Friday, May 29, 2009

Oberstar Focusing On Highway Trust Fund Reauthorization

House Transportation Committee Chairman James Oberstar announced during the congressional recess this week that he expects his committee to complete work on a five year surface transportation reauthorization bill by the end of June, so the legislation can reach the Oval Office by the end of this fiscal year. The last such legislation, passed in 2005, appropriated $286 billion, with 8.4% of that amount devoted to Congressional earmark projects.

Oberstar expects the bill coming out of his committee will be appropriate in the neighborhood of $450 billion, and earmark requests for 33.2% of that total have already been submitted, though it is not at all clear they will all end up in the legislation.

Democrats want the legislative measure to give a larger portion of the cash for public transit projects and less for highway construction than past measures have provided. Transportation Secretary Ray LaHood, Senate Commerce, Science and Transportation Chairman Jay Rockefeller and Senator Frank Lautenberg of New Jersey are all pushing for the final bill to favor public transportation and reduce individual car miles driven, though no debate on any reauthorization measure has even been posted on the Senate schedule as yet.

A Recess Look At Stimulus Progress

So far only $31.1 billion of the $787 billion appropriated in the economic stimulus legislation has been spent. According to this expenditure has saved or created a mere 150,000 jobs, very few of them in the construction sector, and less than one percent of the recent recession induced job losses in the United States.

Particularly disheartening are the following facts: only 13 of 50 states have received the money appropriated for education programs; 17 states report no jobs created as yet; Alaska governor Sarah Palin has vetoed $80 million of the recovery funds appropriated for her state; and Louisiana Governor Bobby Jindal has rejected $98 million in federal unemployment benefit funds for his state. According to USA Today, in the eight states with over 10% unemployment the contracts awarded amount to only $7.42 per capita, while North Dakota, with the lowest unemployment rate, has received about $26 per capita in stimulus contracts.

What are these state and local officials thinking?

Friday, May 22, 2009

The Road For Climate Change Legislation Is Long And Winding

After 37 hours of debate regarding 94 amendments, House Energy and Commerce Chairman Henry Waxman got his climate change bill out of committee on a vote of 33-25 Thursday night. Waxman has backed off a move to send the bill directly to the House floor, and it looks like further mark ups in the Agriculture and Ways and Means Committees are going to be scheduled before any floor vote.

FAA Reauthorization Passes House

The House of Representatives voted 263-154 Thursday to approve legislation appropriating $53.5 billion for airport improvements during the next two years. Republican opposition to the bill centers on provisions requiring more frequent U. S. inspection of overseas aircraft repair facilities, which Republicans fear will set off a trade war with the European Commission.

Transportation Secretary Ray LaHood Predicts Highway Reauthorization This Session

In a speech Thursday to at the National Press Club, LaHood predicted that House Transportation and Infrastructure Chairman James Oberstar will pursue a "very aggressive schedule" on surface transportation reauthorization legislation immediately following the Memorial Day break, and that a bill will pass both houses this session. He also said "This administration will not be promoting an increase in the gas tax," but would not predict how the multi year measure would be funded.

Vote For My Lien Waiver Idea

If you like the idea of posting stimulus project lien waivers on, follow this link to the open government initiative website and vote for the idea:


Thursday, May 21, 2009

Washington Post Details Transparency Beefs

An article in today's Washington Post by Alec MacGillis details Congressional beefs regarding the lack of information about stimulus spending on the Obama administration's website when compared to the private sector site, which is using the technique I first suggested in my March 16 blog post this year:

OMB's RAT Board Chairman Earl Devaney has complained that the transparency respecting expenditure of stimulus legislation funds on the website will require most of his $84 million oversight budget, and over a year to develop. Federal and state agencies can't agree on how much detail should be included in reports on construction projects funded by the American Recovery and Reinvestment Act.

I have an idea that won't require creation of a single additional piece of paper. How about assigning a unique identifying number to each individual project funded in whole or in part by these appropriations. Create a database attaching the identifier with the brief project description already included in the front end of every government construction contract. Then, link the identifier to .pdf copies of the contractor's sworn statement and lien waivers already submitted with each monthly pay request on every government construction job.

This way, citizens interested in the progress and efficiency of any particular project could quickly drill down to a complete list of every business that was paid any money for labor or materials on the project. Furthermore, neither the bureaucrats nor the contractors on the project would have to write up a single document they are not already required to prepare. As far as I can tell all this information is already required to be public under the freedom of information laws in every state anyway, so no one's toes get stepped on, and no one has to do any extra work. Just run the sworn statements and lien waivers through a scanner every month and e-mail them to Devaney's folks in Washington, D.C. for electronic insertion into the database. Nobody even has to spend money on stamps. Mission accomplished.

