovation and workforce development, and strengthen the monitoring
functions over energy markets, according to the Committee (S.Rept. 111-48). This report provides
a summary of the provisions under each of the titles and subtitles in the bill, and compares them
with other relevant legislation. In particular, the report relates the provisions of S. 1462 to similar
or identical provisions contained in the House-passed version of H.R. 2454, the American Clean
Energy and Security Act of 2009 (ACES), and to spending or tax provisions contained in the
American Recovery and Reinvestment Act of 2009 (ARRA, P.L. 111-5).
Although this bill is compared with certain energy provisions in H.R. 2454, substantial
differences exist between the provisions of this bill and the energy provisions of the combined
energy-climate change bill in the House. H.R. 2454 is a broader bill that includes a greenhouse
gas cap-and-trade system not found in the Senate Committee bill. Instead, separate climate
legislation is to be developed in the Senate Committee on Environment and Public Works and in
the Senate Finance Committee. Climate change legislation developed in the Senate may or may
not be combined with these energy provisions in S. 1462 to produce a package that might be
conferenced with H.R. 2454. (For more details on the House bill, see CRS Report R40643,
Greenhouse Gas Legislation: Summary and Analysis of H.R. 2454 as Passed by the House of
Representatives , coordinated by (name redacted) and (name redacted).)
Several CRS analysts contributed to this summary and analysis of S. 1462; their names and
contact information are located at the back of the report.
Key Provisions
The six titles of S. 1462 focus on clean energy technologies, energy efficiency, domestic energy
resources, energy innovation and energy workforce development, the stability of U.S. energy
markets, and a series of studies related to future energy strategies. Some of these provisions build
on similar or related provisions in the Energy Policy Act of 2005 (EPACT05, P.L. 109-58), the
Energy Independence and Security Act of 2007 (EISA07, P.L. 110-140), and appropriations under
ARRA.
Title I would promote the commercial deployment of clean energy technologies by modifying the
Loan Guarantee Program and increasing Department of Energy’s (DOE’s) authority to offer
additional financial incentives. It would establish a Clean Energy Deployment Administration
(CEDA), which would be a quasi-independent agency under the DOE. CEDA would use a Clean
Energy Investment Fund to operate a broad program of lending and other incentives to stimulate
the deployment of innovative and commercial clean energy technologies. In addition, the Federal
Energy Regulatory Commission (FERC) would be given an expanded role and authority to
coordinate the implementation of a national transmission infrastructure policy through regional
plans, and to exercise federal eminent domain authority to ensure that land is available for siting
transmission lines. This title would also establish a federal Renewable Energy and Energy
Efficiency requirement for electric utilities that sell electricity to end users. Such utilities would
have to obtain a percentage of their annual power supply from renewable energy or energy
efficiency starting at 3% in 2011 and rising incrementally to 15% by 2021. It would provide for
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Summary and Analysis of S. 1462: American Clean Energy Leadership Act of 2009
research and analysis of the impact of energy production on U.S. water resources, and of the use
of energy in the water sector. This provision is motivated by increasing awareness in Congress of
the relationship between energy and water (the energy-water “nexus”) whereby changes affecting
one resource may directly influence the cost, availability, or quality of the other. Finally, this title
would promote the deployment of advanced technology vehicles, especially electric and plug-in
hybrid vehicles that reduce petroleum consumption and greenhouse gas emissions.
Title II promotes enhanced energy efficiency through a combination of policies that target
manufacturing, appliances, buildings, and the electric grid. By providing government-backed
loans to developers of energy-efficient technologies, the bill would accelerate the implementation
of industrial and commercial applications of technologies or processes to enhance efficiency and
U.S. industrial competitiveness, and would establish research and innovation programs to develop
new energy-efficient manufacturing technologies. Energy and water efficiency of consumer
products, industrial equipment, and lighting is promoted through improved testing processes and
a more sophisticated application of the EnergyStar Program. Energy efficiency in buildings is
addressed through improved model building codes and standards, a grant program for multifamily
and manufactured housing efficiency improvements, establishment of training centers for
development of building efficiency expertise, weatherization assistance for low-income persons,
energy-efficiency retrofit programs, and mechanisms for encouraging energy efficiency in federal
agencies. The efficiency of the electric grid would be enhanced by using smart grid technologies
to reduce peak demand, according to an interagency plan, and directing the Federal Energy
Regulatory Commission to establish a national interconnection standard.
According to the Senate Committee, Title III is intended to enhance U.S. energy security by
addressing critical electric infrastructure, nuclear waste disposal, additional petroleum storage,
expansion of oil and gas leasing in certain offshore areas, development of renewable energy
resources on public lands, large-scale and long-term geologic storage of CO2, and reduction of the
reliance of U.S. island territories on imported fossil fuels. This portion of the bill provides for
expedited procedures and mechanisms to mitigate a cyber threat to the nation’s electric
infrastructure. A National Commission on Nuclear Waste would be established to study
alternative means of managing or disposing of spent nuclear fuel and waste from civilian nuclear
plants; alternatives would include reprocessing of spent fuel. Preparations for physical or
economic disruptions in petroleum supply would be enhanced by the establishment of a strategic
reserve of refined petroleum products to complement the existing strategic reserve of crude oil.
This section also expedites the conduct of an inventory of Outer Continental Shelf oil and gas
resources, as directed in EPACT05, and would open portions of the eastern Gulf of Mexico to
leasing. Title III also promotes the development of renewable energy resources on federal lands
by modifying the permitting process, requiring a programmatic environmental impact statement
for wind and solar development and establishing a series of field offices to manage the program.
Provisions in this title provide for establishment of partnerships for 10 large-scale demonstration
projects for geologic storage of CO2 and would provide $10 billion per project for
indemnification. Finally, Title III would establish the Affiliated Island Energy Independence
Team to provide technical, programmatic, and financial assistance to the Commonwealth of
Puerto Rico, Guam, American Samoa, the Commonwealth of the Northern Mariana Islands, the
Federated States of Micronesia, the Republic of the Marshall Islands, the Republic of Palau, and
the United States Virgin Islands to reduce reliance on imported fossil fuels through increased
efficiency and the use of indigenous clean-energy resources.
Title IV contains provisions for advancing energy innovation and workforce development.
Provisions include authorizing funds for a variety of energy research, development,
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Summary and Analysis of S. 1462: American Clean Energy Leadership Act of 2009
demonstration, and commercial application activities; establishing a Grand Energy Challenges
Research Initiative to integrate basic and applied energy research programs; improving a
collection of energy programs, including the Advanced Research Projects Agency—Energy,
domestic vehicle battery manufacturing research, lightweight materials research and
development, methane hydrate research and development, low-Btu gas and helium resources
conservation, Arctic energy research, development, and deployment, and ultra-deepwater and
unconventional natural gas and other petroleum resources R&D. This title would provide a
training program to build expertise for an energy workforce, and would support subsurface
geosciences and engineering education and training programs.
Title V contains several measures designed to stabilize the oil, natural gas, and electricity markets
and to enhance energy security. It would enhance the ability of the Energy Information
Administration (EIA) to collect data about product ownership and inventories for oil and natural
gas in the United States. This title would establish an office within EIA, along with an
interagency working group on energy markets, to monitor prices of crude oil and refined
petroleum product and to recommend any statutory authority that may be needed to oversee and
regulate energy markets. The Federal Energy Regulatory Commission would be authorized to
issue temporary emergency orders to suspend or modify tariff rates, terms, or conditions if
necessary to protect electric consumers, and to issue cease-and-desist orders to prevent the
manipulation of the electric or natural gas markets.
Title VI would provide direction and authorization for a number of studies and reports that would
include assessing helium and potash resources, improving energy policy planning, addressing
climate change in China and India, assessing the risk of international carbon leakage resulting
from a cap-and-trade program, examining foreign fuel subsidies, assessing biofuel energy
resources, reviewing the efficiency of electric generation facilities, evaluating the emissions of
alternative transportation fuels, and identifying options for reaching specific goals in the
reduction of U.S. dependence on foreign oil.
Brief Legislative History of S. 1462
The following legislative history is taken verbatim from the report of July 16, 2009, by the
Committee on Energy and Natural Resources (S.Rept. 111-48):
The text of the American Clean Energy Leadership Act was drawn from 6 bills introduced by
the Chairman, 3 of which were cosponsored by the Ranking Republican Member, and 9
chairman’s marks. The 6 bills introduced were:
S. 531, the Energy and Water Integration Act of 2009, introduced by Mr. Bingaman for
himself and Ms. Murkowski on March 5, 2009, which became subtitle D of title I;
S. 598, the Appliance Standards Improvement Act of 2009, introduced by Mr. Bingaman for
himself and Ms. Murkowski on March 16, 2009, which became subtitle B of title II;
S. 661, the Restoring America’s Manufacturing Leadership through Energy Efficiency Act
of 2009, introduced by Mr. Bingaman for himself, Ms. Collins, Ms. Stabenow, Ms. Snowe,
Mr. Bayh, Mr. Brown, and Mr. Pryor on March 19, 2009, which became subtitle A of title II;
S. 949, 21st Century Energy Technology Development Act, introduced by Mr. Bingaman for
himself, Ms. Murkowski, Mr. Dorgan, Mr. Voinovich, Ms. Stabenow, Mr. Lugar, and Ms.
Shaheen on April 30, 2009, which became subtitle A of title I;
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Summary and Analysis of S. 1462: American Clean Energy Leadership Act of 2009
S. 967, the Strategic Petroleum Reserve Modernization Act of 2009, introduced by Mr.
Bingaman on May 4, 2009, which became subtitle C of title III; and
S. 1013, the Department of Energy Carbon Capture and Sequestration Program Amendments
Act of 2009, introduced by Mr. Bingaman for himself, Mr. Barrasso, Mr. Dorgan, Mr.
Tester, Mr. Bayh, Ms. Landrieu, Mr. Casey, and Mr. Voinovich on May 7, 2009, which
became subtitle F of title III.
The nine chairman’s marks were on: energy innovation and workforce; siting of interstate
electric transmission facilities; nuclear waste management; cyber security; building
efficiency; federal oil and natural gas development; renewable energy development on public
lands; energy markets; and policy studies and reports. The Committee marked up the bill in
11 open business meetings on March 31, May 6, May 13, May 14, May 19, May 21, June 4,
June 9, June 11, June 16, and June 17, 2009. The Committee considered 219 filed
amendments (or divisions thereof), adopted 100, rejected 33, and 86 were either withdrawn
or not offered. On June 17, the Committee ordered the legislation, as amended, favorably
reported as an original bill.
Title I—Clean Energy Technology Deployment
Subtitle A—Clean Energy Financing1
Summary and Analysis of This Subtitle
A Clean Energy Deployment Administration (CEDA) would be established as a quasiindependent agency under the Department of Energy (DOE).2 CEDA would use a Clean Energy
Investment Fund to operate a broad program of lending and other incentives aimed at stimulating
the deployment of both “innovative” and “commercial” clean energy technologies. Over a
transitional period of 18 months, CEDA would absorb the existing DOE Loan Guarantee
Program,3 which was established by Title XVII of the Energy Policy Act of 2005 to support
“innovative” energy technologies and was later expanded by ARRA to allow support for certain
“commercial” energy technologies and transmission equipment.
Under the EPACT05 provisions, from August 2006 through September 2008, DOE issued five
solicitations for loan guarantee projects. In July 2009, DOE issued two more solicitations, funded
mainly by ARRA, for fast track (by the end of FY2011) renewable energy, electric power
transmission, and leading edge biofuel projects.4 DOE noted that it had “streamlined its processes
to accelerate these new loan solicitations.” The first loan guarantee under the program was issued
September 4, 2009, to a solar panel manufacturer.5
1
Prepared by (name redacted), 7-...., [redacted]@crs.loc.gov, and James Bickley, 7-...., [redacted]@crs.loc.gov.
2
Senate staff indicate that the intent of the legislation is to establish CEDA with a status that would be similar to that of
the Federal Energy Regulatory Commission (FERC).
3
The Loan Guarantee Program is currently administered by DOE’s Office of Chief Financial Officer (CFO).
4
The solicitation was issued on July 29, 2009, http://www.lgprogram.energy.gov/press/072909.pdf
5
The loan guarantee is for $535 million to Solyndra Corporation to support construction of a new manufacturing
facility. The guarantee was announced on March 20, 2009. Upon a matching commitment of $198 million from
Argonaut Private Equity, Solyndra was able to close on the loan guarantee. Ground-breaking took place on September
(continued...)
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Summary and Analysis of S. 1462: American Clean Energy Leadership Act of 2009
In August 2009, Congress voted to use $2.0 billion of the ARRA appropriation to extend the
“cash-for-clunkers” program, which encourages consumers to scrap old, inefficient cars and to
buy new, efficient ones.
S. 1462 would modify the Loan Guarantee Program and increase DOE’s flexibility to offer
additional financial incentives. Two of the proposed changes have been particular subjects of
debate. First, the bill addresses a limitation set by the Federal Credit Reform Act (FCRA).6 Under
the current Loan Guarantee Program, FCRA Sec. 504(b) requires new budget authority or other
funding limits to cover the subsidy costs (the present value of estimated long-term costs to the
government) that might result from any expansion of the portfolio of projects.7 The Senate bill
would exempt CEDA from the requirement for new budgetary authority to support loan
guarantees, and instead would allow balances in the fund to cover the cost of loan guarantees.
