The Energy Bill: A Hero and a Villain
President Bush has just signed into law an energy bill that could have been even better but still remains an impressive achievement. The long struggle to produce that bill yielded the usual quotient of heroes and villains, but two deserve special mention:
John Dingell, who could have been a villain but chose to be a hero; and Mary Landrieu, who could have been a hero but chose to be a villain.
Mr. Dingell was a most unlikely hero. A Michigan Democrat and a reliable defender of the automobile industry, he had long resisted efforts to mandate new fuel efficiency standards, which had not been updated for more than 30 years.
But there has always been a softer, “greener” side to this crusty octogenarian that people often overlook. An architect of the original Clean Water Act of 1972, he cares a lot about wetlands preservation, endangered species and other environmental causes. He is also a fairly recent convert to the climate change issue, describing the global warming threat with phrases like “Hannibal is at the gates.”
So when Nancy Pelosi, the House Speaker, made a personal pledge to upgrade fuel efficiency standards, Mr. Dingell agreed, in exchange for one or two modest concessions, to get out of the way. He did more than that. When environmentalists complained that the Senate’s mandate for a huge increase in ethanol could threaten forests, wetlands and conservation areas, Mr. Dingell made sure the final bill contained the necessary safeguards. He also insisted on a provision requiring that ethanol from corn or any other source produce a net benefit in terms of greenhouse gas emissions.
Ms. Landrieu was an altogether different story. The Louisiana Democrat broke ranks with her Democratic colleagues and gave President Bush and the Republican leadership the one-vote margin they needed to strike a key provision that would have rescinded about $12 billion in tax breaks for the oil industry and shifted the money to research and development of cleaner sources of energy.
The White House argued that these tax breaks were necessary to insure the oil industry’s economic health and to protect consumers at the pump. Given industry’s $100 billion-per-year profits, these arguments were absurd on their face, but Ms. Landrieu promoted both of them and added one of her own: The energy bill was “one-sided policymaking” that left “Louisiana footing the bill.”
Never mind that the rest of the country is footing the bill for the repair and restoration of Louisiana in the aftermath of Hurricane Katrina. That is a just and worthy cause and one that the nation is willing to help pay for. But isn’t reducing oil dependency and global warming emissions by rewarding traditional fossil fuels a bit less, and rewarding newer, cleaner fuels a bit more, also a just and worthy cause? One that Louisiana could help pay for? That is something Ms. Landrieu might ask herself the next time she puts her state’s interest ahead of the nation’s.
The bill, which contains a major biofuels mandate (also known as the renewable fuels standard) and increased fuel economy, building, and appliance standards, has been given the okay by the president.
The New York Times today looks into the possible implications of the ethanol mandate.
The omnibus appropriations bill (H.R. 2764) wending its way to passage in the year-end Congressional rush.
As EE News reports, included in the bill are $18.5 billion in nuclear loan guarantees that have been championed by Sen. Pete Domenici (R-N.M.) and Rep. Steny Hoyer (D-Md.). Related provisions grant $6 billion for coal-based power generation and industrial gasification activities at retrofitted and new facilities that incorporate carbon capture and sequestration; $2 billion for advanced coal gasification; $10 billion for renewable and/or energy efficient systems and manufactoring and distributed energy generation, transmission and distribution; and $2 billion for uranium enrichment technology.
The loan guarantees come with the caveat that Congressional appropriators must approve any project implementation 45 days before the Department of Energy could activate the guarantee.
Funding for continuing nuclear programs includes $1.1 billion for DOE’s nuclear programs and $8.8 billion for the National Nuclear Security Administration.
Environmental groups have come out strongly against the nuclear and coal-to-liquids provisions. NRDC’s Heather Taylor told EE News, “The loan guarantee is certainly a poison pill for us. It’s an investment in the bad policies of the past.In a joint letter to Congress, seventeen environmental organizations wrote:
On behalf of our millions of members and activists, we regretfully ask you to vote no on H.R. 2764, the State, Foreign Operations, and Related Programs Appropriations Act, 2008 (Consolidated Appropriations Act, 2008) because it would take America down a dirty energy path. Although Congress started with the promise of leading our country into a new energy future, H.R. 2764 breaks faith and continues the misguided, polluting policies of the past.
After Sen. Reid dropped the oil-for-renewable tax package following a failed cloture vote on the energy bill this morning, Republicans removed the filibuster threat and President Bush dropped his veto threat, having achieved a bill that met essentially all of the White House conditions.
This evening, the senatorial candidates having left the city, the Senate moved directly to a vote (ending debate by unanimous consent) on the final revision of the energy bill, which retains strengthened CAFE, appliance, and building standards, and a strong biofuels mandate with White House-approved tax adjustments for revenue.
The bill passed 86-8, Sen. Stabenow (D-Mich.) joining seven Republicans (Wyoming, Oklahoma, Hatch, DeMint, and Kyl) in opposition.
The United States delegation to the UN Climate Change Conference in Bali has led Japan, Canada, and Russia in rejecting the nonbinding EU proposed roadmap of reducing greenhouse-gas emissions by wealthy countries 25 to 40 per cent by 2020. (By way of comparison, Lieberman-Warner (S. 2191) proposes a four percent cut from 1990 emissions levels by 2020.) The U.S. team is also opposing including references to the IPCC’s conclusions on the emissions reductions needed to avoid dangerous global warming.