Devaney is defending the failure of to include more detailed information because, he says, he is "worried about overburdening small businesses," according to the MacGillis newspaper story. Someone with knowledge of public construction contracting practices ought to tell Devaney that all of this information is already required of, and reported by, construction contractors every time they apply for payment on a government project, right down to the names, addresses and amounts paid to every subcontractor and material supplier who gets any money on the job. Without these lien waivers, the general contractor won't get paid. Asking the local or state government agency to scan the lien waivers and sworn statements and e-mail them to Devaney's folks in Washington D.C. would probably require six minutes per month per project out of the busy workday of some government secretary in a state or local agency office. No additional burden is placed on either the contractor or the contracting government agency.

There are no secrets in these pay request packages, and as far as I can tell the documents are already publicly available under the freedom of information laws in every American jurisdiction, so all that is needed is forwarding them to Devaney and his staff, and posting them on Devaney's website.

The failure of the folks in Washington D.C. to accept this simple truth is utterly astonishing.
Here's the story:

Climate Change Legislation Debates Rumble On

The House Energy and Commerce Committee today rejected an amendment which would have excluded electricity generated from nuclear energy from the baseline calculations for cap and trade program carbon reduction requirements. That proposed compromise would not have made nuclear power a "renewable source," but would have excluded it from being counted as a carbon emitting source, as it is under the bills pending in both houses. Ouch!

Meanwhile, over on the Senate side, Energy and Natural Resources Chairman Jeff Bingaman and Senator Sam Brownback of Kansas have reached agreement on a renewable electricity mandate in the Senate version of climate change legislation. Finally, further delays in passage may be in the offing, as House Ways and Means Chairman Charles Rangel announced yesterday that his committee intends to act on health care reform before taking up climate change issues, and also that he thinks a straight carbon tax may be better than the bill coming out of the House Energy and Commerce Committee. I guess President Obama will not be looking to sign any climate change bill before Memorial Day as he thought he might be doing.

Wednesday, May 20, 2009

Cap and Trade For The Construction Industry

American Clean Energy And Security Act Of 2009 - HR 2454

I have spent the last week of my spare time parsing all 932 pages of this draft of the Obama administration's cap and trade carbon emissions limitation legislation, to see if there is anything in the bill of concern to the construction industry. Here's what I have found:

Section 610(a)(13)(A) and (B): The bill includes hydroelectric power as part of the definition of renewable energy, so long as is comes from 1) increased efficiency or capacity created after January 1, 1992; or 2) power generation capacity added after January 1, 1992 to a dam which did not have generators before that date.

Section 610(a)(14) The bill includes as renewable energy power produced from burning solid municipal waste and construction, demolition and disaster debris, before or after gasification.

Section 610(a)(15) allows credit for energy savings created by reduced electricity consumption resulting from recaptured waste electrical, mechanical or thermal energy from commercial or industrial systems.

Section 610(a)(16) defines renewable biomass as including plant material from construction debris and landscape trimmings, removed from within 300 feet of a road, power line, utility tower or water supply line - meaning the heat from burning such materials counts as renewable energy.

Sections 610(a)(17) and (18) define renewable energy resources as including fuel cells, wind power, solar power, geothermal energy, biomass, biogas, biofuels and qualified hydroelectric power, and energy generated by sea tide and current movements of water in the oceans.

Section 1610(d)(2) requires retail electricity suppliers to derive a target percentage of their current power sales from renewable sources as follows: 6% in 2012 and 2013; 9.5% in 2014 and 2015; 13% in 2016 and 2017; 16.5% in 2018 and 2019; and 20% in 2020 through 2039, or [Section 1610(g)(1)] pay the government $25 per megawatt hour of the shortfall.

Section 1610(l) sunsets the requirements in 2040.

The bill permits but does not require industry to create a Carbon Storage Resource Corporation to perform research into carbon capture technologies. If firmed, the corporation's activities will be funded between $1 billion and $1.1 billion per year out of taxes on power from carbon combustion rated at $0.00043 per kwh for coal, $0.00022 for natural gas and $0.00032 for oil.

New coal fired power plants will continue to be permitted for construction, so long as they achieve at least a 50% reduction in CO2 emissions, if built before 2020, and a 65% reduction thereafter.

Electric utilities are required to plan for and provide a "smart grid" for charging electric powered vehicles, interoperable with vehicles of all manufacturers, and capable of recognizing the vehicle's owner no matter where the vehicle is connected for charging, billing the power used to the vehicle owner's account. There's going to be a lot of construction dollars spent on this one.

The bill encourages development of technologies for generating offshore electric power from tides, winds, wave energy and ocean currents.

Section 304(a) requires building codes to be revised to achieve design energy consumption savings of 30% when the act is passed, and 50% by 2014 for residential construction and by 2015 for commercial construction, with additional reductions of 5% every three years thereafter until 2030.

Greenhouse gas emissions are to be reduced 3% by 2012, 20% by 2020, 42% by 2030 and 83% by 2050, measured from base levels in 2005.

