The Cap-and-Trade Disaster and the New Jersey GOP

The legendary sports journalist, Jimmy Cannon of the now defunct New York Journal-American said of Howard Cosell: “His real name is Howard Cohen, he wears a toupee, and he claims to tell it like it is.”

Of Leonard Lance, it may similarly be said:  He voted as a state Senator to reappoint Deborah Poritz as Chief Justice of the Supreme Court, he voted as a member of the U.S. House of Representatives for the Democrat cap-and-trade proposal on greenhouse gases, and he claims to be a mainstream Republican.

The greenhouse gas cap-and- trade program, known as the American Clean Energy and Security Act of 2009 (ACESA), passed last Friday by the U.S. House of Representatives with the vote of Leonard Lance, is, plain and simple, a bill that is both economically destructive and environmentally grossly ineffective.  Hopefully, the bill will never come to a vote in the Senate.  But who knows?

The irony is that Republicans, including myself, are usually strong advocates of environmental cap-and-trade programs.  In fact, the idea of cap-and-trade programs was originally a conservative Republican innovation, proposed as an amendment to the Clean Air Act and signed into law by President George H.W.  Bush in 1990.  This concept was later adopted by President Bill Clinton and Vice President Al Gore when they enacted the highly successful acid rain cap-and-trade program in 1995, focussing on capping sulfur dioxide (SO2) emissions.  

The administration of President George W. Bush similarly enacted in 2005 the Clean Air Interstate Rule (CAIR), a combination cap-and-trade and state enforcement program designed to significantly reduce SO2 and nitrogen oxide (NOx) emissions from power plants in the eastern United States.  By reducing S02 and NOx emissions, the presence of ozone (smog) and fine particles (soot) in the air will likewise be largely eliminated.

A genuine greenhouse gas cap-and-trade program designed along the lines of the acid rain and CAIR programs, accompanied by a strong nuclear power incentive plan is a package Republican House and Senate members could and should vote for.  In order for America to meet President Obama’s goal of 80 percent reduction in greenhouse gases by 2050, nuclear power plants, which do not emit greenhouse gases or pollutants will have to be increased by 80 percent.  Since nuclear power is a proven technology, the federal government would only have to make a budgetary set-aside of roughly $200 million to enable the Department of Energy to increase the nuclear power loan guarantee program by an additional $200 billion from the current $18.5 billion.

These loan guarantees would substantially reduce the debt service on the construction of nuclear plants and thereby significantly lower the cost of nuclear power to the consumer.  In fact, the operational cost of a nuclear power plant is already relatively low, due to the low cost of uranium.  The construction of these new plants would also stimulate the economy, creating a multitude of construction jobs.  Thus, a genuine cap-and trade greenhouse gas program, combined with expansion of nuclear power, would result in a massive reduction in greenhouse gases, cleaner air, more jobs, and more affordable energy for both consumers and business.

It is no wonder that a partisan Democrat governor from the very blue state of Maryland, Martin O’Malley has described the expansion of nuclear power as "a moral challenge and moral imperative."  Obama’s own Energy Secretary, Steven Chu is a strong advocate of nuclear energy as a necessary component of a strategy to attain clean air and forestall global warming.  Yet in every speech he has given to an American audience since his inauguration, Obama has conspicuously ignored making any mention of nuclear power as part of a “clean energy strategy.”

Instead, he has left to the Congressional Democrats the task of creating a clean energy/ climate control program.  Consequently, the House Democrat ACESA sponsors, Henry Waxman (D-California) and Edward J. Markey (D-Massachusetts) have created with this legislation an environmental and economic catastrophe that actually discriminates against nuclear power and increases energy costs.  Indeed, 44 Democrats House members voted against ACESA.  The mystery is why eight Republican House members, including three members from New Jersey, to wit, Lance, Frank LoBiondo, and Chris Smith voted for this measure.

The major defect in ACESA is the creation of a “Renewable Electricity Standard” for all electric power companies supplying over 4 million MWh.  This is the first time such a standard has been created in any federal cap-and-trade program.  A baseline is created for each such company, and 20 percent of this baseline production must be produced from “renewable sources.”  While the term “renewable’ is defined as including wind and solar sources, nuclear power and hydropower are excluded, in spite of the fact that both the latter are zero-emission sources of power.

This exclusion of nuclear power constitutes both economic and environmental lunacy.  While a company’s new nuclear facilities are not added to the baseline, they also do not count as renewables for the 20 percent renewable requirement.

This exclusion of nuclear power from the “renewables” definition will have highly negative economic consequences for New Jersey ratepayers and businesses.  Currently, less than one percent of all electricity in New Jersey is produced from solar and wind facilities.  Solar and wind energy are far more expensive per unit of energy production than nuclear.  If solar and wind are produced to meet the 20 per cent ACESA Renewable Electricity Standard, the cost to the power company in question will be enormous, and it will be passed on to the consumers and business customers.

Even more so, there is a significant environmental disadvantage resulting from the utilization of solar and wind to meet the 20 percent Renewable Electricity Standard rather than nuclear.  While nuclear plants run 24 hours per day, solar and wind facilities are obviously non-operational when there is no sun and no wind, respectively.  During these non-operational periods, there must be a back-up source of power.  If the back-up source is coal or natural gas, then the air will receive the emissions of SO2, NOx, and greenhouse gases from these sources, creating a negative environmental and climate effect.