Opponents of the provision argue that it “would circumvent the appropriations process,” would
likely lead to an underestimate of costs, and could also “allow for potentially unlimited loan
guarantees, disproportionately benefit more expensive and risky technologies, and fail to ensure
that the cleanest technologies are prioritized.”8 Proponents counter-argue that “simply being in an
appropriations process does not change the risk calculation,” and that the bill “continues to
require full accounting of risks and costs of CEDA loans and loan guarantees in exactly the same
way that all loan and loan guarantee programs are currently handled.” They emphasize that FCRA
Sec. 503(d) would still apply, requiring annual reviews of “the performance of outstanding direct
loans and loan guarantees to improve estimates of costs.”9
Second, an issue affecting the debt financing structure surfaced in 2007 during DOE’s rulemaking
process for the current Loan Guarantee Program. The rule has been criticized for prohibiting a
shared priority (pari passu) collateral structure for project debt. Under present DOE rules, the
Department’s guaranteed portion of the debt would have a first claim (lien position) on all assets
of a project and any additional collateral pledged by the borrower. This means that any co-lenders
of the unguaranteed portion of the project debt would be subordinated to the governmentguaranteed debt. This situation has posed a deterrent to potential private sector co-lenders,
according to industry groups. The Senate bill proposes to allow “pari passu” financing, wherein
(...continued)
4, 2009. http://www.energy.gov/news2009/7078.htm
6
Title V of P.L. 101-508. Prior to FCRA implementation in FY1992, in any given fiscal year, the budgetary cost of a
new loan or loan guarantee was reported as its net cash flow for that fiscal year. The entire amount of a new direct loan
was recorded as an outlay. In contrast, a new loan guarantee was treated simply as a contingent liability and thus had no
reported cost. Those cash flow measures did not accurately reflect the true cost of a loan or loan guarantee. The true
cost of each instrument is its accrual cost, which reflects the full subsidy cost over the entire life of the loan or loan
guarantee. Subsidy costs are calculated on a net present value basis and include defaults net of recoveries, interest
subsidies, and fees. This accrual accounting places the cost of federal credit programs on a budgetary basis that is
equivalent with other federal outlays. See CRS Report RL30346, Federal Credit Reform: Implementation of the
Changed Budgetary Treatment of Direct Loans and Loan Guarantees, by (name redacted).
7
Cornelius E. Tierney et al. Federal Accounting Handbook (2d Ed). Appendix: Federal Credit Reform. 2007.
8
Union of Concerned Scientists et al. Untitled letter addressed to Members of the Senate Energy and Natural
Resources Committee. June 16, 2009.
9
Senate Committee on Energy and Natural Resources. Response to Criticisms of the Clean Energy Deployment
Administration (CEDA) Contained in the June 16, 2009 “Group Letter” Addressed to Members of the Committee on
Energy and Natural Resources. (undated)
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Summary and Analysis of S. 1462: American Clean Energy Leadership Act of 2009
DOE would take an equal lien position with other lenders in making claim to collateral for the
debt.10
CEDA Goals, Structure, and Operations
The Secretary of Energy would be required to develop goals for clean energy technology
deployment and provide short- and long-term numerical targets.11 CEDA would be operated by an
administrator and a board of directors that would have “substantial independence” within DOE.
The Administrator would be directed to “enhance, but not displace, private markets, and to
promote a self-sustaining portfolio of investments.” A “direct support unit” would be created to
issue loans, loan guarantees, letters of credit, insurance products, or other financial instruments. A
loan loss reserve would be established to provide an internal mechanism for balancing risks and
returns in the portfolio. An “indirect support unit” would aim to create financial products
designed to leverage private sector participation and to aggregate private debt into more
marketable products. Classifications and pricing structures may be created to provide
transparency and efficiency. CEDA would be allowed to issue securities based on the debt it
holds. 12
Clean Energy Investment Fund
A Clean Energy Investment Fund would be established as a revolving fund in the Treasury for
expenses needed to conduct the loan guarantee program. The purpose of the fund would be to
“make the program stable over the long term and limit the need for annual appropriations.” Fund
resources would be available “without fiscal year limitation.” Any combination of balances in the
revolving fund, or payments by the borrower, could be used to cover the subsidy cost of a loan
guarantee. 13 CEDA would be allowed to share the collateral risk by spreading it out in equal
amounts with other lenders. Fees collected for administrative expenses would be required to be
deposited in the Fund.
The existing functions and authorities of the DOE Loan Guarantee Program would be transferred
to CEDA within 18 months after enactment.14 At the same time, a direct appropriation of $10
billion would be transferred to the Fund. Fee payments could be retained in the fund for further
use. To encourage the development of “breakthrough” technologies, CEDA would be directed to
10
This provision appears in section 103(b)(3). DOE proposed to modify its loan guarantee regulations on August 7,
2009, to allow pari passu financing (74 Federal Register 39571).
11
The Secretary would be required to revise the goals periodically, in response to changes in policy and advances in
technology.
12
Section 106(a)(2) would allow CEDA to “insure, purchase, and make commitments to purchase, any debt instrument
associated with the deployment of clean energy technologies” and to “acquire, hold, and sell” any debt (or interest in
the debt) associated with the deployment of clean energy technologies. CEDA would be empowered to “lend on the
security of, and make commitments to lend on the security of, any debt that the Administration has issued or is
authorized to purchase under this section.” Based on the debt, it would be authorized to give security or guarantee; pay
interest or other return; and issue notes, debentures, bonds, or other obligations or securities.
13
This authority would be achieved by amending section 1702(b) of EPAct 2005 and by waiving section 504(b) of the
Federal Credit Reform Act (FCRA, Title V of P.L. 101-508).
14
The Loan Guarantee Program is currently administered by the Office of the Chief Financial Officer under the
authority of the Secretary of Energy.
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Summary and Analysis of S. 1462: American Clean Energy Leadership Act of 2009
reduce fees, to “the extent compatible with sound business practices.” All activities would be
required to yield “an appropriate rate of return.”
Comparison to Similar Provisions in H.R. 2454
There are three key differences between the two proposals: organizational structure, funding, and
potential effect on technology. First, the House bill would establish CEDA as an independent
corporation wholly owned by the federal government, 15 and it would modify the existing DOE
Loan Guarantee Program but otherwise leave it in place.16 In contrast, the Senate Energy
Committee proposed that CEDA be established as an agency within DOE17 and that CEDA and
the Clean Energy Investment Fund absorb the entire DOE Loan Guarantee Program.18
Second, there are differences in how the fund would be structured and funded. Given CEDA’s
proposed status as an independent corporation, the House proposed that the Department of the
Treasury would issue $7.5 billion in new authority for CEDA to issue “green” bonds to support
the fund. 19 Raising funds from bond sales would not be consistent with the FCRA concept that
funds be obtained through the appropriations process. In contrast, the Senate panel proposed that
$10.0 billion be transferred from the Treasury and that subsidy costs be treated outside FCRA
requirements. 20 Further, the Senate proposal would eliminate the FCRA requirement for new
budgetary authority to support loan guarantees.21 In a case where the project sponsors pay the
subsidy cost, no appropriations would be required and, thus, there would be no cap on these loan
guarantees.
Third, in comparison with the House bill, the Senate Energy proposal would allow greater support
for nuclear power project development. The House proposal22 would prohibit any single category
of energy technology (including nuclear power) from receiving more than 30% of CEDA’s total
financial support. That restriction is expected to affect nuclear power projects more than others
because those projects generally require a much larger capital investment and there are more
nuclear projects currently proposed than other technology projects. There is no similar constraint
in the Senate Energy bill.
15
H.R. 2454, Section 186.
H.R. 2454, Section 181. Further, Section 187 would forbid CEDA from providing direct or indirect support to
projects receiving support from the Loan Guarantee Program.
17
S. 1462, Section 105.
18
S. 1462, Sections 107 and 103.
16
19
H.R. 2454, Section 184. Section 106(a)(2) of the Senate Committee bill would empower CEDA to issue bonds and
other debt instruments. However, that bill does not propose a specific bond issuance as the House bill did.
20
S. 1462, Section 107.
21
Section 103 of S. 1462 would waive section 504(b) of FCRA, which requires that loan guarantee ceilings be set in
appropriation bills. Some have suggested that nuclear power facilities would be the main beneficiary of lifting that cap.
22
H.R. 2454, Section 187.
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Related Spending Provisions in the American Recovery and Reinvestment Act of
2009 (P.L. 111-5)
ARRA (§406) provided $6.0 billion for a “temporary program for rapid deployment of renewable
energy and electric power transmission projects.”23 Also, up to $500 million of that total may be
appropriated for “leading edge biofuels projects.”24 The $6.0 billion appropriation was expected
to leverage more than $60 billion in loan guarantees, mainly to support renewable energy
projects. In July 2009, DOE issued two solicitations, funded mainly by ARRA, to fast track (by
the end of FY2011) those renewable energy, electric power transmission, and biofuel projects.25
DOE noted that it had “streamlined its processes to accelerate these new loan solicitations.”
In August 2009, Congress voted to use $2.0 billion of the ARRA appropriation for loan
guarantees to extend the “cash-for-clunkers” program, which encourages consumers to scrap old,
inefficient cars and to buy new, more-efficient ones. 26 In House floor debate over the measure, the
House Speaker stated:
I am concerned about the fact that that money [$2.0 billion] is taken from that [loan
guarantee program] account, but it has not cost any opportunities for the program, because
the timing is such that that [loan guarantee] money would be spent next year. I do hope,
whether it’s in the continuing resolution or some other step along the way, that those funds
will be restored.27
The $2.0 billion transfer represents one-third of the total ARRA funding for the Loan Guarantee
Program.
Subtitle B—Improved Transmission Siting28
Summary and Analysis of This Subtitle
The provisions of Title B relate to transmission policy, planning, and siting. The bill would
establish a multi-faceted national transmission policy. The first principle listed is “support for the
development of new renewable energy generation capacity,” but there are numerous other
objectives, including cost savings, reliability enhancement, reduced power plant emissions, and
23
The $6.0 billion appropriation appears in the conference report (H.Rept. 111-16) on page 26 under the heading “Title
XVII – Innovative Technology Loan Guarantee Program.” The description of the special focus and temporary nature of
the new $6.0 billion program appears under §406 on page 31.
24
The provision specifies that the carve-out is for “[l]eading edge biofuel projects that will use technologies performing
at the pilot or demonstration scale that the Secretary determines are likely to become commercial technologies and will
produce transportation fuels that substantially reduce life-cycle greenhouse gas emissions compared to other
transportation fuels.
25
The solicitation was issued on July 29, 2009. http://www.lgprogram.energy.gov/press/072909.pdf
26
The initial $1.0 billion was appropriated by the Consumer Assistance to Recycle and Save (CARS) Program, which
was enacted as section 1301 of the Supplemental Appropriations Act, 2009 (P.L. 111-32). The $2.0 billion extension,
which drew funding from the ARRA provision for loan guarantees, was enacted as Making Supplemental
Appropriations for Fiscal Year 2009 for the Consumer Assistance to Recycle and Save Program (P.L. 111-47).
27
Congressional Record, July 31, 2009, p. H9237. Parenthetical comments added for clarification.
28
Prepared by Stan Kaplan, 7-...., [redacted]@crs.loc.gov.
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Summary and Analysis of S. 1462: American Clean Energy Leadership Act of 2009
maximizing “the contribution of demand side management (including energy efficiency and
demand response), energy storage, distributed generation resources, and smart grid investments.”
Transmission planning would be required to reflect these policy objectives. The bill would direct
FERC to “coordinate regional [transmission] planning to ensure that regional plans are integrated
into an Interconnection-wide transmission plan with respect to high-priority national transmission
projects.” “High-priority national transmission projects” are high-voltage lines or renewable
feeder lines that are part of a regional transmission plan.
The siting provisions would give FERC the authority to site and permit “high-priority national
transmission projects” that have been rejected or not timely acted on by state regulators. FERC’s
authority would extend to the Eastern and Western Interconnections, but not to the Texas
Interconnection.29 If a federally authorized project involves federal land, the Department of the
Interior (DOI) would act as the lead agency for coordinating federal environmental and other
reviews.
These provisions would constitute a substantial departure from historic transmission regulation,
which has centered on state control of construction decisions. Although the states would retain
transmission project permitting authority in the first instance, FERC’s backstop siting authority
would be broadened compared to the authority granted by the Energy Policy Act of 2005.
Planning would be given a regional and national focus under the aegis of FERC. And
transmission planning would be defined as a kind of integrated electric power planning, required
to consider a range of alternatives to traditional central station power plant and transmission line
construction. In respect to planning and construction, development of renewable energy projects
would be a policy objective, but not the sole or even necessarily the primary objective.
Comparison to Similar Provisions in H.R. 2454, American Clean Energy and
Security Act of 2009
Title I, Subtitle F of the House bill (ACES), “Transmission Planning,” includes policy, planning
and siting provisions. The policy goals and planning processes are directed to focus primarily on
facilitating the “deployment of renewable and other zero-carbon and low carbon” power sources.
Other objectives are noted, such as power system reliability and cost effective service, but these
are to be met in the context of the overarching goal of facilitating renewable/zero-carbon power
deployment. FERC’s role in the planning process is to be more one of facilitator than the directive
role outlined in ACELA. FERC is given the authority to supersede state authority over
transmission siting only in the Western Interconnection, and then only for projects that meet
certain criteria, including “identified as needed in significant measure to meet demand for
renewable energy.”
29
The electric power grid covering the contiguous states is divided into three units, which operate for the most part
independently. The Texas Interconnection, also known as ERCOT, covers most of Texas. The Eastern Interconnection
extends from the east coast to the edge of the Rockies. The Western Interconnection covers the balance of the
contiguous states. These provisions also exclude Alaska and Hawaii.