What does all this mean for construction? Well, the ability to burn debris for carbon cap and trade credits should keep tipping fees under control for a few years, construction of the smart grid and other renewable energy production facilities will keep certain types of construction tradespeople employed, and the cap and trade costs and vehicle emissions controls will increase costs for construction contractors just as it will for all other businesses.

For the text of the bill, go here:

The bill is currently still in markup in the House Energy and Commerce Committee, where Republican members intent to offer up to 400 amendments before it goes to the floor, where they will most likely vote against it regardless of the fate of their numerous amendments.

While the cap and trade program details remain subject to revision as the legislative process moves forward, the provisions outlined above regarding the construction industry are not likely to be changed much. We will keep you posted.

Chicago Area Stimulus Grants for Commuter Station Construction Announced

The Chicago area's commuter rail network, METRA, announced it is receiving $140.9 million from the American Recovery and Reinvestment Act appropriations. While the bulk of the funds will go towards upgrading of rolling stock, the agency has allocated the following amounts for infrastructure construction: $43.6 million for bridge replacement; $5 million for restoration of the Winnetka commuter station; $1 million to add parking at the Pingree Road commuter station; $1.8 million for parking at the Elburn commuter station; $2.4 million for rehabilitation of commuter station platforms at Joliet and Lockport; $6.8 million, plus a separate additional $4.9 million from a Congressman Rush earmark, for a new commuter station at 35th street on the Rock Island line, to serve the White Sox baseball park; $7 million for signal upgrades; and $1 million for renovation of the commuter station at the Golf Road stop.

Green Schools Appropriations Pass House

May 14 the House of Representatives passed HR 2187, the 21st Century Green High-Performing Public School Facilities Act. Replacing appropriations cut from the stimulus legislation in the Senate, the bill appropriates $6.4 billion for modernization, renovation and repairs to public school buildings to improve health, safety and energy efficiency. The funds may not be used for building new schools. The money may be used for repairs and upgrades to roofs, HVAC, fire, health, life safety and seismic code requirements, ADA accessibility, asbestos, lead, PBC mold and mildew abatement, noise reduction, reducing consumption of coal, electricity, natural gas, oil or water, post consumer recycled materials on playground equipment, and a few other esoteric "green" modernizations.

There is also a separate appropriation of $600 million over six years for rebuilding schools damaged by hurricanes Rita and Katrina.

Funds may not be used to pay maintenance costs, or for construction of any athletic facility charging admission to the general public. "Buy American" requirements for iron, steel, and manufactured goods are included in the bill, along with contracting preference requirements for local, small business, minority, women and veteran owned contractors. In 2010, 50% of any grant must be used for green construction, with the percentage increasing ten percent a year up to 100% in 2015. Finally, the bill prohibits earmarking of any of the funds.

It will be most interesting to see how this legislation fares in the Senate, which cut these very appropriations from the stimulus bill.

Water Infrastructure Reauthorization Moves to Senate Floor

The Senate Environment and Public Works Committee voted 17-2 to report to the floor S 1005, the legislation reauthorizing $20 billion for the Clean Water State Revolving Fund and $14.7 billion for the Drinking Water State Revolving Fund , to fund approximately 1,700 water infrastructure projects per year through 2014. The bill includes Davis Bacon prevailing wage requirements.

Secretary Chu Announces Clean Coal Grants, Faces Congressional Grilling

Last week energy Secretary Steven Chu announced the release of $2.4 billion in grant funds for development of clean coal technology, remarking to a meeting of the Clean Coal Council that the U. S. has the world's largest deposits of coal. Of the money released, $800 million is for efforts to reduce sulfur, nitrogen and mercury pollution, $1.5 billion for carbon capture projects, and $50 million for identification of geologically suitable CO2 injection sites.

Yesterday, Chu faced a grilling from Senators regarding their pet energy projects, including questions from Byron Dorgan of North Dakota about flat funding of clean coal research, and reduced funding for fuel cell technology; from Robert Bennett of Utah about nuclear power reactor development; from Lamar Alexander of Tennessee about failure to include nuclear power in the definition of "renewable energy," from Thad Cochran of Mississippi about strategic petroleum reserve storage in Mississippi subterranean salt domes, from Diane Feinstein of California about wind farms in the California desert, and from Washington's Patty Murray about cleaning up Defense Department nuclear weapons sites. I am guessing we can look for Senate earmarks to may of these projects.

Highway Trust Fund Reauthorization Tussles Continue

Emblematic of the difficulties facing any timely reauthorization of the federal highway trust fund, Senate Commerce Chairman Jay Rockefeller and Commerce Surface Transportation Subcommittee Chairman Frank Lautenberg have introduced a bill calling for yearly reductions in per capita auto miles driven, reduction of tailpipe CO2 emissions 40% by 2030, and increasing off highway freight by 10% by 2020. American Trucking Association Senior Vice President Tim Lynch responded that "A simple Act of Congress cannot overturn the entire United States distribution and supply chain network that depends on the trucking industry to move 70% of the nation's freight." Fuel efficiency by rail and water would mean job losses for truck drivers.

