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Fiscal Cliff Deal Reached, Clean Energy Not Forgotten

After months of negotiating, lawmakers in Washington, D.C., reached an agreement to avoid the so-called “fiscal cliff.” Featured in the measure is an extension of a renewable electricity production tax credit for wind, geothermal and some biomass projects, which gives credit for each kilowatt-hour of energy they produce.

Highly contested prior to the bill’s passing was the credit’s impact on the wind industry. The credit, which offers 2.2 cents per kilowatt-hour of wind power production, had already expired when the deal was reached Tuesday. Its pending expiration had resulted in layoffs at United States turbine parts manufacturing plants as developers placed new projects on hold, though wind-turbine installations are predicted to exceed natural gas fueled power plants in the U.S. this year.

The tax credit has been expanded to cover wind projects that begin construction in 2013not only projects that are up and running. Lawmakers also extended credits for residential energy efficiency improvements, plug-in vehicles, energy-efficient new home construction and the production of various biofuels—including one that treats algae as a qualified feedstock.

Then, there are a few smaller items some might have missed in the new law. Among them: a $2-per-ton subsidy for coal produced on Native American lands and a credit for electric scooters. Also, electric and natural gas industries kept dividend tax rates on par with capital gains taxes.

Climate Records, Missteps

Even as many cities tied or broke weather records in 2012, climate-related coverage in the press waned, according to independent data collected by the nonprofit The Daily Climate. In fact, it dropped 2.4 percent from 2011. Among the surprises: stories linking climate change to weird weather and sea-level rise were up.

On Jan. 1 California looked to its own climate record when it began enforcing its cap-and-trade program, AB32—the first of its kind in the nation. If the program is deemed successful—cutting pollution without harming the economy, The National Journal reports, “there is every reason to think that it will pave the way for more state and national action on climate change.” The Washington Post worries about a number of things that could go wrong with the program. Among them is the issue of “leakage”—decreased emissions within California but increased emissions in other states.

The announcement of U.S. Environmental Protection Agency (EPA) Administrator Lisa Jackson’s departure is expected to refocus attention on the Obama Administration’s direction on issues such as climate change and energy strategy. Among one of the most immediate: legal challenges as regulators prepare to release final rules limiting carbon dioxide emissions from power plants under the Clean Air Act. The agency may also face legal challenges from environmental groups who want it to propose air pollution standards for oil and gas drilling. EPA Deputy Administrator Robert Perciasepe is expected to fill Jackson’s shoes, at least temporarily. Steven Cohen argues in The Huffington Post that the EPA, under any leadership, must make “the leap from environmental protection to environmental and economic sustainability.”

Energy Boom, Arctic Drilling Perils

Even amidst a drilling boom, ThinkProgress reports Americans paid more for gasoline in 2012—on average roughly nine cents more than in 2011. Tensions with Iran and refinery constraints were cited as factors in the increase. In 2013, AAA predicts prices to remain high—just not as high as in 2012.

Meanwhile, an oil rig that ran aground off the coast of Alaska has renewed debate about Shell’s plans to drill in the Arctic this summer. This accident is the latest in a string of issues Shell has faced in its efforts to drill in the region. While the vessel was carrying more than 100,000 gallons of petroleum products, there has been no indication of a leak. As work to remove the rig continues, the web is abuzz with speculations about what this could mean for the future of Arctic drilling.

The Climate Post offers a rundown of the week in climate and energy news. It is produced each Thursday by Duke University’s Nicholas Institute for Environmental Policy Solutions.