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Related Spending Provisions in the American Recovery and Reinvestment Act of
2009 (P.L. 111-5)
Title IV of Division A of ARRA appropriates $80 million to be used by DOE to support regional
transmission planning. Sec. 406 of this title creates a “temporary [loan guarantee] program for
rapid deployment of renewable energy and electric power transmission.” Qualifying projects must
be able to start construction no later than September 30, 2011.
Subtitle C—Federal Renewable Electricity Standard30
Summary and Analysis of This Subtitle
Sec. 132 of the Senate Committee bill would establish a federal renewable electricity standard
(RES) for electric utilities that sell electricity to consumers (for purposes other than resale). Such
utilities must obtain a percentage of their annual electricity supply from renewable energy sources
or energy efficiency, starting at 3% in 2011 and rising incrementally to 15% by 2021.
Renewable sources are defined as wind, solar, geothermal, and ocean energy; biomass, landfill
gas, qualified hydropower (i.e., incremental additions since 1992), marine and hydrokinetic
energy, coal-bed methane, and qualified waste-to-energy. Other types of renewable energy
resulting from innovative technologies may be qualified by the Secretary of Energy via a
rulemaking.
The requirements are to be met by the annual submission of federal renewable energy credits
(RECs), but up to 26.67% of the requirement may be met by energy-efficiency credits (EECs) in
any one year (following a petition by a state’s governor). Alternative compliance payments
(ACPs) of 2.1 cents per kilowatt-hour are permitted in lieu of meeting the renewable electricity
standard, with these payments going directly to the state in which the electric utility is located.
Trading of RECs is permitted, and banking of RECs is allowed for up to three years; RECs are
retired when submitted for compliance. EECs are awarded for electricity savings verifiably
achieved by the electric utility’s actions. The Secretary of Energy will provide guidelines and
regulations for measurements and baseline definitions in the award of EECs. No EECs will be
awarded for compliance with conservation or energy-efficiency standard programs.
Comparison to Similar Provisions in H.R. 2454, American Clean Energy and
Security Act of 2009
The structure and definitions of the Renewable Electricity and Energy Efficiency provisions in
H.R. 2454 and S. 1462 are essentially the same with regard to eligible renewable energy
technologies. Incremental hydropower added after 1992 can be considered renewable energy
under the Senate version, as opposed to 1988 in the House version.
S. 1462 requires compliance with its renewable electricity standard to begin in 2011, one year
earlier than the House version. The state of Hawaii is exempted from compliance in the Senate
bill. The Senate requirement advances to a maximum of 15% renewable electricity (of which
30
Prepared by Richard Campbell, 7-...., [redacted]@crs.loc.gov.
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Summary and Analysis of S. 1462: American Clean Energy Leadership Act of 2009
energy efficiency may constitute as much as 26.67%); the House requirement has a maximum of
20% renewable electricity, of which up to 25% may come from energy efficiency.
The implementing agency is designated as DOE in the Senate bill, while the House version has
FERC implementing the provision. Retail electric suppliers may receive RECs for complying
with a state RES by generating or buying renewable electricity under the Senate bill, but not in
the House bill. The Senate Energy bill has no parallel provision to the House bill’s recognition of
renewable energy programs implemented by states that centrally purchase renewable energy.
The alternative compliance payment is 2.1 cents per kilowatt-hour (kwh) in the Senate Energy
bill, compared with 2.5 cents per kwh in the House version. ACP funds can be used for nonrenewable energy deployment or energy efficiency under the Senate Energy bill, with generation
from nuclear, coal with carbon sequestration and storage, and electric vehicle deployment being
eligible. Direct grants to customers to offset higher costs from the RES are also allowed by the
Senate bill from ACP funds. The House does not allow for a waiver of RES requirements, while
the Senate Energy bill allows for deferment due to extremes of weather or nature, to avoid utility
rate incremental impacts of more than 4% in any year, or because of transmission constraints
preventing delivery of service. There is no provision in the House bill for loans to help electric
utilities comply with the RES.
The House bill increases the federal renewable energy purchase requirement beginning in 2012 to
6%, raising it to 20% by 2020, where it remains to 2039. The Senate Energy version stays with
the lesser requirements in the Energy Policy Act 2005.
The House bill defines one renewable energy credit as representing one megawatt-hour of
renewable electricity; a similar definition is assumed (but not specified) in the Senate Energy
version. Both renewable energy and energy-efficiency credits can be traded in the Senate bill,
while only renewable electricity credits can be traded in the House legislation. Triple credits are
granted when electricity is provided through distributed generation (DG).
Definitions of distributed generation eligible for triple RECs differ between the two bills. The
Senate Energy bill defines DG systems as being at or near a customer site, providing electric
energy to one or more customers for purposes other than resale to a utility through a net metering
arrangement. The House version defines DG as a facility that generates renewable electricity,
primarily serving one or more electric consumers at or near the facility site, which is no larger
than 2 megawatts at the time of enactment (or 4 megawatts after enactment), generating
electricity without combustion. This rules out biomass or municipal solid waste combustion as
eligible sources of DG. Both provisions require electricity generation, thus ruling out thermal
applications (for example, hot water or steam systems). While not specifying a size limit on DG
systems, the Senate only gives triple RECs to DG systems less than 1 MW; the House gives triple
RECs to all eligible DG systems.
The two bills differ in the exclusions that would be allowed from the calculation of a utility’s total
annual electricity supply, called the “base quantity of electricity.” This is the amount of annual
electricity supply that the renewable energy and efficiency percentages would be applied to. By
reducing the annual base quantity, the exclusions would also reduce the total amount of
renewable energy and efficiency that would be required.
Both bills exclude existing hydro (except qualified hydro), nuclear capacity placed in service after
the date of enactment, and the quantity of electricity in a CCS facility proportional to the amount
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Summary and Analysis of S. 1462: American Clean Energy Leadership Act of 2009
of greenhouse gases (GHGs) sequestered. The Senate Energy bill additionally excludes capacity
of a municipal solid waste facility owned by, or sold under contract/rate order to, an electric
utility, and nuclear power plant efficiency improvements and capacity additions made after the
date of enactment.
Subtitle D—Energy and Water Integration31
Summary and Analysis of This Subtitle
Subtitle D provides for research and analysis of the impact of energy production on U.S. water
resources, and of the use of energy in the water sector. The subtitle is motivated by increasing
awareness in Congress of the relationship between energy and water (the energy-water “nexus”),
whereby changes affecting one resource may directly influence the cost, availability, or quality of
the other. To date, energy-water data collection and analysis have been mostly fragmented,
anecdotal, or incomplete. In general, Congress has been seeking more information about energywater relationships as an aid to developing more integrated energy and water policies.
Sec. 141 calls for a National Academy of Sciences study of the “energy-water nexus,” which
refers to the impacts on water resources of energy production, defined broadly to include both
electric power and transportation fuels. Relevant water uses likely include cooling of electric
power plants; hydroelectric power generation; irrigation water for biofuel crops; the use of water
in oil and natural gas production (e.g., hydrofracturing); water requirements in fuel refining; and
other water uses.
Sec. 142 would require the Secretary of Energy to identify water efficiency strategies and
technologies in fossil-fuel-fired, solar thermal, and nuclear power generation. Taken together,
these provisions would provide information on the water resource implications of changes in the
nation’s power generation portfolio in the context of volatile fossil fuel prices and policies to
reduce U.S. greenhouse gas emissions.
Sec. 143 would require the Secretary of the Interior to study the energy used for storing and
delivering water at major Bureau of Reclamation projects, and the identification of opportunities
to reduce this consumption and its costs. Significant energy can be consumed in delivering water,
especially in such states as California, where large quantities are lifted and transported long
distances. No similar Bureau of Reclamation studies have been previously authorized or
performed.
Sec. 144 directs the Secretary of the Interior to operate a federally constructed brackish
groundwater desalination research facility in New Mexico. Previously, there had been
consideration of having a nonfederal entity be the operator. The facility is charged with
developing cost-effective desalination technologies for brackish and impaired groundwater in
inland states, including the integration of desalination and renewable energy technologies and the
desalination of water from oil and gas production. A significant barrier to greater adoption of
desalination is the energy intensity of available technologies.
31
Prepared by Nicole Carter, 7-...., [redacted]@crs.loc.gov, and Paul Parfomak, 7-...., [redacted]@crs.loc.gov.
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Summary and Analysis of S. 1462: American Clean Energy Leadership Act of 2009
Sec. 145 seeks to address a lack of data about energy use in the procurement, delivery, end use,
and treatment of water to clarify linkages between energy efficiency and water efficiency in the
United States. Few surveys or reports by federal agencies characterize water withdrawal or
consumption at the level of specific end-uses such as clothes washing, landscape watering, or
industrial process cooling use. Likewise, there are no systematic and comprehensive studies of
energy used by water utilities for water withdrawal, delivery, treatment, or recycling.
Consequently, the section requires the Department of Energy to develop a baseline of water use
and water-related energy use across the U.S. economy that may ultimately be comparable to the
end-use energy information available from the agency’s Energy Information Administration.
Sec. 146 directs the Secretary of Energy to develop an energy-water roadmap defining future
research and development efforts to address the energy-water nexus; a report to Congress
describing the roadmap and recommended actions would be required within 120 days of
enactment. This section builds on previous legislation calling for reports on the energy-water
nexus and creation of a DOE energy-water program (e.g., P.L. 109-58 § 979).
Sec. 147 would require the Secretary of Energy to offer competitive technology demonstration
grants focused on saving energy through water conservation in commercial, residential, and
mixed-use development projects. The grants are intended to direct attention to new opportunities
for energy efficiency that may be overlooked by programs focused on water savings only.
Sec. 148 would offer technical assistance for energy and water efficiency to rural drinking water
and wastewater utilities, many of which may lack the resources to identify and pursue costeffective savings opportunities on their own.
Sec. 149 mandates a study, led by the Department of Energy, examining industrial water use, peak
energy use in water treatment and delivery, nonpotable (e.g., recycled) water, and energy
“embedded” in water by water utilities. These aspects of the water-energy relationship are viewed
as particularly lacking in market data and offering significant potential for both water and energy
savings. Accordingly, the study would determine ways to promote the efficient use of water and
energy.
Comparison to Similar Provisions in H.R. 2454, American Clean Energy and
Security Act of 2009
No similar provisions to Subtitle D are in H.R. 2454. However, the House bill (§215) would
formally establish an existing agency-initiated WaterSense program at the U.S. Environmental
Protection Agency. The program identifies and promotes water-efficient products, buildings, and
landscapes that may reduce energy consumed for pumping, transporting, treating, and heating
water. Although H.R. 2454 contains no provision similar to of S. 1462 on energy used by Bureau
of Reclamation water projects, the House bill (§195) would require an update of an earlier multiagency report on the potential for expanding hydroelectric power generation at federal water
facilities.
Related Spending Provisions in the American Recovery and Reinvestment Act of
2009 (P.L. 111-5)
Although CRS was unable to identify uses by the Department of the Interior (DOI) or the Army
Corps of Engineers of ARRA funds for the specific activities authorized by Subtitle D, activities
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Summary and Analysis of S. 1462: American Clean Energy Leadership Act of 2009
that could complement Subtitle D were funded. For instance, $13.5 million in DOI’s ARRA funds
was directed to constructing a new energy- and water-efficient building for Bureau of
Reclamation regional operations in Boulder City, NV.
Subtitle E—Vehicle Technology Deployment32
Summary and Analysis of This Subtitle
Secs. 151 through 155 would establish grant programs and require federal studies in support of
advanced technology vehicles, especially electric and plug-in hybrid vehicles. Most notably, Sec.
152 would require the Secretary of Energy to establish a program to provide grants to state and
local governments for the demonstration and commercial application of plug-in hybrid vehicles.
Funds would be used to carry out eligible programs, including support for vehicle purchases,
installation of recharging infrastructure, and electric grid upgrades. Sec. 154 would establish a
pilot program to provide grants for the demonstration of pre-commercial plug-in vehicles in the
federal fleet, and for the installation of recharging infrastructure at federal facilities. Mandated
studies would include a comprehensive analysis of energy use in light-duty vehicles by the
National Academy of Sciences, an assessment of the necessary infrastructure to support electric
vehicles, and a report to Congress with recommendations for establishing and adopting industry
standards for electric drive transportation. In all cases, the bill authorizes “such sums as are
necessary,” as opposed to authorizing a specific amount of funding.
Comparison to Similar Provisions in H.R. 2454, American Clean Energy and
Security Act of 2009
H.R. 2454 would provide much more support for advanced vehicles than would S. 1462. Most
notably, a significant share of allowances from H.R. 2454’s cap-and-trade program would be
allocated to support manufacturing of plug-in hybrid and other advanced vehicles. Distribution of
these allowances would effectively make them grants to automakers and parts suppliers—
including battery manufacturers—and could easily be worth $1 billion or more each year. Other
support for advanced vehicles in H.R. 2454 includes an expansion of Energy Independence and
Security Act’s (EISA’s) Advanced Technology Vehicle Manufacturing (ATVM) loan program, and
new model standards that state regulatory authorities and non-regulated electric utilities may
adopt. H.R. 2454 would authorize (but not require) the Secretary of Transportation to establish
standards requiring automakers to produce flexible fuel vehicles (FFVs). H.R. 2454 would
require the Environmental Protection Agency to establish greenhouse gas emissions standards for
heavy-duty and non-road vehicles and engines, and would require states and metropolitan
planning organizations (MPOs) to establish greenhouse gas emissions reduction plans.
Related Spending Provisions in the American Recovery and Reinvestment Act of
2009 (P.L. 111-5)
ARRA established a program of $2.0 billion for facility funding grants to manufacturers of
advanced battery and battery system components. Covered activities include the production of
32
Prepared by Brent Yacobucci, 7-...., [redacted]@crs.loc.gov.