Meanwhile, over in the house, several Congressmen have argued that including support for pet projects in the highway trust fund reauthorization bill does not violate their pledge to abstain from earmarks. Unlike typical annual appropriations bills, the highway reauthorization legislation comes up for consideration only every fifth year, increasing the pressure on Congressmen to bring home the bacon.

State Applications For Education Stimulus Funds Lagging

With the July 1 deadline approaching rapidly, Education Secretary Arne Duncan reports that only 22 of the 50 states have applied for their shares of the $48.6 billion state fiscal stabilization fund designed to save teacher jobs across the nation. Only a total of $13 billion has been distributed to 13 different states, though the Education Department stood ready to dole out as much as $32.4 billion of the money by April 1 this year. Secretary Duncan says his staff can review and approve applications in nine days, but the state paperwork has not even been submitted by 28 states as of yesterday. You would think states wanting to avoid teacher layoffs when school starts in the fall would have deposited these checks already.

Wednesday, May 13, 2009

Net Operating Loss Bill Draws Homebuilder Support

Senate Finance Committee Chairman Max Baucus and Maine Senator Olympia Snowe are sponsoring a measure expected to be included in the next major tax bill out of the Ways and Means Committee, enacting the five year tax loss carry back which was deleted from the economic stimulus legislation. Current rules permit loss carry back for only two years. The Homes for America Alliance, a group of 75 large and small home building contractors, has been formed to lobby in favor of this legislation.

The group was formed shortly after National Association of Home Builders President Jerry Howard sent a letter to Speaker Nancy Pelosi regarding the stimulus bill, in which Howard questioned the need for the extended loss carry back legislation. Tim Eller, CEO of Centex and head of the High Production Home Builders Council, have met several times with NAHB senior staff in efforts to smooth over Howard's lobbying gaffe. Since the firestorm within NAHB over Howard's letter, NAHB Chairman Joe Robinson has said that NAHB "fully supports" extension of the carry back to five years, but not every member builder is satisfied of the depth of NAHB's commitment to this new law. As a result, they formed HAA, and HAA has already hired two high powered Washington lobbyists to press for passage of the measure.

High Speed Rail On LaHood's A List

In a speech Tuesday at the National Retail Federation leadership conference, Transportation Secretary Ray LaHood repeatedly referred to the need for the United States to develop high speed intercity rail transportation, referring to the stimulus bill's $8 billion in seed money for these projects. In spite of funding difficulties, LaHood said he expects House Transportation and Infrastructure Chairman James Oberstar to produce a workable five year transportation reauthorization bill "pretty soon."

Meanwhile, Congressmen both on and off Oberstar's committee have noted a softening in the Chairman's stance regarding the posting of earmark requests on their websites. In a May 4 letter Oberstar and Ranking Member John Mica merely asked Congressmen to "please post requests for projects on their websites." Although all the earmark requests will ultimately be posted on Oberstar's committee website, the chairman refuses to set a deadline for individual members to post their requests on their own sites, and also refused to say he will disallow any earmarks not posted on individual Congressmen's sires before the legislation passes.

Climate Change Legislation Shuffles Forward

House Energy and Commerce Chairman Henry Waxman now predicts he will have the votes to sent to send a climate change bill to the House floor next week, following a closed door meeting of Democrats on the committee. Expect a draft of the bill Thursday and a markup beginning Monday. Apparently the bill will set a greenhouse gas emission reduction goal of 17% by 2020 and 83% by 2050. Cap and trade credits will be distributed 35% to electric utilities, 15% to heavy industry, with details still to be worked out regarding credits to refineries.

The bill will likely require 20% electric power production through a combination of energy efficiency measures and renewable power production by 2020, with 5% of that coming from efficiency measures, unless a state's governor certifies 15% renewable production is not possible in his or her state, in which case an additional 3% efficiency offset will be allowed. Further increase to 25% renewable/efficient energy by 2025 is also to be required. "Renewable" sources will most likely include energy from waste and biomass, but not nuclear energy. The compromise is to exclude existing nuclear facility power from the baseline for measuring the reductions.

On the Senate side, Energy and Natural Resources Chairman Jeff Bingaman is marking up plans for a new power transmission grid, facing 28 proposed amendments to his draft proposal, which will then become part of the cap and trade Senate bill originating in Barbara Boxer's Environment and Public Works Committee.

At a Chamber of Commerce energy forum today House Majority Leader Steny Hoyer and Interior Secretary Ken Salazar said the Obama administration is committed to a comprehensive energy program including coal, oil and nuclear power as well as renewable energy. Hoyer reminded the audience of business people that nuclear power and coal produce 85% of electrical power in this country. Senate Republican Conference Chairman Lamar Alexander of Tennessee reminded the same audience that wind and solar power are inefficient, expensive, occupy a large amount of space, and cannot be counted on to provide sufficient power during peak demand.

