Logistics Management - June 2010

inside
c Obama, truckers agree, p.17
c Higher rates are coming, p.18
c IBM to acquire Sterling, p.19
Kerry, Lieberman roll out
new energy legislation
American Power Act hones in on GHG reductions, curbing domestic oil usage,
and increasing infrastructure investment to improve transportation efficiency.
ATA opposes, others applaud.
By Jeff Berman, Group News Editor
WASHINGTON—Senators John Kerry
(D-Mass.) and Joseph Lieberman (I-Conn.)
introduced their long-awaited legislation at
the end of May that they claim will transform
the nation’s energy policy from a
national weakness to a national strength.
Entitled “The American Power Act,”
the bill vows to reduce greenhouse gas
emissions (GHG) by 17 percent—compared
to 2005 levels—by 2020 and 83
percent by 2050, matching an objective
put forth by the White House last year.
Looking at the bill’s action items from
a supply chain and freight transportation
perspective, one of the bill’s most
notable takeaways is a goal to decrease
U.S. dependence on foreign oil. The
Senators want to do this through myriad
steps, including investing more than
$6 billion per year in transportation
infrastructure to increase efficiency
and decrease oil consumption; investing
nearly $2 billion for state and local
projects that reduce oil consumption
and GHG; and nearly $2 billion for the
Transportation Investment Generating
Economic Recovery (TIGER) Discretionary
Grant Program.
Another transportation-specific measure
includes a $6 billion annual subsidy
allocated for increased efficiency
and lowering oil consumption in the
transportation sector. Regarding domestic
oil production, the legislation would
Senators John Kerry (D-Mass.
above) and Joseph Lieberman
(I-Conn.) introduced their
long-awaited legislation at the
end of May that they claim will
transform the nation’s energy
policy from a national weakness
to a national strength.
allow coastal states to
opt out of drilling up
to 75 miles from their
shores. While previous
versions of this legislation
included language
that was viewed as “cap
and trade,” this bill has a
somewhat similar offering
but is not described
as cap and trade by its
authors.
In the American
Power Act, there are
provisions for emissions
trading that would take
effect in 2013. Emissions
trading would start at $12 and
$25 a ton and be geared towards utility
companies, with the $12 per ton
increasing at 3 percent over inflation
annually and the $15 per ton increasing
5 percent over inflation annually.
“Rather than allowing a patchwork
of conflicting state and federal regulations,
it lays out one clear set of rules
for reducing GHG,” according to the
language in the bill. Kerry and Lieberman
added that states that already have
cap and trade programs in place will be
compensated for lost revenues due to
termination of their programs.
The Senators also noted that industrial
sources would not enter the emissions
trading program until 2016, at
which point they will receive allowances
to offset direct and indirect compliance
costs.
But, as LM has previously reported,
cap and trade—or any type of exchanging
or trading emissions allowances or
permits—has been widely met with
heavy opposition in freight transportation
and logistics circles. And that sentiment
appears to be the same this time
around as well.
Officials from the American Trucking
Associations (ATA) said that this
legislation will require refiners to purchase
billions of dollars worth of carbon
allowances that correspond to the car-
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