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Summary and Analysis of S. 1462: American Clean Energy Leadership Act of 2009
lithium ion batteries, hybrid electrical systems, system components, and software. ARRA also
appropriated $400 million in transportation electrification grants, and provided $300 million to
provide grants to states, localities, and metropolitan transit agencies for the purchase of
alternative fuel and advanced technology vehicles.
Title II—Enhanced Energy Efficiency
Subtitle A—Manufacturing Energy Efficiency33
Summary and Analysis of This Subtitle
DOE would be directed to help manufacturers increase the use of new technology to improve
energy efficiency, stimulate economic growth, improve industrial competitiveness, and reduce
GHG emissions, in preparation for a possible carbon-constrained global marketplace.
A DOE grant program is proposed that would support the formation of revolving loan programs
that would be operated by partnerships among states, community development lenders, and
private financial institutions. 34 The loans would help manufacturers increase energy productivity,
enable production of clean energy technologies, and improve industrial competitiveness. A total
of $1.5 billion is authorized, $500 million for each fiscal year from 2010 to 2012. The grants
would go to lenders in the state partnerships, who would be responsible for ensuring a minimum
50% non-federal match. The short time frame of the authorizations for manufacturing plant
upgrades would mean that industry would have to be prepared to quickly evaluate the costs and
benefits of capital equipment decisions.
Another DOE cost-shared competitive grant program would be made available to state-industry
partnerships to develop and deploy innovative energy-efficient industrial technologies and
processes, with the goals of reducing energy use, pollution, and GHG emissions, while improving
industrial cost competitiveness. 35 The federal portion of each grant would be capped at $500,000,
and would require an equal or greater non-federal match.
DOE would be directed to establish additional Industrial Research and Assessment Centers
(IACs) and to establish Centers of Excellence at the top-performing IACs for coordination with
other federal agency programs that support manufacturing and building technology programs. 36
Organizational changes at DOE and/or other federal agencies would be required under three
provisions. First, R&D partnerships would be established between programs under the Office of
Industrial Technologies (OIT) and other programs under the Office of Energy Efficiency and
Renewable Energy (EERE) and the Office of Science (OS). Those partnerships would be focused
on promoting transfer of “early stage” technology development and manufacturing capabilities to
industry.37 Second, an industry-government R&D partnership would be established within OIT, in
33
Prepared by (name redacted), 7-...., [redacted]@crs.loc.gov, and Richard Campbell, 7-...., [redacted]@crs.loc.gov.
This provision appears in Sec. 201 of the Senate Committee bill.
35
This provision appears in Sec. 206 of the Senate Committee bill.
36
This provision appears in Sec. 204(c) of the Senate Committee bill.
37
This provision appears in Sec. 202 of the Senate Committee bill.
34
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Summary and Analysis of S. 1462: American Clean Energy Leadership Act of 2009
collaboration with the National Institute of Standards and other agencies, to help industry shift
toward “sustainable” manufacturing and industrial processes. 38 Third, an advisory steering
committee would be established to make recommendations on planning and implementation of
OIT’s programs.39
DOE planning activities and studies would be required by three provisions. First, DOE would be
required to prepare an assessment of the energy and GHG emissions reduction potential of
commercially available energy-efficiency technologies that are not yet widely deployed across
energy-intensive industries. 40 Second, DOE would be directed to produce industry-specific
technology road maps for a “Future of Industry” program aimed at further reducing energy
intensity and GHG emissions.41 Third, DOE would be required to arrange for the National
Academy of Sciences to study opportunities and barriers to developing new manufacturing
capabilities for producing “advanced” energy technologies. The study would focus on the
development of a “clean technology supply chain” that would secure the domestic production of
“high value” equipment and prevent its loss to overseas competitors.
Comparison to Similar Provisions in H.R. 2454, American Clean Energy and
Security Act of 2009
The Senate Committee bill’s proposal to establish state revolving loan programs is identical to a
provision in the House bill, except that the proposed authorization of $1.5 billion over three years
is far less than the House bill’s proposal to provide $30.0 billion over two years.42
Each bill also would support technology transfer and deployment through the use and expansion
of “centers” at universities. The Senate Committee bill would expand the number of IACs and
create “Centers of Excellence” at some of them to serve as sources of “best practices” for
“sustainable” manufacturing, to conduct supply chain analysis, and to provide coordination
among the IACs, other federal technology centers, and the national laboratories. The House bill
has three provisions to expand or strengthen the centers with broader, but related, purposes.43
First, “energy innovation hubs” would be established to promote deployment of clean energy
technologies to support regional economic development, reduce GHG emissions, and support
national technological leadership.44 Second, “centers for energy and environment” would support
industry, clean energy applications, and buildings technology deployment. 45 Those centers would
include a training component. Third, “building assessment centers” would be created to support
applications of new technologies and the development of training and education programs.46
38
This provision appears in Sec. 205 of the Senate Committee bill.
This provision appears in Sec. 208 of the Senate Committee bill.
40
This provision appears in Sec. 203 of the Senate Committee bill.
41
This provision appears in Sec. 204(b) of the Senate Committee bill.
42
The provisions appear in Sec. 201 of the Senate Committee bill and Sec. 246 of the House bill.
39
43
Sec. 172 of the House bill would support industry research collaborations and development of manufacturing
processes, but those activities would take place under the ARPA-E program and would not be associated with the
establishment or expansion of university-based “centers.”
44
This provision appears in Sec. 171 of the House bill.
45
This provision appears in Sec. 174 of the House bill.
46
This provision appears in Sec. 173 of the House bill.
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In sum, this subtitle of the Senate Committee bill appears to be focused mainly on manufacturing
and competitiveness. The House bill includes those aims, but within a broader context of more
general goals for accelerated clean energy equipment deployment and the potential for clean
energy industries to stimulate regional economic development.
The Senate Committee bill has seven provisions that do not appear in the House bill. All are
described under the previous section. Those provisions include the innovation deployment
grants,47 organizational changes, 48 and the planning and study provisions. 49
Similarly, the House bill has three provisions that do not appear in the Senate Committee bill. 50
First, an existing industrial standards program would be expanded to include plant energyefficiency certification standards.51 Second, DOE would be directed to create a monetary award
program to spur innovation in thermal energy recovery by owners and operators of electric power
plants and industrial facilities.52 Third, the Department of Commerce would be directed to
establish a clean energy manufacturing supply chain initiative to help manufacturers transition to
the use of clean energy, reduce energy intensity, curb GHG emissions, and increase the use of
innovative manufacturing technologies. That initiative would seem to closely complement the
proposal, in both bills, for DOE to support the creation of state revolving loan programs to aid
manufacturers.53
Related Spending Provisions in the American Recovery and Reinvestment Act of
2009 (P.L. 111-5)
ARRA (Title IV) provided $2.0 billion for facility funding grants to manufacturers of advanced
battery and battery system components. Covered activities include the production of lithium ion
batteries, hybrid electrical systems, system components, and software. In a related action, the
Continuing Resolution for FY2009 (P.L. 110-329) provided $7.5 billion to leverage a $25 billion
loan program to retool facilities to produce fuel-efficient advanced technology vehicles.
ARRA (§1302) established a tax credit that can be used to re-equip, expand, or establish a facility
that is designed to manufacture equipment that is used to produce renewable energy (solar, wind
geothermal, and other), fuel cells, microturbines, energy storage systems for electric/hybrid
vehicles, certain electric grid equipment, renewable fuels property, energy-efficiency
technologies, smart grid equipment, plug-in hybrid vehicles, and equipment to capture and
sequester carbon dioxide. ARRA allows up to $2.3 billion in credits to be allocated. JCT
estimated the cost at $1.6 billion over 10 years.
47
Section 206 of the Senate Committee bill.
Sections 202, 205, and 208 of the Senate Committee bill.
49
Sections §203, 204(b), and 207 of the Senate Committee bill.
48
50
Those provisions, and the others in the House bill, are described in CRS Report R40643, Greenhouse Gas
Legislation: Summary and Analysis of H.R. 2454 as Passed by the House of Representatives , coordinated by (name
redacted) and (name redacted).
51
This provision appears in Section 241 of the House bill.
52
This provision appears in Section 242 of the House bill.
53
This provision appears in Section 247 of the House bill. The proposal for revolving loan programs was described in
the previous section.
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Summary and Analysis of S. 1462: American Clean Energy Leadership Act of 2009
Subtitle B—Improved Efficiency in Appliances and Equipment54
Summary and Analysis of This Subtitle
Energy-efficiency standards for certain appliances and equipment would be established or
strengthened. Specifically, new standards would be legislated for portable light fixtures, certain
lamps, and commercial furnaces. New procedures would be set in place to allow public requests
to revise test procedures and to change efficiency standards. A rebate program would be
established for energy-efficient motors. Studies would be undertaken on DOE compliance with
legislated standards, the use of direct current in certain buildings, and an assessment of a
proposed Energy Superstar category under the Energy Star program.
Over the past three decades, Congress has legislated efficiency standards for many types of
appliances and given DOE authority to set standards by rulemaking for many others. As new
energy-using technologies are brought into commercial use, opportunities continuously arise to
establish efficiency standards for new categories of equipment. Also, new technologies, such as
sensors and computer controls, may create opportunities to improve efficiency for devices where
it may have previously been difficult or impossible. Further, as technologies advance,
opportunities may arise to improve efficiency beyond the level where previous standards had
been set. The provisions of the Senate bill address efficiency opportunities within each of those
three categories.
The formation of federal appliance standards has historically taken place within a context of
major tensions between industry concerns about regulation and state initiatives to set standards.
When a variety of state standards emerged, industry tended to seek federal action to set a uniform
national standard. Further, tensions between opponents and proponents of new federal standards
have occasionally led to court disputes. For the most part, however, such tensions have been
addressed through a collaborative process that brings together affected industries with proponents
of new efficiency standards. That process, in turn, has often led to the resolution of major
differences before legislative proposals are introduced. That appears to be the case with the
standards proposed in the Senate Committee bill.
Comparison to Similar Provisions in H.R. 2454, American Clean Energy and
Security Act of 2009
The two bills have several identical and similar provisions for improving efficiency in appliances
and equipment. There are identical lighting efficiency standards proposed for portable light
fixtures, art work light fixtures, GU-24 base lamps, and incandescent reflector lamps. The bills
also propose identical efficiency standards for commercial furnaces. Regarding motor efficiency,
the two bills have identical provisions for rebates and market assessments. Both bills propose to
revamp the DOE-EPA Energy Star Program. Each would require periodic updates of product
eligibility criteria (every three years) and assessments of product compliance with criteria.55 As
points of difference, the Senate bill would call for an update of the cooperative agreement
between the two agencies, while the House bill would seek an update of the rating system. Also,
54
Prepared by (name redacted), 7-...., [redacted]@crs.loc.gov.
Those provisions address a concern that technological improvements gradually erode the relative energy efficiency
of products identified with the EPA Energy Star label.
55
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Summary and Analysis of S. 1462: American Clean Energy Leadership Act of 2009
the Senate bill calls for DOE to assume responsibility to implement an Energy Star program for
solid state lighting equipment.
Five provisions in the Senate Committee bill do not appear in the House bill, of which two
involve the standards-setting process and three call for studies. Regarding the standards process,
the Senate Committee bill would establish a petition process to prescribe or amend test
procedures for consumer and industrial products56 and a 180-day response period for DOE to
address any petition that seeks a rulemaking to amend an efficiency standard.57 One proposed
study calls for DOE and EPA to assess the feasibility of establishing a new “Energy Superstar”
designation for products and buildings that make up about 5% of the most efficient products in a
market. 58 A second study would examine the degree of compliance with energy-efficiency
standards for appliances.59 The third study would analyze the potential costs and benefits of
requiring certain buildings to use high-quality direct current electricity instead of alternating
current.60
Eleven provisions for appliance efficiency appear in the House bill, but do not appear in the
Senate Committee bill. One of those provisions would revise the criteria for prescribing new or
amended efficiency standards to include the estimated value of reduced emissions of carbon
dioxide and other greenhouse gases.61 The proposed criteria would require that the carbon output
of each covered product be included on the mandatory EnergyGuide labels. Such a change in
criteria would mark a major shift in the concept of appliance efficiency from being based solely
on energy use to binding energy use and carbon displacement into a single metric.
Another House provision would establish incentives for manufacture and sale of “best-in-class”
appliances. 62 Retailers would be rewarded with bonuses for increasing sales of highly (upper
10%) efficient building equipment, consumer electronics, and household appliances. Bounties
would be established for retailers that replace and recycle inefficient appliances. Also, a bonus
program would be created for manufacturers that develop new “superefficient best-in-class”
products.
The other nine appliance provisions found only in the House bill include five that would legislate
efficiency standards and four that would create programs or incentives. Two lighting standards
would be set: one for outdoor luminaires and one for outdoor high-output lamps.63 Three
additional equipment standards would be set for water dispensers, portable electric spas, and
commercial hot food holding cabinets.64 Three water efficiency programs would be established: a
Watersense program at EPA, a federal procurement program for water-efficient products, and an
early adopter program for water efficiency incentives. 65 A residential wood stoves program would
56
The provision for test procedures appears in Sec. 221 of the Senate bill.
The provision for amending standards appears in Sec. 223 of the Senate bill.
58
The Superstar provision appears in Sec. 232 of the Senate bill.
59
The compliance provision appears in Sec. 229 of the Senate bill.
60
The direct current provision appears in Sec. 230 of the Senate bill.
61
The carbon standard provision appears in Sec. 213 of the House bill.
62
The “best-in-class” provision appears in Sec. 214 of the House bill.