All of this legislative committee activity has certainly brought out the industry and environmental lobbyists on all sides of these issues. Statistical analysis shows Democrats on Waxman's 58 member committee who oppose the bill have receives on the average six times as much campaign money from industries emitting greenhouse gasses as those committee Democrats supporting the legislation. In the first quarter of 2009 industry interests have spent a total of nearly $80 million lobbying against cap and trade, with environmental groups spending $4.7 million pressing for passage, and the renewable energy industry adding another $7.5 million in support of the measure.

Stimulus Construction Funds Still In Washington's Till

Of the $787 billion appropriated in the American Recovery and Reinvestment Act, 94% is still in the till in Washington, D.C. Federal agencies have released a mere $45.6 billion, mostly in Medicaid payments to states and checks of $250 apiece to Social Security recipients. A mere $11 million has been released so far on highway projects, though promises of $10.5 billion in federal highway funds may have spurred states to start cutting checks to contractors for more than that $11 million.

It is clear the federal cash is flowing slower than molasses in January, though it's already the middle of May. Worse, more bureaucrats want a piece of the oversight pie. In a speech Tuesday to the U. S. Chamber of Commerce, Assistant Attorney General for Antitrust Christine Varney promised to "train officials at key agencies to look for 'red flags of collusion' before awarding stimulus grants and contracts." You mean, they don't already know how to do that?!

Tuesday, May 12, 2009

Surface Transportation Reauthorization Stalls As Revenues Plummet

While Congressional leaders agree that the $450 to $500 billion six year reauthorization of federal surface transportation funding is just what the economy needs to create jobs, major disagreements over where to get the money and how to spend it could doom all hope of getting reauthorization passed into law before the current funding expires September 30 this year. Receipts from fuel taxes to the federal highway trust fund continue to tumble as fuel prices stabilize at half last year's levels and people drive less. House Ways and Means Chairman Charles Rangel and Highways and Transit Subcommittee Chairman Peter DeFazio both oppose any increase in fuel taxes, and House Transportation and Infrastructure Chairman James Oberstar is backing off his advocacy of raising fuel taxes as well as imposing new taxes on vehicle miles driven.

Senate efforts toward reauthorizing legislation lag even further behind schedule, with Senator Mark Warner suggesting Monday at an infrastructure conference sponsored by the Department of Transportation and the Department of Commerce that "I'm not sure you are going to see a full transportation bill put out this year." Meanwhile, Texas Congressman Kevin Brady, Transportation Secretary Ray LaHood and Pennsylvania Governor Ed Rendell of Transportation For America are all pushing for major overhaul of the way highways and transit are funded. Congressman Brady proposes sunsetting the highway trust fund in 2011 while holding a national summit to develop new infrastructure plans.

Whatever construction funding was appropriated in the stimulus legislation may be all the cash the transportation sector of the construction economy will be seeing for a very long time.

Education Secretary Announces The Obvious

Acknowledging that most of the billions appropriated for education in the economic stimulus package will go to shore up education budget shortfalls in the 50 states, Education Secretary Arne Duncan said thousands of teaching jobs were saved by the measure at a Brookings Institution panel discussion Monday. Department adviser Mike Casserly said, "For those of you who may be looking for how school districts are spending all of their stimulus money ... you are not going to be able to find it yet because it just does not exist at the local levels." So much for transparency and accountability.

Push Me Pull You On Climate Change

With power plant, refinery, transmission grid and factory construction all hanging in the balance, the internal turmoil over climate change policy continues to fracture the Obama administration and Congress. USEPA proposes to regulate CO2 emissions by rulemaking, despite OMB's sharp criticisms of EPA's process and substance in that agency's finding that the gas is a health hazard. Meanwhile, the White House and Congress continue to insist that comprehensive climate change legislation, rather EPA rulemaking, is the way to go.

House Majority Leader Steny Hoyer and House Energy and Commerce Chairman Henry Waxman, still propose to get a bill out of committee before Memorial Day. A deal is in the works to reduce the greenhouse gas emission goal from 20% reduction by 2020 to only 14% reduction, with cap and trade credits going 35% to local electric utilities, 12% to energy intensive steel, aluminum, chemical and glass manufacturing, and 4% or less to the oil and gas producers. The Blue Dog caucus chimes in with a mandate to include nuclear, clean coal, biomass, hydroelectricity and heat from waste as "renewable" sources of electric power. The Blue Dogs also want any legislative renewable energy mandate to take into consideration regional disparities in availability of renewable resources.

Memorial Day is two weeks away.

Friday, May 8, 2009

Obama Budget Cuts Will Affect Few Construction Projects

President Obama has proposed $17 billion in cuts of "wasteful" programs in the details of his budget released earlier this week. While Republicans argue that the proposed cuts or elimination of 121 programs represent less that a fraction of 1% of the total budget, it seems the construction industry will be safe from major budget slashing. Two major water infrastructure construction programs will actually receive significant increases. The drinking water loan fund appropriation is proposed to increase from $829 million to $1.5 billion, and the clean water loan fund to increase from $698 million to 2.4 billion.

