Hill Heat

The decision by Senate leaders not to pursue a filibuster-proof budget reconciliation plan removes one option for moving billions of dollars of renewable energy and efficiency tax breaks funded by repealing incentives for oil and gas companies.

While a Senate budget resolution is going to set aside $13.4 billion over five years for these renewable and efficiency credits – some of which expire this year – it merely signals that the issue is one of the priorities for Senate Democrats and does not forward debate over how to pay for those credits.

A reconciliation bill would have sent detailed instructions to committees on how to pay for that spending and would have been immune to a filibuster.

The budget resolution also includes $3.5 billion in discretionary funding for energy above President Bush’s FY09 request, which Senate Budget Chairman Conrad touted as “a very big increase; I think the biggest increase in more than 30 years.”

Senate Democrats are trying to overcome Republican opposition to scaling back billions in incentives for oil and gas companies to pay for the popular renewable and efficiency credits. Democrats in December fell one vote short of the 60 needed to overcome a filibuster of a $21.8 billion proposal that reduced oil and gas incentives by about $13 billion.

A politically problematic $18 billion House-passed renewable energy tax proposal is pending, but few are optimistic that it could become law given a White House veto threat. This is leading to some brainstorming on other means of getting these credits extended quickly.

Majority Leader Reid has tasked Sen. Maria Cantwell, D-Wash., with helping find another Republican vote or two. Cantwell, who pushed for a one-year $5.5 billion renewable and efficiency tax package as part of a failed Finance Committee economic stimulus plan, said a similar smaller package should be considered. “There’s nothing preventing us from looking at the bigger package – see what the president does – but still work toward a smaller package too,” she said.

Cantwell said “the challenge is to still try to save investment in ‘08,” and extend the tax incentives within the next month or so.

This is the basic message of a broad coalition of businesses, renewable energy groups, environmentalists, labor unions and others who are taking advantage of an international renewable energy conference in Washington this week to do some cohesive lobbying to extend these credits by the end of the month.

But a spokesman for Reid said he will not resurrect an energy tax debate until after lawmakers come back from the upcoming two-week Easter recess.

Several industry officials say they are not requesting that Congress follow a particular strategy for quickly extending the renewable and efficiency incentives.

“We basically said Congress should figure this out,” said Dan Reicher, former assistant Energy secretary for energy efficiency and renewable energy under President Clinton and now director of climate change and energy initiatives at Google.org.

“We have tried to stick to a pretty simple approach – extend the credits quickly and extend them for a long period of time.”

But the political problems associated with repealing the billions in oil and gas incentives means the solution to getting an extension through fast is potentially undefined.

“The answer is, you need some new and original thinking here,” said Marchant Wentworth, legislative representative for the Clean Energy Program at the Union of Concerned Scientists.

While Cantwell has talked about doing a smaller package to gain support and possibly avoid a veto threat, Wentworth cautioned that there does not appear to be a magic number to achieve that.

“The question we all face is, are there new votes that you would get? These are leadership-driven; it’s unclear to me that lowering the incentives gets you anything,” he said.

In the meantime, a wide variety of groups and companies – including retail giant Wal-Mart, the Real Estate Roundtable, Dow Chemical and DuPont – are targeting congressional leaders and several Senate Republicans to vote for extending the credits regardless of whether it affects oil and gas company incentives.

Among Republicans being targeted are Sens. John Ensign of Nevada, John Sununu of New Hampshire, Ted Stevens and Lisa Murkowski of Alaska, Arlen Specter of Pennsylvania and Richard Lugar of Indiana.

Lugar and Murkowski voted against the filibuster in December. Renewable energy groups might also get a rare chance to lobby Bush personally when he speaks today at the 2008 Washington International Renewable Energy Conference.