63
Both outdoor lighting provisions appear in Sec. 211(a) of the House bill.
64
All three equipment standards provisions appear in Sec. 212 of the House bill.
65
The water efficiency provisions appear, respectively, in Secs. 215, 216, and 217 of the House bill.
57
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be established to certify air pollution controls and provide incentives for replacing inefficient
stoves.66
Related Spending Provisions in the American Recovery and Reinvestment Act of
2009 (P.L. 111-5)
ARRA appropriated $300 million to EPA to support a program to provide consumers with rebates
to buy energy-efficient Energy Star products to replace old appliances and help lower energy
bills. The program was authorized by EPACT05 (Sec. 124), which directed DOE to fund rebate
programs in eligible states to support residential end-user purchases of Energy Star products.
Subtitle C—Building Efficiency67
Summary and Analysis of This Subtitle
Building energy efficiency would be improved through updates in national model building energy
codes for new construction, establishment of grant and finance programs, strengthening of certain
requirements for federal agency energy use, creation of a voluntary energy performance
information program, and establishment of a residential high performance zero-net-energy
buildings initiative.
Achieving energy-efficiency improvements in a building is a much more complex undertaking
than, for example, improving efficiency in an appliance.68 The array of critical barriers to
improving energy efficiency in buildings has been well documented.69 In particular, the regional
nature of building codes (e.g. houses in Minneapolis need more insulation than houses in Los
Angeles) and other factors have made it impractical to set a single national building energy code.
Instead, DOE has used its analytic capacity to develop model energy codes for residential and
commercial buildings that states can adopt and adapt to local circumstances. The Senate Energy
Committee bill would revamp the current model code processes, require regular future updates to
the model codes, and provide incentives to states to employ the codes or equivalent alternatives.
The bill also authorizes grants, financial support, and other initiatives to encourage improved
efficiency in buildings.
Comparison to Similar Provisions in H.R. 2454, American Clean Energy and
Security Act of 2009
The two bills have several provisions that are similar and, in some cases, nearly identical. The
Senate Committee bill’s proposal to establish a program of updates in the national model building
energy code is very similar to a provision in the House bill. 70 DOE would be required to update
66
The provision for wood stoves appears in Sec. 218 of the House bill.
Prepared by (name redacted), 7-...., [redacted]@crs.loc.gov.
68
Recent developments of industry guidelines for “green building” construction and renovation have helped spur
interest in advancing building energy efficiency codes.
69
For a discussion of barriers, see CRS Report R40670, Energy Efficiency in Buildings: Critical Barriers and
Congressional Policy, by (name redacted), (name redacted), and (name redacted).
70
The provisions appear in Sec. 241 of the Senate bill and Sec. 201 of the House bill.
67
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Summary and Analysis of S. 1462: American Clean Energy Leadership Act of 2009
the residential and commercial codes every three years. For future updates, the target for
nationwide energy savings would be set 30% higher than the baseline for updates in and after
2010, and then would rise to 50% for updates after January 1, 2016. All model code updates
would be coordinated with updates of specified industry standards. Federal training and funding
assistance would be available to states that adopt advanced building efficiency codes. States
would be required to certify their code updates and code compliance with DOE. Overall, the
Senate Committee and House building energy code provisions are similar, with some minor
differences in timetables and administrative procedures. One difference is that the Senate bill
would authorize appropriations of $100 million per year for five years, while the House bill
would authorize such sums as necessary and provide funding from the auction of a share of
allowances derived from a cap-and-trade program.
The Senate Committee bill’s proposal to establish a program for the retrofit of existing buildings
has several similarities to provisions in the House bill.71 Both bills would direct EPA to establish a
broad program of criteria and financial support for residential buildings and direct DOE to
establish a parallel program for commercial buildings. There are some differences in the energy
performance criteria and the structure of the financial assistance mechanisms, but the provisions
are otherwise quite similar.
Four other policies and programs proposed in the Senate bill have nearly identical companions in
the House bill: national energy-efficiency goals,72 building and training and assessment centers,73
energy savings performance contracts (ESPCs) for federal agencies,74 and an implementation
strategy for federal agency use of energy-efficient information and communication
technologies.75 Regarding a fifth policy for manufactured housing, the two bills have an identical
provision for a low-income rebate, but the Senate bill includes additional provisions for
innovation in manufactured and multifamily housing.76
Eight provisions in the Senate Committee bill do not appear in the House bill. A potentially major
provision would establish a zero-net-energy initiative for residential buildings.77 The goal is to
reduce overall energy use while increasing the share of onsite renewable energy. Nearly $1 billion
would be authorized over 11 years to support pilot programs, technical assistance, and other
means to address the split incentives market failure,78 technological challenges, and other barriers.
71
The provisions appear in Secs. 262 and 266 of the Senate bill and Sec. 202 of the House bill.
The proposed goals appear in Sec. 275 of the Senate bill and Sec. 272 of the House bill.
73
The proposed centers appear in Sec. 243 of the Senate bill and Sec. 173 of the House bill.
74
The ESPC proposals appear in Sec. 272 of the Senate bill and Sec. 251 of the House bill.
75
The communication technology strategies appear in Sec. 277 of the Senate bill and Sec. 271 of the House bill.
76
The manufactured housing provisions appear in Sec. 242 of the Senate bill and Sec. 203 of the House bill.
77
Sec. 291 of the Senate bill.
72
78
Misplaced, or split, incentives are transactions or exchanges in which the economic benefits of energy efficiency
conservation do not accrue to the person who is trying to achieve energy savings. The terms have been used to describe
certain classes of relationships, primarily in the real estate industry between landlords and tenants with respect to
acquisition of energy-efficient equipment for rental property. When the tenant is responsible for the energy/utility bills,
it is in the landlord’s interest to provide least-first-cost equipment rather than more efficient equipment for a given level
of desired service. There is relatively little incentive for the landlord to increase his or her own expense to acquire
efficient equipment (e.g., refrigerators, heaters, and light bulbs) because the landlord does not bear the burden of the
operating costs and will not reap the benefits of reducing those costs. This misplaced incentive is believed to extend to
the commercial sector; however, most of the literature on misplaced incentives focuses on the residential sector. See
William H. Golove and Joseph H. Eto. Market Barriers to Energy Efficiency: A Critical Reappraisal of the Rationale
for Public Policies to Promote Energy Efficiency. DOE. Lawrence Berkeley National Laboratory, 1996.
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Three provisions (purchasing requirement, funding flexibility, and agency incentives) would
address federal energy efficiency and renewable energy opportunities. 79 Two provisions (energy
performance information and evaluation/verification assessments) would aim to improve the
ability to monitor increases in building energy efficiency and the cost-effectiveness of programs.80
Also, the Senate Energy Committee bill would reauthorize the DOE Weatherization and State
Energy programs for FY2011 through FY2015.81 The Weatherization Program would be
authorized $1.7 billion per year and the State Energy Program would be authorized $250 million
per year.
Several provisions in the House bill do not appear in the Senate Committee bill. In particular, 28
provisions make up a subtitle of the House bill entitled “Green Resources for Energy Efficient
Neighborhoods.” The provisions focus mainly on establishing a variety of programs, projects,
standards, and incentives to support programs for energy-efficient mortgages and for selected
programs at the Department of Housing and Urban Development (HUD). There are no similar
provisions in the Senate bill.
One House provision would direct EPA to establish a building energy performance labeling
program that would apply broadly to residential and commercial building markets.82 The goal is
to encourage owners and occupants to reduce energy use. EPA is required to consider existing
programs, such as the Home Energy Rating System and DOE programs. Also, EPA is required to
develop model performance labels for residential and commercial buildings and to use incentives
and other means to spur the use of labels by public and private sector buildings. There is no
similar provision in the Senate bill.
Eight other assorted provisions of the House bill cover tree planting programs, energy efficiency
in data centers, solar energy building permits, residential solar equipment installations,
community energy-efficiency flexibility, small community joint participation, low-income
community energy efficiency, and consumer behavior research. 83 There are no similar provisions
in the Senate bill.
Related Spending Provisions in the American Recovery and Reinvestment Act of
2009 (P.L. 111-5)
ARRA provided $5.0 billion for the DOE Weatherization Program, $3.1 billion for the DOE State
Energy Program, and $3.2 billion for the DOE Energy Efficiency Block Grant program. Under
the appropriation for DOE’s Office of Energy Efficiency and Renewable Energy, the ARRA
conference report (H.Rept. 111-16) included a carveout appropriation of $50.0 million for R&D
on the energy efficiency of information and communication technologies. In the federal buildings
sector, ARRA provided $4.5 billion to the General Services Administration to support a program
of high performance green buildings in federal agencies. Certain appropriations for other agencies
79
The federal provisions appear in Secs. 271, 273, and 278.
The information provision appears in Sec. 281 and the evaluation/verification provision appears in Sec. 282.
81
The Weatherization provision appears in sec. 251 and the State Energy Program provision appears in Sec. 255.
82
The provision appears in Sec. 204 of the House bill.
83
The provisions appear, respectively, in Secs. 205, 206, 208, 209, 262, 263, 264, and 265.
80
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Summary and Analysis of S. 1462: American Clean Energy Leadership Act of 2009
were targeted for building construction and other activities that could include building energyefficiency measures. 84
Subtitle D—Electric Grid85
Summary and Analysis of This Subtitle
Although this part of the bill is titled “Electric Grid,” the actual focus of Subtitle D is peak
demand management. Peak demands on an electric system—that is, the periods when demand is
at its highest—tend to be short lived, but account for a disproportionate share of total system
capacity and costs. Reducing peak demand, and improving the system load factor (i.e., the ratio
between average and peak demand), can yield substantial cost savings.
Sec. 295 of the subtitle would establish a national policy for continuously improving load factors
on electric power systems through 2030, and directs the Secretary of Energy to lead a combined
government and industry effort to develop an action plan to achieve this goal. The plan is to be
updated triennially and DOE is to make concurrent progress reports to Congress. However, the
bill does not create (with the one exception discussed below) any new executive authority or legal
requirements on utility systems that would mandate adoption of the action plan.
One of the approaches that can be used to reduce peak demand on a utility system is more use of
generation located at a customer site, often referred to as “distributed generation.” Sec. 296 of this
subtitle would amend the Public Utility Regulatory Policies Act of 1978 to require the state
regulatory authorities that oversee utilities, and self-regulating utilities (like many municipal
systems) to consider adopting rules that would facilitate connecting small distributed generation
sources to the power grid. 86
Comparison to Similar Provisions in H.R. 2454, American Clean Energy and
Security Act of 2009
ACES includes in Title I, Subtitle E, Sec. 144, a provision requiring utilities to establish peak
demand reduction goals for 2012 and 2015. There is no penalty that applies if a utility fails to
meet its goal.
Related Spending Provisions in the American Recovery and Reinvestment Act of
2009 (P.L. 111-5)
ARRA includes numerous provisions related to funding energy efficiency. See CRS Report
R40412, Energy Provisions in the American Recovery and Reinvestment Act of 2009 (P.L. 111-5),
coordinated by (name redacted).
84
For more about those appropriations, see CRS Report R40412, Energy Provisions in the American Recovery and
Reinvestment Act of 2009 (P.L. 111-5), coordinated by (name redacted).
85
Prepared by Stan Kaplan, 7-...., [redacted]@crs.loc.gov.
86
The limit is initially 15 kilowatts of capacity with a possible adjustment in the future such that the rules would apply
to customer-owned generation with a capacity of up to 50 kilowatts. These are very small units. By way of comparison,
a small power plant would might have a capacity of 100,000 kilowatts.
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Summary and Analysis of S. 1462: American Clean Energy Leadership Act of 2009
Title III—Improved Energy Security
Subtitle A—Cyber Security of the Electric Transmission Grid87
Summary and Analysis of This Subtitle
This subtitle would give executive agencies new emergency authority to direct “any entity that
owns, controls, or operates critical electric [power system] infrastructure” to take steps to block a
cyber security “threat” or “vulnerability.”
•
A “cyber security threat” is imminent danger of a cyber attack on critical electric
infrastructure. The Secretary of Energy would have authority to issue emergency
orders to block such a threat.
•
A “cyber security vulnerability” is a security weakness that exposes critical
electric infrastructure to a cyber security threat. The Federal Energy Regulatory
Commission would have authority to issue emergency orders to resolve such a
vulnerability.
Reflecting the assumptions that cyber-security attacks on the electric power system could develop
rapidly and be exceptionally dangerous to national security, prior notice is not required for such
orders, and consultation with other agencies or industry is only required to the extent practicable.
The Secretary of Energy is encouraged to consult and coordinate with appropriate officials in
Canada and Mexico. Emergency orders by FERC or the Secretary would terminate after 90 days
unless within the 90-day period FERC provides an opportunity for written comment and decides
to affirm the order. No open hearing is required, and it appears that if the emergency measure is
affirmed during the initial 90-day period it can continue indefinitely.
This provision would apply throughout the contiguous states. In the case of Alaska, Hawaii, and
Guam, the Secretary of Defense (in consultation with DOE, the states, the territory, and industry)
is to prepare a comprehensive plan defining the measures to be taken to protect the electric power
supply to national defense installations in those areas from an imminent cyber security threat.
There are no similar provisions in the House-passed bill or in ARRA.
Subtitle B—Nuclear Energy88
Summary and Analysis of This Subtitle
In response to the Obama Administration’s proposal to abandon the planned national nuclear
waste repository at Yucca Mountain, NV, this subtitle would establish a National Commission on
Nuclear Waste to make recommendations to Congress on alternative waste management
strategies. The commission would consist of 11 members appointed by the President who are
87
88
Prepared by Stan Kaplan, 7-...., [redacted]@crs.loc.gov.