Meanwhile, legislators from West Virginia and Alaska are rising to the defense of two big federal highway construction projects Obama proposes to cut - $10 million for the Corridor H highway in West Virginia and $9 million for job training and construction of the Denali Access System in Alaska. Right now it looks like construction appropriations are reasonably safe from the budget knife in 2010.

Foreclosure Literally Destroys Brand New Homes In California

Guaranty Bank of Austin, Texas, foreclosed on 16 complete or nearly complete brand new houses in Victorville, California, northeast of Los Angeles. After evaluating the cost of completing construction so the houses could be sold, and looking at the fact that many of the new appliances had been stolen from the site and some of the houses had been occupied as drug dens or vandalized by illegal squatters, the bank decided that the only economical thing to do for the peace and safety of homeowners in the development was to tear down the unsold houses.

The $100,000 spent demolishing the houses was apparently far less that the million dollars the bank would have needed to invest to complete and sell the homes, so now they are gone. Ouch!

House Committee Approves $20 Billion Green Schools Initiative

Making up for the deletion of an important program which had been originally included in the Obama administration's economic stimulus legislation, Wednesday the House Education and Labor Committee voted out a bill appropriating $20 billion over the next five years for construction to improve the energy efficiency of school buildings across the country. On a largely party line vote of 31-14, the panel passed the construction program for improving safety, health and energy efficiency of public school buildings, with $6.4 billion to be spent in fiscal 2010. According to Education and Labor Chairman George Miller, "This legislation presents us with a vital opportunity to help boost student achievement, enhance teachers' effectiveness, generate savings for schools and create good jobs, all at once."

Bricks And Mortar Lose Half A Percent

Wednesday the House Oversight and Government Reform Committee approved a bill permitting state and local governments to divert 0.5% of their stimulus construction appropriations from funding projects to "protect against wasteful spending," meaning the hiring of more government employees to record and report on how the cash is spent. When was the last time hiring more government employees to prevent fraud and waste actually prevented any fraud or waste?

Big Players Missed At Broadband Hearings

House Energy and Commerce Communications Subcommittee Chairman Rick Boucher noted Thursday the conspicuous absence of AT&T and Verizon from his hearing on competition in the cellular business, further complicating the effort to get the $7.2 billion broadband expansion program funded in the economic stimulus bill off the ground. Boucher is contemplating legislation making it easier for consumers to switch carriers without buying a new cell phone, and to guarantee that wireless internet traffic can freely roam on and off the networks of competing carriers.

Meanwhile, FTC Chairman Jon Leibowitz announced Wednesday at a conference of the Computer and Communications Industry Association in Washington, D.C. that his agency plans to take a bigger role in ensuring an open internet. We can only hope that these industry/agency battles don't create too much more delay in groundbreaking for the construction work funded by this appropriation.

Informal Meetings Soften Waxman Leapfrog Threat

House Energy and Commerce Committee Chairman Henry Waxman met Thursday with Congressman Rick Boucher to talk over how the proposed carbon emission cap and trade rules will impact the manufacturing and coal mining sectors of the economy, and also with Congressman G. K. Butterfield to discuss proposed renewable electric power production mandates. Afterwards, Waxman softened his stance against a subcommittee markup of the American Clean Energy and Security Act of 2009, saying "if we have a subcommittee markup it would be very limited ..."

On the other side of the Capitol, Senate Foreign Relations ranking member Richard Lugar spoke out against USEPA's proposed calculation of Brazilian rain forest deforestation into the carbon effects of American corn based ethanol, even though Heather Zichal, Obama's deputy assistant for energy and climate change, promised on Wednesday that EPA will conduct peer reviews of its analysis before final rulemaking on corn based ethanol. Lugar, former Senate Agriculture Committee Chairman, said: "That we are responsible as corn farmers for cutting down trees in Brazil is ridiculous and outrageous." Senate Energy and Natural Resources Chairman Jeff Bingaman is delaying his committee work on permanent nuclear waste disposal sites and new electricity transmission grid locations, further delaying the actual construction of power production projects.

Bingaman is also still in negotiations with Senator Debbie Stabenow of Michigan, Evan Bayh of Indiana and Blanche Lincoln of Arkansas over renewable electric power mandates in the Senate version of climate change legislation.

Wednesday, May 6, 2009

Waxman Threatens Subcommittee Leapfrog To Speed Energy Policy Bill

Though Democrat members of the Energy and Environment Subcommittee of the House Energy and Commerce Committee spent an hour in the Oval Office with President Obama Tuesday trying to iron out regional energy policy differences, Chairman Henry Waxman says he may skip over the subcommittee and take the legislation directly to the entire Energy and Commerce Committee for a markup next week. "I'm still holding firm on my deadline of getting a bill out of the committee by the end of May," Waxman said, "and I believe that will probably require us to go right to the full committee and bypass the subcommittee." Waxman would not commit to a deadline for releasing the pre-markup text of the bill, entitled American Clean Energy and Security Act of 2009.