Moreover, if an unexpected sun and/or wind change occurs, the power company might have to make emergency purchases of natural gas at high spot market peaking rate prices for its back-up facility.  This additional cost will likewise be passed on to consumers and businesses.

I am puzzled as to why Lance, Smith, and LoBiondo would vote for legislation that is so negative on nuclear power.  It is noteworthy that when Pennsylvania established a renewable portfolio requirement for power companies within its boundaries, Democrats Governor Ed Rendell and Environmental Commissioner Katie McGinty (who served as Chair of the Clinton White House Council on Environmental Quality) included nuclear power as a qualifying renewable.  If nuclear power qualified as a renewable in Pennsylvania, then one must ask these three New Jersey Republicans why not the nation?

There are two other features of ACESA that negatively impact the economy without any corresponding benefit to the environment.

First, a significant portion of the greenhouse gas allowances will be sold to power companies at auction.  There was no such charge for allowances under the acid rain program.  The money paid for these allowances is supposed to be distributed to low income homes.  The expense to the power company of the payment for these allowances, however, will also be passed on to middle-class consumers and businesses.

Second, there is a provision in ACESA that would impose tariffs on goods imported from countries that do not match American greenhouse gas restrictions.  In a time of global economic recession, it is unbelievable that the legislation would contain a clause with such a high likelihood of provoking a trade war with China and India.  Even President Obama has expressed reservations about this provision.  

Indeed, this tariff clause is most deleterious to the economy and is highly similar to the Smoot-Hawley tariff of 1930 that intensified the Great Depression.  It is most disappointing that three New Jersey Republican Representatives, members of the party of free trade, would vote for a bill containing this provision

So there you have it – ACESA, a piece of legislation that achieves minimal greenhouse gas reductions, discriminates against the nuclear power industry, and imposes high costs on New Jersey consumers and businesses.  Reaction in New Jersey conservative Republican circles has been swift and angry.  Many activists are calling for primaries against Lance, Smith, and LoBiondo.

I would regret any primary efforts against Frank LoBiondo and Chris Smith.

I proudly state that Frank LoBiondo is a friend of mine.  While I am disappointed in his vote on ACESA, the Congressman from Cumberland County has been very loyal to the Republican Party over the past two decades and voted on legislation over 80 percent of the time consistent with party positions, both as a state Assemblyman and as a member of the U.S. House of Representatives.  He has been a superb Representative for his South Jersey constituents, and he has earned the continued trust and loyalty from New Jersey Republicans of all ideological stripes.

As for Chris Smith, he has been a pro-life advocate in an overwhelmingly Democratic district.  He also is one of the most effective and courageous human rights advocates in this history of the United States House of Representatives.  While he often departs from the party line on issues involving labor unions, he has always been forthright as to his intentions and beliefs.  If Chris Smith were defeated in the primary or general election in 2010, I do not think another Republican could win in his district for the next two decades.  A primary campaign against him would be destructive for the New Jersey GOP.

Leonard Lance is another story altogether.

To put Lance’s vote in perspective, compare his “yes” vote on ACESA with the “no” votes on the bill of his fellow northwest New Jersey Representatives Rodney Frelinghuysen and Scott Garrett.  Throughout their respective tenures in the House of Representatives, both Frelinghuysen and Garrett have been loyal to principle, insightful in their judgment, and willing to incur public criticism on a vote involving their core beliefs.  These are two outstanding members of the House of Representatives who are a genuine source of pride to New Jersey Republicans.  On ACESA, their “no” votes demonstrated their courage and wisdom.

By contrast, Leonard Lance tries to be all things to all people.  I remember him speaking at a meeting of Alan Ashkinaze’s Tuesday Group in 2003, claiming that he was a strict constructionist on judicial matters, yet explaining why he had to vote for the reappointment of his good friend Deborah Poritz as Chief Justice of the New Jersey Supreme Court.  

He claims to be in favour of nuclear power, yet in voting for ACESA, he voted for a measure that would sharply hinder the growth of nuclear energy.

He claims to be a fiscal conservative, yet he voted for paid family leave for federal employees.

Enough is enough.  Lance is undoubtedly popular with wine and brie Republicans, but he has lost any claim of loyalty from the grassroots.  I will not become involved in a 2010 primary campaign against Leonard Lance, but I will not oppose anybody who does.

There is one priority, however, that all New Jersey Republicans should adhere to.  In 2012, New Jersey will in all probability lose one seat in the House of Representatives.  It is highly likely that the eliminated seat will be one of the three from the Northwest Quadrant, namely the Fifth (Garrett), the Seventh (Lance), or the Eleventh (Frelinghuysen).   

State GOP leaders must ensure that neither Garrett nor Frelinghuysen lose their seats due to redistricting.  They are both entitled to the loyalty of the party that they have earned by their outstanding service in the U.S. House of Representatives.  Leonard Lance will just have to wait his turn.

Alan J. Steinberg served as Regional Administrator of Region 2 EPA during the administration of former President George W. Bush. Region 2 EPA consists of the states of New York and New Jersey, the Commonwealth of Puerto Rico, the U.S. Virgin Islands, and seven federally recognized Indian nations.