Prepared by (name redacted), 7-...., [redacted]@crs.loc.gov.
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Summary and Analysis of S. 1462: American Clean Energy Leadership Act of 2009
prominent in professions relevant to nuclear waste policy and who “shall be fairly balanced in
terms of the points of view represented.” Federal or state employees would not be eligible.
Alternative waste management strategies to be studied by the commission include deep geologic
repositories, such as Yucca Mountain, long-term waste storage at nuclear power plants and other
existing sites, regional storage facilities, and waste reprocessing and recycling technologies. The
commission would also be required to analyze previous DOE efforts to develop nuclear waste
sites, recommend financial incentives to potential host states and localities, and study alternative
approaches to administering and financing the program.
The nuclear waste commission provisions in this subtitle would provide congressional direction
to the Administration’s proposed “blue ribbon” nuclear waste advisory panel included in the
FY2010 DOE budget request. The budget request would eliminate further planning and
development of the Yucca Mountain repository, but it would continue funding for consideration
of the repository license application that is currently before the Nuclear Regulatory Commission.
The House included $5 million for the Administration’s blue ribbon panel in its version of the
FY2010 Energy and Water Development Appropriations Bill (H.R. 3183). However, the Housepassed bill specifies that the blue ribbon panel must “consider all alternatives for nuclear waste
disposal,” including Yucca Mountain, which the Administration wants to terminate. The Senatepassed version of the appropriations bill approves the full budget request but does not include any
language on the proposed commission.
This subtitle of S. 1462 also includes a “sense of Congress” finding on the importance of nuclear
energy and additional requirements for research and development of “an integrated, proliferationresistant, spent nuclear fuel recycling or transmutation process.”
No provisions in this subtitle are similar to any provisions in H.R. 2454, nor to any spending
provisions in ARRA.
Subtitle C—Improving United States Strategic Reserves89
Summary and Analysis of This Subtitle
The Strategic Petroleum Reserve (SPR) comprises five underground storage facilities, hollowed
out from naturally occurring salt domes in Texas and Louisiana. It is currently filled with crude
oil to near its capacity of 727 million barrels. In the event that it is tapped, 4.4 million barrels can
be drawn down initially, and enter into markets within about two weeks. The Energy Policy and
Conservation Act (P.L. 94-163) authorized drawdown of the Reserve upon a finding by the
President that there is a “severe energy supply interruption.” Congress enacted additional
authority in 1990 (Energy Policy and Conservation Act Amendments of 1990, P.L. 101-383), to
permit use of the SPR for short periods to resolve supply interruptions stemming from situations
internal to the United States.
The Senate legislation would make three major changes to the SPR program. It (1) would require
that the SPR include 30 million barrels of refined product; (2) would transfer authority for a
drawdown from the President to the Secretary of Energy; and (3) would amend the drawdown
89
Prepared by Rob Bamberger, 7-...., [redacted]@crs.loc.gov.
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Summary and Analysis of S. 1462: American Clean Energy Leadership Act of 2009
authority to permit drawdown and sale in the event of a “severe energy market supply
interruption” that has caused, or is expected to cause, “a severe increase” in prices.
The proposal to establish product reserves very likely stems from the sharp increase in the price
of gasoline during 2008 that was attributed, in part, to a different market situation than has been
the historic norm. In the past, inadequate supplies of refined products have had, as their principal
cause, a shortage in crude supply, or uncertainty about crude supply that becomes reflected in
market distribution. However, high prices in 2008 occurred in a setting where the supply of
product was tight in some regions, even though crude itself was plentiful. Drawdown of the SPR
is currently premised on crude oil supply, and not product supply or price.
The Senate report on the bill does not provide an explanation for the vesting of authority for a
drawdown with the Secretary of Energy rather than the President. Some may believe that the
Secretary might be inclined to call for a drawdown sooner than the President because the
Secretary presumably has closer contact on energy-supply developments, or that a decision by the
Secretary to call upon the SPR would be less freighted with political considerations. However, the
reason for the change is unspecified.
The proposal to shift from premising drawdown on a “severe energy market supply interruption”
instead of a “severe energy supply interruption” may be the most sweeping shift in the Senate bill
provisions affecting the SPR. As has been noted, the current authorities authorize drawdown
based upon crude supply. While a shortage of crude generally expresses itself in higher prices for
both crude and products, many calls for tapping of the SPR when prices have spiked have brought
the response that the SPR is not supposed to be used to respond to high prices. The Senate
Committee bill’s proposed change, if enacted, adds language permitting a drawdown of SPR oil if
a “market supply interruption” has brought about high prices, or is expected to do so. Expressed
another way, a drawdown can be initiated not just to respond to supply conditions “upstream” or
“downstream,” but to supply and price conditions.
If enacted, the legislation would require a report to Congress within 180 days describing what
refined products would be acquired for the Reserve and how they would be acquired at minimal
cost or disruption of markets. The report would be required to assess storage options (which
would need to be above-ground) and “the anticipated location of existing or new facilities.”
Presumably, some analysis would need to be undertaken to identify regions that might be likeliest
affected by incapacitation of normal product distribution, as well as seasonal differences in the
refined product itself.
No similar provisions are included in H.R. 2454 or ARRA.
Subtitle D—Federal Oil and Gas Development90
Summary and Analysis of This Subtitle
Congress is currently debating how much of the outer continental shelf (OCS) should be open for
oil and gas development. Opening up the OCS is seen by some as a way to increase domestic
90
Prepared by (name redacted), 7-...., [redacted]@crs.loc.gov, and (name redacted), 7-....,
[redacted]@crs.loc.gov.
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supply and improve U.S. energy security; others contend that OCS development has risks for the
coastal environment and coastal communities, and that other options are available for energy
security. The Gulf of Mexico Energy Security Act of 2006 (GOMESA, P.L. 109-432) placed
nearly all of the eastern Gulf of Mexico under a leasing and drilling moratorium until 2022 but
allowed leasing in designated portions of the eastern Gulf.
This subtitle would amend GOMESA to open the eastern Gulf of Mexico (EGoM) beyond 45
miles of Florida’s coastline but also would open an area known as the Destin Dome, where there
are existing leases located 25-30 miles offshore northwest Florida. Destin Dome leases are
currently suspended until 2022 under GOMESA. All other areas within 45 miles of Florida’s
coastline in the EGoM would be remain under a moratorium until 2022.
The Minerals Management Service (MMS) conducts assessments of undiscovered technically
recoverable resources (UTRR) on the U.S. OCS. The statistical certainty of these assessment
estimates varies by region because of wide variations in the availability of geologic data. For
example, the extensive exploration and production histories of the central and western Gulf of
Mexico and southern California provide a comparatively greater amount of geologic data to use
for assessments. In contrast, much of the remainder of the U.S. OCS has seen little exploration
and production of oil and gas. Therefore, estimates of UTRR along the Atlantic Coast, much of
the Pacific Coast, and coastal Alaska carry significant uncertainties.
To address the concerns over resource inventory uncertainty, this subtitle would amend Sec. 357
of EPACT05 and require a seismic inventory (using 2-D and 3-D seismic technology) of the oil
and gas resources in the Atlantic, eastern Gulf of Mexico and Alaska regions of the OCS. A report
from the Secretary of the Interior to Congress on the implementation (including an estimate of the
costs) of the seismic inventory would be required. Funding would be authorized to carry out the
inventory at $100 million each year for fiscal years 2010-2015 and $50 million each year for
years 2016-2020.
The subtitle would also repeal royalty relief for shallow water deep gas and for deepwater oil and
gas enacted under EPACT05 (Secs. 344 and 345), would require that the Director of the MMS be
confirmed by the Senate, and would provide that, under certain terms and conditions, a highpressure natural gas pipeline may be permitted by the Secretary of the Interior in specified nonwilderness areas within Denali National Park. This subtitle would amend the Trans-Alaska
Pipeline Authorization Act (43 U.S.C. 1651 et seq.) to exempt the trans-Alaska pipeline from
certain requirements, establish an Alaskan Office for OCS permit processing, and provide for the
production of geothermal energy on oil and gas leases.
Currently, EISA Sec. 526 prohibits federal agencies from procuring alternative, synthetic, or
nonconventional petroleum-based transportation fuels without contract provisions that limit the
fuel’s lifecycle greenhouse gases emission to those of equivalent conventional petroleum-based
fuels. This provision has been interpreted as blocking federal purchases of oil-sand-derived
petroleum imports from Canada, which have been a growing segment of U.S. fuel supplies. Sec.
356 of the Senate Committee bill would exempt federal purchases of oil-sand-derived fuel from
the EISA requirement if such fuel were included in a general fuel contract that did not specifically
call for unconventional fuel.
No similar provisions are included in H.R. 2454 or ARRA.
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E—Public Land Renewable Energy Deployment91
Summary and Analysis of This Subtitle
This subtitle would establish Pilot Project Field Offices throughout the western United States and
Alaska to improve federal permit coordination for renewable energy projects. The federal share of
royalties from wind or solar energy production would be deposited in a special Treasury fund to
be known as the “BLM Wind and Solar Energy Permit Processing Improvement Fund.” A
programmatic environmental impact statement (PEIS) would be required for solar power on
public lands within one year, and a PEIS would be required for solar and wind power on National
Forest Service land within 18 months of enactment of this legislation.
A study would be conducted by the National Academy of Sciences on the siting, development,
and management of projects for the production of wind and solar energy. Matters to be addressed
in the study would include the effectiveness of current laws and policies, the advantages and
disadvantages of using rights of way (ROW) for wind and solar development, and the potential
advantages and disadvantages of using a competitive or noncompetitive leasing system for wind
and solar development. Also, the Secretary of the Interior would be required to establish a wind
and solar leasing pilot program. The Secretary would make a determination not later than 30
months after the enactment of this legislation on whether to implement a leasing program for
solar and wind power on public land.
Development of renewable energy such as solar and wind is currently governed by right-of-way
authorities under Title V of the Federal Land Policy and Management Act of 1976 (FLPMA; 43
U.S.C. §§1761-1771). Some renewable energy advocates have argued that the current right-ofway regulations are insufficient for large-scale development of solar and wind power projects and
associated electricity transmission lines (consisting of potentially thousands of acres). The extent
of some of the environmental impacts of renewable energy production has been controversial,
such as impacts on wildlife and on environmentally sensitive areas. Some have suggested that a
leasing system would provide for better planning during the resource management planning
(RMP) process for public land use and provide greater security of tenure for the potential wind or
solar energy lessee. Others counter that a leasing system may not offer anything different from a
ROW system.
For wind energy facilities on BLM lands, the BLM completed a final PEIS in January 2006.92
This document supports land management plan amendments providing for wind energy
development in the western states. On December 19, 2008, BLM issued its updated wind energy
development policy. The BLM has authorized 206 rights-of-way for the development of wind on
public land.
An updated solar energy development policy was published by the BLM on April 4, 2007. The
agency continues to collaborate with DOE to prepare a PEIS to evaluate solar energy
development on public lands, among other matters. A PEIS scoping report was completed in
October 2008. On March 11, 2009, Interior Secretary Ken Salazar issued a Secretarial Order
(3285) to make renewable energy a top priority of DOI. The order also established a
91
92
Prepared by (name redacted), 7-...., [redacted]@crs.loc.gov.
71 Fed. Reg. 1768 (Jan. 11, 2006).
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Departmental Task Force on Energy and Climate Change to identify zones on public land suitable
for large-scale renewable energy development.93 On June 30, 2009, the DOI and DOE announced
the extension of the public comment period on solar energy in preparation of the PEIS to
September 14, 2009, the opening of new solar permitting offices, and the availability of solar
energy study area maps. There are 158 active solar project applications covering about 1.8 million
acres of federal land.
Geothermal leasing on federal lands is conducted under the authority of the Geothermal Steam
Act of 1970, as amended (30 U.S.C. §§1001-1028). Much of the nation’s geothermal energy
potential is located on federal lands. Increasing geothermal production on federal lands while
mitigating environmental impacts has been a long-time policy issue. The BLM administers more
than 500 geothermal leases, with 29 operating geothermal power plants having a total electric
generation capacity of 1,275 megawatts (equivalent to a large nuclear power plant). 94 This subtitle
would extend funding for implementation of the Geothermal Steam Act of 1970 through FY2020.
No similar provisions are included in H.R. 2454 or ARRA.
Subtitle F—Carbon Capture95
Summary and Analysis of This Subtitle
Subtitle F, Sec. 371 would amend EPACT05 to authorize the Secretary of Energy to enter into
cooperative agreements to provide financial and technical assistance for as many as 10 projects to
demonstrate large-scale integrated capture, transportation, and sequestration (also referred to as
CCS) of carbon dioxide (CO2) from industrial sources. The demonstration projects would focus
on the sequestration stage of CCS to foster the commercial application of long-term geologic
storage of CO2, rather than on the capture stage of CCS and the development of carbon-capture
technology.
To qualify for selection in a competitive process, the applicants would need to meet several
requirements under Sec. 371, including:
•
providing sufficient geological site information to establish that the proposed site
is capable of long-term storage;
•
possessing the land or interests in the land necessary for injection, storage,
closure, and long-term stewardship of the geologic storage unit;
•
possessing or having the reasonable expectation of obtaining all necessary
permits and authorizations under federal and state laws and regulation; and
•
agreeing to comply with a list of terms and conditions to ensure that the project
complies with all requirements for constructing and operating injection wells,
93
The Secretarial Order and a related agency news release are on the BLM website at http://www.doi.gov/news/
09_News_Releases/031109c.html.
94
U.S. Dept. of the Interior, Kempthorne Launches Initiative to Spur Geothermal Energy and Power Generation on
Federal Lands, News Release, October 22, 2008, http://www.doi.gov/news/08_News_Releases/102208b.html.