Congressman Rick Boucher of Virginia, who attended the meeting of subcommittee members with President Obama, Vice President Biden, National Economic Council Chairman Larry Summers and White House Chief of Staff Rahm Emanuel, said compromise among various factions is still needed on the time schedule for CO2 emissions reduction, allocation of carbon cap and trade credits, wind and solar power mandates, and identification of activities which can be used to offset emission reduction requirements. Speaking on the depth of state to state differences on such issues, Boucher emphasized the need for regional balance so as not to disadvantage states which rely heavily on coal, oil and gas fired power production.

Describing the meeting with President Obama, Congressman Jay Inslee of Washington said the President "told us sometimes we do things of real impact, and none of us would want to look back in twenty to thirty years and think we had punted on something of a historic nature."

Broadband Construction Grant Guidelines Due This Summer

Speaking Tuesday at a wireless telecommunications conference, Bernadette McGuire-Rivera, Associate Administrator of the National Telecommunications and Information Administration at the Commerce Department, and David Villano, Assistant Administrator of Telecommunications Programs at the Department of Agriculture, both announced that their agencies' guidelines for disbursing the $7.2 billion appropriated in the stimulus legislation for broadband expansion in underserved and underserved areas of the United States will be issued this summer. Villano promised USDA guidelines by June 30, but McGuire-Rivera would only commit Commerce to "sometime this summer."

It remains to be seen whether broadband service purveyors will be interested in applying for grant funding once the guidelines are released. Industry leaders have been saying they don't want the funds if restrictions on their network expansion connected with the appropriated money are too onerous from their point of view.

Tuesday, May 5, 2009

They Can't Even Agree On What to Call It

President Obama held an hour long meeting with Congressional Democrats Tuesday to discuss the lack of progress of energy and climate change policy legislation through the Henry Waxman's House Energy and Commerce Committee. Variously styled as "clean energy," "global warming" and "climate change" legislation, Obama and Waxman want a bill marked up and out of the Committee to the House floor by Memorial Day, expecting that such a calendar will permit Senate, Conference Committee and final floor action so Obama can sign the bill before the end of this year. Maybe they're all trying to accomplish too much in a single piece of legislation.

Representative John Dingell of Michigan says differences over the "cash for clunkers" provisions of the legislation have been worked out, but he declined to provide details, saving up the chips against possible trade offs on other controversial provisions. Still being fought along regional lines are battles over carbon credit cap and trade provisions, whether the carbon footprint of corn based ethanol fuels must take into consideration rain forest destruction the world over for cropland creation, moves to amend the 2007 renewable fuel mandate of 36 billion gallons by 2022, a 50% emission reduction requirement for biodiesel oil, a 60% emission reduction requirement for cellulosic ethanol fuels, renewable electric power mandates, the potential for investment in "clean coal" technology, and whether nuclear power plants are or are not producing "renewable energy." And, routing of new transmission lines for wind, solar and hydroelectric generated power remains yet another bureaucratic battleground.

Meanwhile, Democrat Congressman Neil Abercrombie of Hawaii, who isn't even on the Energy and Commerce Committee, along with a gaggle of Republican Congressmen, is offering alternative energy policy legislation to permit oil and gas drilling in federal waters as close as 20 miles offshore, with revenue sharing 10% to the U. S. Treasury, 20% to pay for renewable energy development, 10% for clean coal technology, and 2% for low income energy assistance. Other requirements involve federal fleet purchase of hybrid vehicles and other advanced transportation technology initiatives.

So, while our esteemed government delegates duke it out over energy policy, no one is designing or building the new power generation facilities and transmission lines to deliver much needed electric power to the cities, towns and rural areas which need it to avoid another summer of brownouts and blackouts, and skilled electricians sit in line on benches in the union halls waiting for such projects to ramp up.

Fairness In Arbitration Bill Gets Judiciary Hearing

Representative Hank Johnson of Georgia reintroduced the Fairness In Arbitration bill in the House Judiciary Committee, which held hearings Tuesday on the provision eliminating arbitration clauses from home building, credit card and other "consumer" contracts. Democrats love the idea, and Republicans on the committee spoke out against the need for such provisions. No calendar was established for advancing the legislation in the House.

The U. S. Treasury Is Officially The Mother Of Us All

For the first time in American history, the United States Treasury provides a larger share of revenue to the 50 states and their local units of government than any other single revenue source, including sales taxes, property taxes, and state and city income taxes. Overall state and local government revenues are up 1.6% this year, despite a 2.9% drop in total state and local tax collections. The difference came from federal stimulus appropriations.

