Note: Synopsis based on Our Energy Policy Foundation staff review of Congressional committee and office summaries, third party analyses, and media summaries. Synopsis intended solely for purposes of generating discussion.
Greenhouse Gas Reductions
- Would require certain industries to reduce greenhouse gas emissions below 2005 levels along the following timeline: 4.75% by 2013, 17% by 2020, 42% by 2030, and 83% by 2050.
- Would institute a cap-and-trade mechanism for greenhouse gas reductions. The cap would include electricity generators, petroleum-based fuel producers, natural gas distributors, producers of certain fluorinated gases, and other sources. Requirements would take effect in 2013 for electricity generators and transportation fuels, with coverage beginning in 2016 for local natural gas distributors and industrial emissions sources.
- Would set an initial price floor of $12/ton (2009 dollars) for emissions permits with a price ceiling of $25/ton. The price floor would rise 3% above inflation each year and the ceiling would rise 5% above inflation each year.
- Would allow unlimited borrowing from the following year’s allowances without penalty, and would allow up to 15% of annual compliance through allowances borrowed from up to 5 years in the future (at a cost of 8% annually). Firms could bank allowances for future use without restriction.
- Would allow up to a total of 2 billion tons of greenhouse gas reductions to be achieved through offsets, 75% of which would need to be domestic.
- Emissions from transportation-related fuels would be treated differently in terms of allowance allocation. Industries deemed to be both energy-intensive and trade-exposed could be granted allowances.
- Revenue from the government’s sale of emissions permits would be used for a variety of projects, including offsetting heightened energy costs for low- and moderate-income households, supporting research and development of advanced clean energy and energy efficiency technologies, Federal deficit reduction (beginning in 2026), natural resource protection, clean transportation planning, etc.
Domestic Energy Production
- Would expand the existing nuclear power generator loan guarantee program to $54 billion and double the current regulatory risk insurance program to cover up to 12 reactors. Would provide a range of tax incentives, and streamline the new nuclear facility licensing process.
- Would expand domestic oil supplies by providing for revenue sharing from offshore drilling. 37.5% of revenues would be directed to states and 12.5% would be for federal use under the Land and Water Conservation Fund. Would allow states to prohibit drilling within 75 miles of their coastline. Would require the Department of Interior to conduct impact studies of potential oil spills; states found to be impacted by potential spills would be allowed to take action to ban leasing from designated sites.
- Would create a program managed by the Department of Energy to support initial large-scale carbon capture and sequestration (CCS) demonstration projects. Funding for CCS demonstration and commercial deployment would come from a fee on fossil fuel-based electricity and greenhouse gas cap allowance revenues.
Emergent Energy Technology Investment
- Would establish a Clean Energy Technology Fund and a Clean Vehicle Technology Fund to develop energy technologies and promote U.S. advanced technology leadership.
- Would extend and double the alternative fuel credits for natural gas vehicles.