95
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Summary and Analysis of S. 1462: American Clean Energy Leadership Act of 2009
measuring and monitoring the CO2 plume underground, plugging the wells, and
meeting long-term care requirements for the site after injection has ceased.
A particular focus of Sec. 371 is on financial assurances provided by the operator during the
injection, closure, and post-closure activities, and on indemnification offered by the Secretary of
Energy for liability arising from a project in excess of liability covered by financial assurances
maintained by the operator. First, the operator would need to maintain financial assurances during
the post-injection closure and monitoring phase until the site is certified as closed by the
Secretary. Second, the operator would need to maintain financial protection in a form and amount
acceptable to the Secretary of Energy, to the Secretary (either of the Interior or of Agriculture)
with jurisdiction over the land, and to the EPA Administrator. These assurances must be
maintained until the project complies with site closure requirements over a period of at least 10
consecutive years after the plume of CO2 has stabilized within the geologic storage unit after
injection has ceased.
The legislation would require the operator to meet all the post-closure requirements, and maintain
the financial assurances and protection, such as insurance, before the federal government would
accept title and long-term stewardship responsibilities for the site. The post-closure requirements
essentially ensure that the CO2 plume and area of elevated pressure in the underground reservoir
have ceased to change (e.g., the plume is no longer spreading, and the pressure in the formation is
no longer increasing); CO2 or displaced formation fluid is not leaking out of the reservoir and
endangering underground sources of drinking water; and CO2 or formation fluids are not expected
to leak out of the reservoir in the future. Subject to the operator successfully meeting these
requirements, the federal government may take title to the land or interest in the land necessary
for monitoring, remediation, or long-term stewardship of the project site.
In addition to financial assurances provided by the operator, the legislation would authorize the
Secretary of Energy to indemnify the operator from liability arising from a demonstration project
that is in excess of the liability covered by the financial assurances and protections held by the
operator. The legislation would authorize up to $10 billion of indemnification per project, but
would not indemnify the operator from liability arising out of gross negligence or intentional
misconduct. The Secretary would be authorized to collect a fee from the recipient of the
indemnification agreement, in an amount equal to the net present value of payments made by the
United States to cover liability under the indemnification agreement. The criteria for determining
the amount of the fee would be established by regulation, taking into account the risk of an
incident resulting in liability and other factors related to determining the hazard of operating a
particular project.
The indemnification provision in the legislation is likely intended to address one of the perceived
barriers to commercial-scale deployment of CCS: the risk and magnitude of liability from
injecting CO2 underground in a regulatory environment that is still a work in progress. Also, it is
widely perceived that many of the fears and uncertainties associated with injecting industrialscale quantities of CO2 could be addressed by on-the-ground projects instead of theoretical
modeling simulations—a learning-by-doing approach. Providing liability protection for the CCS
demonstration phase could stimulate “early movers” to advance their projects.
Sec. 372 would authorize the Secretary of Energy, the Secretary of Transportation, and the EPA
Administrator to establish a grant program for employee training at state agencies involved in
permitting, management, inspection, and oversight of CCS projects. The section would authorize
$10 million per year from FY2010 through FY2020.
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Summary and Analysis of S. 1462: American Clean Energy Leadership Act of 2009
Comparison to Similar Provisions in H.R. 2454, American Clean Energy and
Security Act of 2009
Sec. 114 of H.R. 2454 would establish a program to award grants, contracts, and assistance to
support commercial-scale CCS demonstration projects at new plants or at plants retrofitted with
carbon capture technology. The legislation would seek to support at least five commercial-scale
demonstration projects over a 10-year period. In contrast to Sec. 371 of S. 1462, which would
authorize cooperative agreements with the Secretary of Energy and funding from DOE, funding
for CCS demonstration projects under Sec. 114 of H.R. 2454 would be provided through a
corporation established by referendum among “qualified industry organizations.” Also, funding
for the demonstration projects under H.R. 2454 would come from an assessment on distribution
utilities for fossil-fuel based electricity delivered to retail customers. Funding for demonstration
projects under Sec. 371 of S. 1462 would presumably come from annual appropriations.
Another key difference is the emphasis in S. 1462 on the long-term storage component of CCS, as
suggested by the provision providing for indemnification from liability and from the detailed
requirements for injection, storage, closure, and post-closure, and the provision for assuming title
and long-term stewardship by the federal government. Subtitle B of H.R. 2454—Carbon Capture
and Sequestration—does not include similar provisions for indemnification, although Sec. 111 of
Subtitle B calls for a report detailing a comprehensive strategy to identify key legal and
regulatory barriers to commercial-scale deployment of CCS. Sec. 112 of Subtitle B in H.R. 2454
would amend the Clean Air Act to establish a certification and permitting process for CCS, and
would require the EPA Administrator to promulgate regulations for CCS under the Safe Drinking
Water Act, but neither provision discusses long-term liability, indemnification, or transfer of title
and long-term stewardship of a project site to the federal government.
Lastly, Sec. 115 of H.R. 2454 would provide a financial mechanism for funding and deploying
commercial-scale CCS technologies by distributing emission allowances under the cap-and-trade
provisions to be used for CCS. In contrast, S. 1462 is limited only to demonstration projects and
does not include revenues or allowances from a cap-and-trade program to support the projects.
Related Spending Provisions in the American Recovery and Reinvestment Act of
2009 (P.L. 111-5)
Of the $3.4 billion made available for CCS-related activities in ARRA, $50 million is available
for site characterization activities in geologic formations. Site characterization would be an
important factor in qualifying an applicant to receive funding and technical assistance for a
demonstration project under Sec. 371 of S. 1462. Presumably the site characterization
information garnered from activities funded with the $50 million in funding from ARRA would
be made available to interested applicants to help them determine whether the proposed site
would be capable of long-term geologic storage of CO2.
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Summary and Analysis of S. 1462: American Clean Energy Leadership Act of 2009
Subtitle G—Island Energy96
Summary and Analysis of This Subtitle
DOE would be directed to establish a team of technical, policy, and financial experts to address
the energy needs of each affiliated island (U.S. trust territory). DOE would be required to
consider including representatives of regional utility organizations on the team. The team would
be directed to provide technical, programmatic, and financial assistance to each island utility and
government to develop and implement an energy action plan. Each plan would identify and
implement the most cost-effective strategies to reduce dependence on fossil fuels, promote
capacity development through education and training, and develop private-public partnerships.
Starting one year after enactment, biannual reports to DOE would be required. Such sums as may
be needed would be authorized.
DOE has previously provided energy resource assessments and planning assistance to island
(U.S. trust territory) governments.97 This provision would require that DOE provide a new round
of planning and implementation assistance.
Comparison to Similar Provisions in H.R. 2454, American Clean Energy and
Security Act of 2009
The two bills have an identical provision. 98
Related Spending Provisions in the American Recovery and Reinvestment Act of
2009 (P.L. 111-5)
ARRA explicitly makes funding available to the U.S. trust territories for certain programs that
might be able to contribute to the goals for reducing dependence on imported fossil fuels. In
particular, funds were made available under the provisions for Department of Defense facilities,
the DOE Weatherization Program, and the DOE State Energy Program.99
96
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97
For additional background, see U.S. Congress. House. Committee on Interior and Insular Affairs. Energy planning
and implementation in the U.S. insular areas: problems and policy options; together with the proceedings of the
“Conference on Energy Planning and Implementation in the U.S. Insular Areas,” May 1983. Committee Print No. 5,
May 1984. 634 p.
98
The provision appears in section 381 of the Senate bill and in Sec. 273 of the House bill.
99
The funding for those programs is discussed in CRS Report R40412, Energy Provisions in the American Recovery
and Reinvestment Act of 2009 (P.L. 111-5), coordinated by (name redacted)
.
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Summary and Analysis of S. 1462: American Clean Energy Leadership Act of 2009
Title IV—Energy Innovation And Workforce
Development
Subtitle A—Funding100
Summary and Analysis of This Subtitle
The purpose of this subtitle is to extend authorization for funding in the Department of Energy for
research, development, demonstration, and commercial application activities established under
Title IX of EPACT05. Authorization for funding for energy efficiency, distributed energy and
electric energy systems and renewable energy would start at $2.0 billion for FY2010 and
increases to $3.3 billion in FY2013. Authorization for nuclear energy would increase from $998
million in FY2010 to $1.6 billion in FY2013. Authorization for fossil energy would increase from
$1.1 billion in FY2010 to $1.7 billion in FY2013. Authorization for the Office of Science would
increase from $5.8 billion in FY2010 to $8.0 billion in FY2013. Total authorization for these four
activities would be $14.6 billion in FY2013, compared to a total authorization of $7.3 billion for
FY2009 under the Energy Policy Act of 2005, precisely doubling the authorization for these
activities over four years.
The American Recovery and Reinvestment Act of 2009 (P.L. 111-5) provided $1.6 billion for the
Office of Science without specifying how the appropriation should be spent. Appropriations were
included in ARRA for the Office of Energy Efficiency and Renewable Energy ($16.8 billion), and
for the Office of Fossil Energy ($3.4 billion), but those amounts were allocated for specific
purposes.
Subtitle B—Grand Energy Challenges Research Initiative101
Summary and Analysis of This Subtitle
This subtitle would establish a new initiative within DOE to accelerate solutions to “grand energy
challenges” by undertaking large-scale, multidisciplinary activities that include basic, applied,
and engineering sciences, technology development, and other relevant disciplines. The grand
energy challenges addressed by this initiative would include those described in the DOE Basic
Research Needs Workshops, those described in two reports of the DOE Basic Energy Sciences
Advisory Committee, and those described by the National Academy of Engineering in its report
“Grand Challenges for Engineering.” The grand energy challenges would be addressed by
awarding grants to consortia composed of one or more institutions of higher learning, DOE
national laboratories, federally funded research centers, private industry entities, and not-forprofit institutions, but including at least one non-federal entity. This subtitle includes
authorization of appropriations for such sums as are necessary to carry out the section for each of
fiscal years 2010 through 2019. The intent of this consortium approach is to bring to bear the
resources of several key institutions to address the complex multidisciplinary challenges.
100
101
Prepared by (name redacted), 7-...., [redacted]@crs.loc.gov.
Prepared by (name redacted), 7-...., [redacted]@crs.loc.gov.
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Summary and Analysis of S. 1462: American Clean Energy Leadership Act of 2009
Subtitle C—Improvements to Existing Energy Research and
Development Programs102
Summary and Analysis of This Subtitle
This subtitle would amend seven statutes with the intent of improving or extending some aspect
of several energy research and development programs within the Department of Energy.
One provision would amend the America COMPETES Act (42 U.S.C. 16538) to allow ARPA-E
to initiate and execute grants, contracts, cooperative agreements, and other transactions separate
from the Department of Energy, and would authorize ARPA-E through 2020.
The subtitle would also amend the United States Energy Storage Competitiveness Act of 2007 (42
U.S.C. 17231) to create a vehicle battery manufacturing research program within DOE.
The third amendment would increase the amount of authorization for lightweight materials
research and development from $80 million to $100 million in the Energy Independence and
Security Act of 2007 (42 U.S.C. 17241).
The fourth would amend the Methane Hydrate Research and Development Act of 2000 (30
U.S.C. 2001) to include research on potential environmental impacts of methane hydrates, and
would expand research for a variety of technological, environmental, developmental, and
educational aspects of methane hydrate exploration and development. This amendment would
also authorize such research through 2015, and would authorize $10 million per year for
environmental monitoring associated with methane hydrate development.
The fifth amendment in this subtitle would create a research program at DOE to develop
technologies for separating helium from low-BTU natural gas by amending EPACT05 (42 U.S.C.
16513(b)). The intent of the research would be to provide a supply of helium from low-BTU
natural gas and to enhance the value of the natural gas.
The sixth amendment would revise the Department of Energy Organization Act (42 U.S.C. 7131)
to establish an Office of Arctic Energy within DOE to address a variety of energy issues in the
Arctic, including deployment of electricity-generating capabilities and promotion and
development of enhanced oil recovery, heavy oil production, reinjection of carbon, extended
drilling technologies, gas-to-liquids technologies, small hydroelectric facilities, and natural gas
hydrates in the Arctic region. The Office of Arctic Energy would have funding authorized through
2012.
The last amendment in this subtitle would formally establish and name the Unconventional
Domestic Natural Gas and Other Petroleum Resources Program, which would plan and conduct
research and development through a grant process to research consortia, via an amendment to
EPACT05. The authorization of appropriation for this program would be increased from $100
million to $350 million.
There are no similar provisions in H.R. 2454.
102
Prepared by (name redacted), 7-...., [redacted]@crs.loc.gov.
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Summary and Analysis of S. 1462: American Clean Energy Leadership Act of 2009
Related Spending Provisions in the American Recovery and Reinvestment Act of
2009 (P.L. 111-5)
Appropriations within the ARRA that relate directly to the proposed amendments in this subtitle
include $400 million for ARPA-E, $2.0 billion for grants for advanced battery/battery component
manufacturing facilities, and $1.6 billion for the DOE Office of Science.
Subtitle D—Energy Workforce Development103
Summary and Analysis of This Subtitle
The importance of preparation for energy careers beginning in secondary schools would be
recognized by Sec. 431 with the establishment of competitive grants for states to create or expand
energy career academic programs. Appropriations authorized are $14 million for fiscal year 2009;
$22.5 million for fiscal year 2010; and $30 million for fiscal year 2011.
