Senate Poised to Give Blank Check to Energy Projects

| Union of Concerned Scientists

This fall the Senate is expected take up a climate and energy bill that would establish a new agency within the Department of Energy to administer federal loan guarantees for private “clean” energy projects. The bill, the American Clean Energy Leadership Act of 2009 (S.1462), was passed by the Senate Energy and Natural Resources Committee in June.

The proposed new agency, the Clean Energy Deployment Administration (CEDA), would offer a range of financing options, including direct loans, letters of credit, loan guarantees and insurance for energy production, transmission and storage projects that emphasize so-called “breakthrough” technologies to reduce global warming emissions and energy consumption. Renewable energy, advanced nuclear, and coal carbon capture and storage projects all would qualify for assistance.

On the face of it, a federal “clean energy bank” sounds like a good idea. In fact, the House included a provision for CEDA in the Waxman-Markey climate and energy bill it passed in June. But experts at the Union of Concerned Scientists (UCS) took a close look at the Senate’s proposal and found a number of serious pitfalls that the House’s version avoided. For example, the Senate’s proposal would permit potentially unlimited loan guarantees to a wide range of costly energy technologies without the benefit of congressional oversight through the appropriations process. As drafted, it also would not restrict the amount of financial support that could go to the most costly, most risky, and least sustainable energy technologies. Finally, it would do nothing to prioritize the most cost-effective, environmentally sound technologies to address global warming. These deficiencies would put U.S. taxpayers at risk for loan defaults.

Full Story: Senate Poised to Give Blank Check to Energy Projects | Union of Concerned Scientists.