Defense bill raises conflicts

House lawmakers are backing away from a modest effort to curb greenhouse gas emissions despite an outcry from environmental groups, highlighting the difficulty Congress may face as it debates a much more sweeping measure to address global climate change.

Last month, the House passed an amendment weakening restrictions on government purchases of alternative or synthetic fuels whose lifecycle greenhouse gas emissions are higher than conventional petroleum-based fuels. Those restrictions were included in Section 526 of the Energy Independence and Security Act of 2007 in response to efforts by the Air Force to develop transportation fuels from coal.

{mosads}“The amendment enables government agencies to better facilitate use of important unconventional fuel, such as oil sands from Canada,” said Scott Segal, a lobbyist at Bracewell & Giuliani who represents oil refiners and a group of electric utilities.

Rep. Dan Boren (D-Okla.) introduced the amendment as part of the fiscal 2009 Defense Authorization Act. Sen. James Inhofe (R-Okla.) plans to try to add similar language to the Senate’s defense bill.

Critics say the change would encourage the development of fuels that actually raise greenhouse emissions at a time when policymakers are debating ways to curb global warming.

Boren’s measure allows the military and other federal agencies to purchase fuel without requiring them to investigate where the petrol came from “upstream.” Environmentalists say the change could negate the Section 526 provision that blocks the U.S. government from buying unconventional fuels with higher lifecycle greenhouse gas emissions.

The 2007 energy bill passed last December with broad bipartisan support, but Section 526 has been the subject of heated debate on Capitol Hill and in the administration over the past few months.

Canadian government officials, in particular, have lobbied to repeal the provision because it would likely block the U.S. government’s purchase of oil extracted from oil sands in Alberta.

“Classifying fuel from the oil sands as non-conventional fuel would unnecessarily complicate the integrated Canada-U.S. energy relationship,” said Tristan Landry, a spokeswoman for the Canadian Embassy. “This would in turn have unintended consequences for both countries.”

Environmentalists backed Section 526 as a modest victory in their campaign to curb global warming because the government is the single largest gasoline purchaser in the United States.

Recovering crude oil from oil sands emits three times the amount of lifecycle greenhouse gas emissions compared to producing conventional petroleum wells. Turning coal into a transportation fuel is estimated to produce twice the lifecycle greenhouse gas emissions compared to developing conventional fuel.

“The idea that you would shift to liquid coal on the basis of global warming and then not require strict standards is disingenuous and extreme,” said David Hamilton, director of the global warming and energy program for the Sierra Club.

Senators have spent this week debating a much more sweeping global warming legislation that seeks to cut greenhouse gas emissions in the United States by 70 percent by 2050.

A broad coalition of environmentalists, pension fund managers, farmers, labor advocates and others back the bill, which was crafted by Sens. Barbara Boxer (D-Calif.), Joe Lieberman (I-Conn.) and John Warner (R-Va.).

But the measure also has engendered significant opposition, from mine workers, coal producers, some utilities, airlines and manufacturers. Senate Republicans used the debate to score political points by stressing that the climate bill would likely further raise already high fuel costs. Most observers believe the bill was unlikely to pass this year.

The debate over Section 526 similarly underscores the conflicts among three main energy policy goals of reducing greenhouse gases, lowering fuel prices and improving U.S. energy security.

Segal said Section 526 could actually raise greenhouse gas emissions.

“If you have a policy which says the U.S. military could not purchase jet fuel derived from oil sands, then the petrol that’s derived from that sand just goes somewhere else,” Segal said.

“The irony is, you’d have carbon emissions associated with this production, and then you’d have to ship it to Asia, causing an even greater release of carbon because of the transportation.”

Moreover, Segal argues that Section 526 would prevent the military from getting its energy supplies from a friendly neighbor instead of from less-friendly places like Venezuela and countries in the Middle East.

Proponents of Section 526 do not argue that the measure will solve global warming, only that it is one way to discourage the development of fuel sources that would worsen the problem.

Section 526 “is really meant to stop the government from wasting U.S. taxpayer dollars on expanding fuel that would make global warming worse,” said Susan Casey-Lefkowitz, a senior attorney for the Natural Resources Defense Council.

Global warming, Section 526 supporters also point out, is itself a national security threat because it could destabilize areas of the world hit hardest by drought and other weather-related disasters.

“When you look at real security threats, one of the biggest ones we’re facing is global warming, and that’s something that different members of the military have been speaking out on more and more,” said Casey-Lefkowitz.

The Defense Department is the largest single consumer of energy in the United States, using about 340,000 barrels per day, equal to 1.5 percent of the total energy consumption in the United States.

More and more of that fuel comes from Canada, which ranks second after Saudi Arabia in terms of global proven crude oil reserves, holding 14 percent of the world’s reserves. Canada’s share of the U.S. oil supply is increasing in large part because of oil sands production in Alberta. In 2006, Alberta exported about 1.35 million barrels per day of crude oil to the United States, supplying 13 percent of U.S. crude oil import.

The Air Force currently spends $2.6 billion on jet fuel a year, which is 10 percent of the entire domestic market for aviation fuel.

Although the Air Force is interested in new fuel sources, Gary Strasburg, its chief of environmental affairs, said the service is intent on lowering its greenhouse gas emissions. For example, the service could require that carbon emissions created by turning coal into liquid fuel are captured and stored underground. Supporters say the amendment seeks to clarify the emissions standards that unconventional fuels would be measured against under Section 526.

“We’re continually trying to do what we can do to reduce our footprint,” Strasburg said.