Community colleges are seen as addressing a perceived decline of qualified workers in the energy
workforce by using grant programs to expand and enhance educational capabilities for preparing
students for careers in trades relevant to the energy industry. The program provides for renewable,
competitive grants for as much as $500,000 each year to community colleges for up to five years
in duration. DOE is also required to submit a study of energy workforce training programs funded
by federal agencies, and plan for filling future needs. Additional funding of up to $100 million is
authorized for fiscal years 2010 through 2015 for training in alternative energy technologies,
energy efficiency, sustainable energy technologies, recycling and waste reduction, water and
energy conservation, and other energy technologies.
Sec. 436 establishes direct hire authority for the Secretary of Energy upon a determination that
there is a severe shortage of highly qualified scientists, engineers, or critical technical personnel
in the agency. The Secretary is also permitted to establish compensation for these positions. No
more than 40 such positions may be filled any one time. Compensation and term of employment
for such employees must follow prescribed guidelines.
Comparison to Similar Provisions in H.R. 2454, American Clean Energy and
Security Act of 2009
Sec. 422 increases funding for Energy Worker Training by $25 million in the Workforce
Investment Act of 1998.
Related Spending Provisions in the American Recovery and Reinvestment Act of
2009 (P.L. 111-5)
Title VIII of ARRA provides $500 million under Training and Employment Services for research,
labor exchange, and job training projects preparing workers for careers in energy efficiency and
103
Prepared by Richard Campbell, 7-...., [redacted]@crs.loc.gov.
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Summary and Analysis of S. 1462: American Clean Energy Leadership Act of 2009
renewable energy. Title IV also provided an additional $100 million for worker training in
transmission grid modernization and related activities, such as the Smart Grid.
Subtitle E—Strengthening Education and Training in the
Subsurface Geosciences and Engineering for Energy
Development104
Summary and Analysis of This Subtitle
The Secretary of the Interior is directed to provide research funds for 10 years to assist
development of academic programs producing workers for subsurface geosciences and
engineering in energy (including geological carbon storage), petroleum, groundwater, economic
geology, mining, and mineral and geological engineering. Technological developments are
increasing the possibilities for developing energy resources in the deep earth once thought
undevelopable (such as unconventional natural gas), and may provide future commercial
opportunities for carbon sequestration. Skilled workers and technicians may increasingly be
needed if long-term underground sequestration becomes the preferred mechanism for dealing
with carbon captured from traditional fuels such as coal or natural gas.
No similar provisions are included in H.R. 2454 or ARRA.
Subtitle F—Miscellaneous105
Summary and Analysis of This Subtitle
Sec. 471 authorizes the Secretary of Energy to enter into transactions with public agencies,
private organizations or other persons for purposes related to DOE’s functions. The Secretary is to
report to Congress on how this authority has been used. Sec. 473 is designed to protect the
proprietary data of those contracted to perform studies for DOE.
DOE is directed to fund a program to demonstrate marine and hydrokinetic technologies, and
evaluate the environmental effects of the technologies. Open standards are to be developed to
facilitate the transfer of results to the public and incentivize industry compliance with these
standards. Up to $250 million is authorized for each fiscal year from 2010 to 2021 for the
program.
Comparison to Similar Provisions in H.R. 2454, American Clean Energy and
Security Act of 2009
Studies are required of CCS issues for geological sequestration sites in Sec. 113.
104
105
Prepared by Richard Campbell, 7-...., [redacted]@crs.loc.gov.
Prepared by Richard Campbell, 7-...., [redacted]@crs.loc.gov.
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Summary and Analysis of S. 1462: American Clean Energy Leadership Act of 2009
Related Spending Provisions in the American Recovery and Reinvestment Act of
2009 (P.L. 111-5)
ARRA provides $3.4 billion in R&D funding in DOE’s Fossil Energy program, the majority of
which was for CCS activities, including $20 million for geologic sequestration training and
research and $10 million for unspecified activities.
Title V—Energy Markets106
Summary and Analysis of This Title
This title contains several measures intended to help stabilize the oil, natural gas, and electricity
markets. The motivation for these provisions appear to be several disruptive events in the energy
markets over the past decade, including the manipulation by Enron and others of the western
electricity markets; wide and abrupt swings in the prices of natural gas, crude oil, and gasoline;
and concern over the role of speculators and other financial players in the energy markets. The
measures fall into three categories: information, analysis, and regulation. The information items,
which are intended to promote stability by increasing market transparency, include the following:
•
The Energy Information Administration (EIA, the statistical and analytical arm of
the Department of Energy) would be directed to launch new programs to gather
information on oil inventories held by the largest traders of oil contracts and on
the oil and natural gas storage capacity in the United States.
•
DOE would be directed to expand the existing Tariff Analysis Project,107 an effort
by the Lawrence Berkeley National Laboratory to collect and make easily
available online information on retail electric rates.
Analytical measures, which are aimed at better understanding the role of financial players in the
energy markets, include:
•
EIA is directed to create a new Financial Market Analysis Office to “be
responsible for analysis of the financial aspects of energy markets.”
•
The bill would establish a high-level Working Group on Energy Markets
(including, among others, the Secretaries of Energy and the Treasury). The
group’s tasks would include “investigat[ing] the effect of increased financial
investment in energy commodities on energy prices and … energy security”;
recommending steps needed to prevent excessive speculation from destabilizing
energy markets; reviewing international energy markets; and performing a study
with accompanying recommendations for reform “of the factors that affect the
pricing of crude oil and refined petroleum products,” including the role of
speculators.
The regulatory measures, which are potentially the most controversial, include:
106
107
Prepared by Stan Kaplan, 7-...., [redacted]@crs.loc.gov, and Richard Campbell, 7-...., [redacted]@crs.loc.gov.
The website for the existing program is located at http://tariffs.lbl.gov/.
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Summary and Analysis of S. 1462: American Clean Energy Leadership Act of 2009
•
In the event of an “emergency” in wholesale electricity markets—where
“emergency” means a disruption affecting reliability or causing “sudden and
excessive price fluctuations”—FERC would have the authority to issue orders
temporarily suspending existing tariffs and contracts. The maximum duration of
such an order would be 30 days.
•
FERC would be granted “cease and desist” authority to block actual or attempted
illegal manipulation of the electricity or natural gas markets. This authority
would also allow FERC to freeze the assets of the party at issue, the object being
to prevent the party from “dissipating” its assets before it can be ordered to either
pay fines or make restitution (this is an issue in a recent case before FERC).
Comparison to Similar Provisions in H.R. 2454, American Clean Energy and
Security Act of 2009
Sec. 359 of Subtitle E, Title III, of H.R. 2454 gives FERC cease and desist authority with respect
to natural gas markets. Unlike the provision in ACELA, the ACES provision applies to any
violation of applicable law and regulation, not just cases of market manipulation.
There are no related provisions in ARRA.
Title VI—Policy Studies and Reports108
Summary and Analysis of This Title
This title would direct the completion of a number of policy studies and reports, summarized
briefly here. Taken together, these studies are intended to provide Congress and other decision
makers with improved information and understanding for the management of resources and
formulation of policy.
Sec. 601 of this title would direct the U.S. Geological Survey to conduct a national assessment of
helium resources, which are important for a variety of industrial and medical applications, with
information on other gases associated with the helium.
Sec. 602 calls for an assessment and report on known and undiscovered potash deposits in the
United States, and would include provisions for a drilling program and an evaluation of
assessment methodologies. Potash is a general term applied to potassium oxide, potassium
carbonate, and a variety of related potassium salts that go into fertilizer and the manufacture of
glass.
Sec. 603 would amend the Department of Energy Organization Act (42 U.S.C. 7321) with the
aim of improving national energy planning and strategies. The improved planning process would
include input from relevant federal agencies and would examine federal policies that affect
energy production, energy efficiency, reduction of air pollution, and the reduction, avoidance, or
sequestration of greenhouse gases. This provision would require the National Academy of
108
Prepared by (name redacted), 7-...., [redacted]@crs.loc.gov.
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Summary and Analysis of S. 1462: American Clean Energy Leadership Act of 2009
Sciences to participate in the planning process and would provide authorization of funding for
such studies.
Sec. 604 acknowledges that international climate change strategies will depend in part on the
actions of China and India, and that improved understanding of their actions will benefit
strategies undertaken by the United States to help reduce global emissions of greenhouse gases.
This section would establish an interagency task force to investigate and analyze national or
subnational policies, programs, laws, regulations, incentive mechanisms, and other measures that
might reduce energy use and greenhouse gas emissions in China and India. The report would
include the current status of, and opportunities and recommendations for, research cooperation
and technology deployment and trade, and would be submitted to Congress within six months of
passage.
Under Sec. 605, carbon leakage is defined as a substantial increase in greenhouse gas emissions
by a manufacturing facility located in a country without a greenhouse gas emission regulation
commensurate to a cap-and-trade program, or an increase in emissions caused by an increase in
the incremental cost of production in the United States as a result of a domestic cap-and-trade
program. This section would require DOE, in consultation with other relevant federal agencies, to
conduct a study that characterizes the relative risk of such carbon leakage and changes in output
and investment in U.S. industrial sectors resulting from the implementation of a cap-and-trade
program in the Unites States. The study is to include an assessment of price and trade elasticity of
U.S. industries, as well as other economic indicators. DOE would also be directed to conduct a
study evaluating the impact of potential measures that might be implemented to mitigate carbon
leakage, including an analysis of measures used by other jurisdictions to reduce carbon leakage,
the risk of carbon leakage from U.S. industries under potential prices of greenhouse gas
emissions, and scenarios for international climate policy.
Sec. 606 would require the Secretary of Energy, in consultation with the Secretaries of State and
Commerce, to conduct a study and report to Congress on the impact of foreign fuel subsidies on
global energy supply and demand, and on the global economy, with associated recommendations
for mitigating actions.
Sec. 607 would amend Sec. 201(b) of EPACT05 to require the Secretary of Energy, as part of the
current requirement for an annual assessment of renewable energy, to assess the quantity of
biomass needed for thermal applications, biofuels, and biomass-based electricity, the highest
efficiency energy use of biomass resources, the requirements and costs associated with the
deployment for each of these applications, and the market penetration for each renewable energy
resource that could be accomplished by 2030.
Sec. 608 calls for a review to quantify the efficiencies of U.S. electric generation facilities. It
would require identification of, among other things, the technologies that may be deployed to
increase the efficiency of the electric generation facilities and any obstacles that could impede the
deployment of those technologies.
Sec. 609 would require DOE, in cooperation with other relevant federal agencies, to evaluate the
emissions from the use of alternative transportation fuels and fuel blends used in heavy-duty and
light-duty diesel engines and in the aviation sector. The study would evaluate the effect of using
alternative transportation fuels on air quality and public health. “Such sums as are necessary” are
authorized for the study.
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Summary and Analysis of S. 1462: American Clean Energy Leadership Act of 2009
Sec. 610 includes findings expressing the vulnerability of the United States resulting from
reliance on imported oil, and calls for “transformative steps to wean itself from its addiction to
foreign oil.” This section contains an explicit statement that it is the policy of the United States to
reduce its dependence on foreign oil. An interagency task force composed of DOE and other
relevant agencies would submit a report to Congress describing options for agency actions that
would reduce forecasted U.S. oil consumption in stages by 10,000,000 barrels of oil per day by
2030. Recommended actions would be required to comply with the policy statement above,
include only options directly related to reduced oil consumption, describe advantages and
disadvantages for each option, and avoid increases in lifecycle greenhouse gas emissions above
levels in effect on the date of enactment. Reports to Congress under this provision would be
allowed to request additional legislative authority to implement recommendations. An annual
report of progress would also be required.
Comparison to Similar Provisions in H.R. 2454, American Clean Energy and
Security Act of 2009
H.R. 2454 contains a number of study provisions, but none are precisely the same as the studies
mandated in this title. Studies proposed in this title would certainly inform some of the processes
and programs established in H.R. 2454. For example, the assessment of national plans and
policies for climate change mitigation in China and India in Sec. 604 of this title would directly
support the requirement in H.R. 2454 that the EPA Administrator submit an annual report on the
details of any greenhouse gas standards adopted by China and India. Likewise, the report on
carbon leakage proposed in this title would support the efforts to address carbon leakage
contained in Title IV of H.R. 2454.
Related Spending Provisions in the American Recovery and Reinvestment Act of
2009 (P.L. 111-5)
ARRA contains several funding provisions for various energy and climate change programs, but
none are precisely for the studies mandated here.
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Summary and Analysis of S. 1462: American Clean Energy Leadership Act of 2009
Author Contact Information
(name redacted), Coordinator
Specialist in Energy Policy
[redacted]@crs.loc.gov, 7-....
(name redacted)
Specialist in Energy and Infrastructure Policy
[redacted]@crs.loc.gov, 7-....
(name redacted), Coordinator
Section Research Manager
[redacted]@crs.loc.gov, 7-....
(name redacted)
Analyst in Energy Policy
[redacted]@crs.loc.gov, 7-....
(name redacted)
Specialist in Energy Policy
[redacted]@crs.loc.gov, 7-....
(name redacted)
Specialist in Energy and Environmental Policy
[redacted]@crs.loc.gov, 7-....
(name redacted)
Specialist in Energy Policy
[redacted]@crs.loc.gov, 7-....
(name redacted)
Specialist in Energy Policy
[redacted]@crs.loc.gov, 7-....
(name redacted)
Specialist in Energy and Environmental Policy
[redacted]@crs.loc.gov, 7-....
(name redacted)
Specialist in Energy and Natural Resources Policy
[redacted]@crs.loc.gov, 7-....
(name redacted)
Specialist in Natural Resources Policy
[redacted]@crs.loc.gov, 7-....
(name redacted)
Specialist in Public Finance
[redacted]@crs.loc.g
ov, 7-....
Congressional Research Service
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