Sales tax revenues are down because people are shopping less often and spending less when they do, crashing real estate values are driving down property tax revenue, and state and local income tax revenue has fallen dramatically as more and more workers are forced to take pay cuts, or furloughs, or get laid off completely in this economic crisis. States and cities are also sending out staggering income tax refunds to workers laid off during 2008. Does Nero's fiddle even have strings any more?

Monday, May 4, 2009

Power Grid "Cybersecurity" Measures Facing Congressional Turf Battles

Competing and conflicting bills aimed at beefing up the safety of our mostly computer controlled power generation and distribution facilities in the United States is being discussed in the House Homeland Security Committee, the Senate Homeland Security Committee, the House Energy and Commerce Committee, the Senate Commerce Committee, and the Senate Energy and Natural Resources Committee. Unless Representatives Bennie Thompson, Peter King, Henry Waxman, Edward Markey and John Barrow can quickly resolve their differences with Senators Joseph Lieberman, Jay Rockefeller and Thomas Carpenter, in the jurisdictional turf battle over which Committee has the drafting authority over this legislation, any new construction of power plants and transmission lines is like to be delayed even further than it is already being held up by disputes respecting authority over power transmission line routing.

Stewart Baker, a Bush administration bureaucrat who served in both the Homeland Security Department and NSA, fears that executive branch turf wars are spilling over into Congressional committees regarding the power grid cybersecurity issue. Baker4 commented: "Devoting all of our attention to fighting about the arrangement of the seats at the table is not going to be productive."

Coal's Glow Fades At The Capitol

Acting Architect of the Capitol Stephen Ayers tells Speaker Pelosi and Senate Majority Leader Reid that as of now the Capitol Building will use only natural gas to fire its heating boilers and water heaters, unless, of course, there is a cold spell or the capacity of the gas pipeline feeding the Capitol Building is exceeded, in which the coal fired boilers are still in place as a back up system. Cost of the switch over: $7 million.

Reid says the switch shows "that the House and Senate are leading by example in reducing our emissions." Pelosi says the power plant is moving "from the 19th century to the 21st century." Wait a minute, doesn't burning natural gas to produce steam heat and hot water still generate tons of CO2 emissions?

Friday, May 1, 2009

SBA Bill Supports Developing "Green Entrepreneurs"

The House Small Business Rural Development, Entrepreneurship and Trade Subcommittee yesterday approved a series of bills which will expand SBA programs for green entrepreneurship. Congressman Aaron Schock sponsors a bill authorizing $310 million for the Small Business Development Center to fund courses in energy efficiency and green technology. Another bill, sponsored by Congressman Vern Buchanan funds a volunteer program for retired executives and small business owners to counsel small business startups. A third bill sponsored by Congressman Mary Fallin provides $42 million over two years to fund SBA women's business centers.

Highway Reauthorization Stalls Over Funding

Despite the statements by House Transportation and Infrastructure Chairman James Oberstar, Ranking Member John Mica, Highways and Transit Subcommittee Chairman Peter Fazio and Ranking Member John Duncan that the four have agreed on the "major parameters of a surface transportation reauthorization bill which they hope will total between $450 and $500 billion for highways and mass transit, they can't agree on where the money will be coming from. Oberstar wants to increase fuel taxes, but increases in gas and diesel taxes are opposed by Mica and Transportation Secretary Ray LaHood. Although Oberstar promises passage of a bill in June, the dispute over fuel taxes versus mileage taxes as a funding mechanism makes that prediction optimistic. Current funding legislation expires at the end of September.

Energy Policy Difficulties Put Power Plant Construction On Hold

The Navajo Nation planned to build a 1,500 megawatt coal fired power plant on its reservation in New Mexico, and expected to earn $50 million per year from sales of electric power produced by the new facility. Earlier this week the Obama administration's EPA Administrator Lisa Jackson moved to revoke the project's permit and block construction of the plant. John Walke, EPA's Clean Air Director, says the move was closely coordinated with the White House as part of President Obama's agenda to combat global warming. U. S. Chamber of Commerce Vice President for the Environment William Kovacs says there are between 60 and 70 power plant construction projects stalled by EPA permit issues.

Meanwhile, the debate over proposed cap and trade legislation limiting CO2 emissions, and over FERC authority to establish routing of new power transmission grid lines stalls legislation which will let the construction of new technology power generation facilities move forward. Finally, the debates over whether hydroelectric power plants and nuclear reactor generated power do or do not count as "renewable energy" production are delaying groundbreaking of facilities for power production using those modalities. Unless Congress and the related executive agencies can get their acts together, there won't be any new power plants or transmission lines built using either new or old technologies any time soon.

Homeland Security Department IG Investigation Delayed

Homeland Security's Inspector General told congress this week that it won't be until August that an investigation into alleged improprieties in the site selection of Kansas State University for the $720 million high containment biodefense lab facility can begin, due to the demands of other Congressional requests for information from the Homeland Security Department. Between the federal lawsuit filed last week and this delay in internal investigation, a lot of Kansas trade contractors will be sitting on their shovels this summer.