Will the New Climate Bill Damage US Energy Security?

Not when you run the numbers. (Sorry, Chamber of Commerce.)

Few groups have been more strident in their opposition to cap-and-trade legislation than the U.S. Chamber of Commerce. Last year, four prominent members of the powerful business lobby, including Exelon Corp. and Pacific Gas & Electric, quit on account of its obstructionist approach to climate policy. When some activists announced, in a prank press conference, that the chamber would throw its weight behind an ambitious climate bill, the group responded with a lawsuit.

In arguing against cap-and-trade, the chamber has repeatedly advanced the notion that such legislation would harm U.S. energy security in some fashion or another. So last month, when the chamber’s Institute for 21st Century Energy announced that it had created a comprehensive new index of “Energy Security Risk”—a tool designed “to track shifts in U.S. energy security over time and assess potential impacts of new policies”—we wondered whether its calculations might be applied to the most recent energy and climate change policy proposals. In other words, what would the chamber’s own definition of energy security say about the cap-and-trade bills the group so consistently opposes?

To find out, we ran the numbers on the clean energy and climate change bill unveiled by Sens. Kerry and Lieberman last month. We found that, according to the chamber’s own definition of energy security risk, the bill would help America, nearly across the board.

Energy security is notoriously difficult to define and thus serves as the perfect weapon for attacking legislation: Just pick a bill, find a random but scary-looking detail (higher electricity prices!), and then claim that it will put the homeland in danger. This is an established tool in the chamber’s arsenal. The group’s Web site declares that it “will work to discourage ill-conceived climate change policies and measures that could severely damage the security and economy of the United States.”

Now the chamber’s new “Index of U.S. Energy Security Risk” assigns some firm numbers to a slippery concept. It combines 37 factors that measure how our energy use affects the economy and national security. For example, one determines the security of global oil supplies by looking (in part) at whether oil is being produced in countries with free or repressive governments; another measures how much energy the United States uses to produce a dollar of GDP; a third evaluates the diversity of the U.S. power plant fleet, since greater variety tends to make us more resilient to unexpected events.

With these definitions in hand, we now have a way to calculate what the chamber should really think about the Kerry-Lieberman bill. How would cap-and-trade affect these 37 factors and the country’s energy security risk? In 2009, the group’s index was at 83.7. (Higher scores indicate greater risk.) The chamber predicts how the index will evolve in the future by using projections from the Department of Energy’s 2009 Annual Energy Outlook, along with some related data from another U.S. government publication. In the absence of any new U.S. policies, they say, the index will rise by 18 percent between today and 2020—from 83.7 to 98.8—before declining slightly through 2030.

We started our own work by making sure we could reproduce the chamber’s predictions using from the Annual Energy Outlook data that they reference in their report. It took some careful calibration to match the chamber’s numbers, but we ultimately achieved better than a 99 percent match. Having validated our approach, we then simulated the effect of the Kerry-Lieberman bill on U.S. and global energy systems over the next two decades using the same modeling system that the government uses to produce the Annual Energy Outlook. (A complete analysis of the bill can be found here. Extensive detail on our methods and assumptions in applying this analysis to the chamber’s index, and complete results, can be found here.)

Our simulations show a marked decrease in U.S. energy security risk under the Kerry-Lieberman bill. Passage of the proposed legislation would slow the initial increase in the risk index predicted by the chamber, and by 2030, the risk index would be at least 8 percent lower than it would be otherwise.

There is no single reason why the bill delivers this result, but there are a few critical factors. Kerry-Lieberman would encourage people to conserve energy, which would reduce U.S. exposure to volatile global oil and gas markets; it would boost production of alternative energy (including nuclear power); and it would cut U.S. emissions, making the United States less vulnerable to international environmental pressure. The chamber measures energy security risk in four dimensions: geopolitics, economics, the environment, and the reliability of energy supplies. (The overall index is a combination of these.) Kerry-Lieberman wins on every count, with geopolitical risk falling 7 percent, economic and reliability risk each dropping 5 percent, and environmental risk declining by a whopping 19 percent.

To be sure, not everything comes out rosy. Four of 37 security factors get worse with the bill: energy expenditures per unit GDP, energy expenditures per household, retail electricity prices, and security of world natural gas production. That’s because most energy would become a bit more expensive under cap-and-trade, and because U.S. natural gas production would decline slightly under the bill. On the other hand, energy security would improve for 19 factors, including measures as varied as crude oil prices (down 5 percent), the diversity of U.S. power plants (way up because of more nuclear and renewable energy), and the security of U.S. natural gas imports (which would drop to zero by 2030).

Indeed, our analysis likely underestimates the bill’s virtues. Take just one example: Among the chamber’s 37 energy security factors is a measure of federal spending on energy and science research and development—the greater the spending, the lower the energy security risk. The chamber assumes that such spending will never increase. The Kerry-Lieberman bill, though, devotes $4 billion per year between 2013 and 2030 to precisely that purpose. Had we included that change, we would have predicted an even lower energy security risk with the bill. Moreover, on a few occasions, we could not precisely reproduce the chamber’s methods, since some parts of the U.S. government models they rely on are confidential; in each of those cases, we made sure to underestimate the value of the bill. Finally, our modeling of the Kerry-Lieberman bill assumes no improvement in efficiency standards for cars and trucks beyond the increase currently scheduled through 2016, despite language in the bill directing the administration to continue ratcheting up those standards in the years ahead.

