Why some greens favor energy bill

Tucked away inside the mammoth Energy Policy Act of 2003 - all 1,148 pages of it - lies a tiny provision: a $125 million federal loan to retrofit an idle "clean coal" power plant, converting it into a conventional coal utility.

It's not big as electric plants go, just 50 megawatts sitting unused since it was built in 1999. But it also stands just five miles from Alaska's Denali National Park and threatens to foul the park's pristine air.

Taxpayers will be paying "to turn a dirty coal plant into an even dirtier conventional unit," says Anna Aurilio, an analyst for the US Public Interest Research Group, a legislative and environmental watchdog group in Washington, D.C.

America's new energy bill is many things, but environmentally friendly it is not, say environmental lobbyists, who are almost apoplectic about its "dirty energy" provisions.

But while environmentalists steam, the surprise is that some renewable energy trade groups are actually excited over the money the bill is likely to send their way. Indeed, the bill threatens to drive a wedge between green power and environmental activists.

For the first time since 1986, there's a 15 percent tax credit, up to $2,000 for homeowners who buy solar electric or hot-water systems - and there's a similar credit for wind power or fuel-cell systems.

By effectively splitting off green-power advocates from the environmental movement, the bill's Republican authors have enhanced its chances of passage (it cleared the House Tuesday and, at press time, a vote was pending in the Senate) and blunted criticism that the GOP doesn't protect the environment.

House Energy and Commerce Committee chairman Billy Tauzin, (R) of Louisiana, hailed the bill as one of the most far-reaching in US history, saying, "Americans can look forward to cleaner and more affordable energy, reliable electricity, and reduced dependence on foreign oil."

But is it a net plus or minus for the environment? That depends on whether one looks at the provisions themselves - or weighs them in the balance of the nation's overall energy policy. Consider the tax breaks for residential renewable energy. They could boost renewable fuels at a time when consumers are taking a closer look at the technologies.

"More and more consumers are looking to deploy renewable-energy systems to improve the environment or to provide additional security from blackouts," says Glenn Hamer of the Solar Energy Industries Association, which represents solar-energy manufacturers. SEIA and the American Wind Energy Association have endorsed the bill. But Mr. Hamer figures that credit is worth only $100 million - peanuts, compared to the bulk of spending in the bill.

About three-quarters of the bill's estimated $25 billion in tax incentives and funding would go to spur oil, gas, coal, and nuclear power production - including "clean coal" programs. About $6 billion in tax credits go to the nuclear energy industry alone, the US PIRG says.

Only about a quarter of the total is targeted at renewable sources such as solar, wind, geothermal, ethanol, and hydrogen.

Notably excluded from the bill is a renewable standard that would have required that 10 percent of the nation's electricity be produced by renewable energy sources by 2020, up from 2 percent today. (Europe, by contrast, is on track to produce 22 percent of its electricity from renewable sources by 2010.) Nor does the bill mandate higher gas mileage from automakers. Such omissions have led most environmental groups to condemn the bill.

"It's a sub-zero net minus for the environment, quite clearly," says Rob Perks, a spokesman for the Natural Resources Defense Council.

Who else likes the energy bill? Ethanol producers do - and so does Gary Duffy. A farmer who lives with his family in Oldham, S.D., he plants 500 acres of corn.

Page: 1 | 2