When Sens. Kerry and Lieberman introduced their bill last month, the chamber surprised many observers by announcing that it would carefully study the legislation before pronouncing judgment. It also laid down an important marker: “It will be critical,” the group noted in a press release, “to determine how this bill will impact a broad range of industries as well as America’s energy security.” The new index is not the only way to measure energy security risk. But if the chamber believes in its own system, it should stop warning of the dangers of cap-and-trade and start touting the security benefits that Kerry-Lieberman would bring to America.

This story was produced by Slate as part of the Climate Desk collaboration.

More Mother Jones reporting on Climate Desk

WE'LL BE BLUNT

It is astonishingly hard keeping a newsroom afloat these days, and we need to raise $253,000 in online donations quickly, by October 7.

The short of it: Last year, we had to cut $1 million from our budget so we could have any chance of breaking even by the time our fiscal year ended in June. And despite a huge rally from so many of you leading up to the deadline, we still came up a bit short on the whole. We can’t let that happen again. We have no wiggle room to begin with, and now we have a hole to dig out of.

Readers also told us to just give it to you straight when we need to ask for your support, and seeing how matter-of-factly explaining our inner workings, our challenges and finances, can bring more of you in has been a real silver lining. So our online membership lead, Brian, lays it all out for you in his personal, insider account (that literally puts his skin in the game!) of how urgent things are right now.

The upshot: Being able to rally $253,000 in donations over these next few weeks is vitally important simply because it is the number that keeps us right on track, helping make sure we don't end up with a bigger gap than can be filled again, helping us avoid any significant (and knowable) cash-flow crunches for now. We used to be more nonchalant about coming up short this time of year, thinking we can make it by the time June rolls around. Not anymore.

Because the in-depth journalism on underreported beats and unique perspectives on the daily news you turn to Mother Jones for is only possible because readers fund us. Corporations and powerful people with deep pockets will never sustain the type of journalism we exist to do. The only investors who won’t let independent, investigative journalism down are the people who actually care about its future—you.

And we need readers to show up for us big time—again.

Getting just 10 percent of the people who care enough about our work to be reading this blurb to part with a few bucks would be utterly transformative for us, and that's very much what we need to keep charging hard in this financially uncertain, high-stakes year.

If you can right now, please support the journalism you get from Mother Jones with a donation at whatever amount works for you. And please do it now, before you move on to whatever you're about to do next and think maybe you'll get to it later, because every gift matters and we really need to see a strong response if we're going to raise the $253,000 we need in less than three weeks.

payment methods

WE'LL BE BLUNT

It is astonishingly hard keeping a newsroom afloat these days, and we need to raise $253,000 in online donations quickly, by October 7.

The short of it: Last year, we had to cut $1 million from our budget so we could have any chance of breaking even by the time our fiscal year ended in June. And despite a huge rally from so many of you leading up to the deadline, we still came up a bit short on the whole. We can’t let that happen again. We have no wiggle room to begin with, and now we have a hole to dig out of.

Readers also told us to just give it to you straight when we need to ask for your support, and seeing how matter-of-factly explaining our inner workings, our challenges and finances, can bring more of you in has been a real silver lining. So our online membership lead, Brian, lays it all out for you in his personal, insider account (that literally puts his skin in the game!) of how urgent things are right now.

The upshot: Being able to rally $253,000 in donations over these next few weeks is vitally important simply because it is the number that keeps us right on track, helping make sure we don't end up with a bigger gap than can be filled again, helping us avoid any significant (and knowable) cash-flow crunches for now. We used to be more nonchalant about coming up short this time of year, thinking we can make it by the time June rolls around. Not anymore.

Because the in-depth journalism on underreported beats and unique perspectives on the daily news you turn to Mother Jones for is only possible because readers fund us. Corporations and powerful people with deep pockets will never sustain the type of journalism we exist to do. The only investors who won’t let independent, investigative journalism down are the people who actually care about its future—you.

And we need readers to show up for us big time—again.

Getting just 10 percent of the people who care enough about our work to be reading this blurb to part with a few bucks would be utterly transformative for us, and that's very much what we need to keep charging hard in this financially uncertain, high-stakes year.

If you can right now, please support the journalism you get from Mother Jones with a donation at whatever amount works for you. And please do it now, before you move on to whatever you're about to do next and think maybe you'll get to it later, because every gift matters and we really need to see a strong response if we're going to raise the $253,000 we need in less than three weeks.

payment methods

We Recommend

Latest

Sign up for our free newsletter

Subscribe to the Mother Jones Daily to have our top stories delivered directly to your inbox.

Get our award-winning magazine

Save big on a full year of investigations, ideas, and insights.

Subscribe

Support our journalism

Help Mother Jones' reporters dig deep with a tax-deductible donation.

Donate