In a speech today at the conference, Nobel Peace Prize laureate Al Gore said “My own country, the United States, is principally responsible for obstructing progress here in Bali . . . One year and 40 days from today, there will be a new inauguration in the United States. I must tell you candidly that I cannot promise that the person who is elected will have the position I expect they will have, but I can tell you I believe it is quite likely.”In a letter to the President, 52 members of Congress, including a handful of Republicans, criticized the U.S. negotiating stance:
The clear implication is that the United States will refuse to agree to any language putting the United States on an established path toward scientifically-based emission limits. . . We write to express our strong disagreement with these positions and to urge you to direct the U.S. negotiating team to work together with other countries to complete a roadmap with a clear objective sufficient to combat global warming. The United States must adopt negotiating positions at the Bali Conference of the Parties that are designed to propel further progress – not fuel additional delay.E&E News reports on EU threats to boycott a U.S.-led climate meeting:
Upset with the U.S.-led stance, senior officials from the European Union, France and Germany have threatened to boycott Bush’s plans to hold climate talks Jan. 30-31 in Honolulu.
“Without a roadmap and without a destination, it would be senseless,” said Stavros Dimas, the top environmental official for the European Commission. Dimas told reporters he made the same statement earlier today to Paula Dobrianksy, the lead U.S. negotiator at the climate meetings on the Indonesian island of Bali.
Karsten Sach of Germany’s environmental department and French negotiator Brice Lalonde both confirmed their countries also would stay away from Bush’s “Major Economies Meeting” if there is no agreement in Bali.
White House spokeswoman Kristen Hellmer didn’t take well to the E.U. threats. “Such comments are not very constructive when we are working so hard to find common ground on a way forward,” she said.
By a roll call vote of 59-40, Senate Democrats failed to muster the 60 votes needed to prevent a filibuster threatened by Republicans of the compromise energy legislation which retained the tax package under veto threat but not the House-approved renewable energy standard. Sen. Reid plans to reintroduce a version of the energy bill which contains the CAFE and biofuels provisions later today.
Sen. Mary Landrieu (D-La.) was the only Democrat to vote with the Republicans. Coleman, Collins, Grassley, Hatch, Lugar, Murkowski, Smith, Snowe, and Thune voted with the Democrats. Sen. John McCain (R-Ariz.), on the campaign trail, was the one senator not voting.
Two of the major farm bill (HR 2419/S 2302) amendments supported by reform advocates, the Lugar-Lautenberg subsidy overhaul (S 2228) and Dorgan-Grassley subsidy cap (S 1486), have both failed to achieve the sixty votes necessary to overcome Republican filibusters.
On Tuesday, Lugar-Lautenberg was soundly rejected by a vote of 37-58 (the five presidential candidates in the Senate did not vote).
This morning, the cloture vote to end debate on Dorgan-Grassley narrowly failed by a vote of 56-43.
To gain the 60 votes a cloture vote on the energy bill (H.R. 6) needs for success, Senate Majority Leader Harry Reid has dropped the Renewable Energy Standard provision from the package, which still contains the 35 MPG by 2020 CAFE standard, a 36 billion gallon by 2022 biofuels mandate, appliance and building efficiency standards, and a broad tax/green jobs package. The White House has threatened to veto the bill for the CAFE standards and tax package. Reid held a cloture vote on the House version last week, which failed by a vote of 53-42. The new cloture vote is scheduled for Thursday.
The tax package was reworked by Sen. Max Baucus (D-Mont.) and Charles Grassley (R-Iowa), the leaders of the Senate Finance Committee.
The reworked tax package, which remains at about $21 billion paid for mostly by closing loopholes that favor oil and gas companies, changes the terms of the renewable production tax credit extension. The extension is limited to two years but the cap on credit an individual project can receive is dropped.
Other modifications include a new category of tax exempt bonds for electric transmission facilities, a $2500 tax credit for plug-in hybrid conversion kits, and the removal of an incentive for the construction of natural gas distribution infrastructure. Enforcement of prevailing-wage restrictions under Davis-Bacon was also dropped.
The full description of the tax package (“The Clean Renewable Energy and Conservation Tax Act of 2007”) is below.
In Bali, EE News reporter Darren Samuelson interviews David G. McIntosh, Sen. Lieberman (I-Conn.)’s counsel and legislative assistant for energy and the environment, about the prospects for Lieberman-Warner (S. 2191) on the Senate floor in 2008.
Before joining Senator Lieberman’s staff in April 2006, McIntosh served briefly as a Maryland assistant attorney general representing the state’s air agency. Before that, he worked at NRDC as a Clean Air Act litigator and regulatory lawyer. After graduating from Harvard Law School in 1998, he clerked for a U.S. District Court judge in Washington, DC before joining the legal and lobbying firm Covington & Burling, for one year. He is not to be confused with former representative David M. McIntosh (R-Ill.), a strong fighter against environmental regulations.
“We could probably predict a half-dozen issues that would be top-line amendment issues,” McIntosh said during an interview at the United Nations’ global warming negotiations in Bali. “Some of them, we have the ability through negotiation and engagement to have those amendments be presented in a way that is not divisive, that does not divide up the votes that would otherwise support passage on the floor.”McIntosh hopes to be able to craft a nuclear title suitable for inclusion in Lieberman-Warner:
McIntosh predicted Senate negotiations over the climate bill from Lieberman and Sen. John Warner (R-Va.) would center foremost on the economic implications tied to creating a first-ever mandatory cap on U.S. greenhouse gas emissions. He also expects a strong push on incentives for nuclear power.
The bill’s lead cosponsors are interested in “seeing if it is possible to craft an amendment or to encourage others on nuclear enegry in ways that’d be seen as targetted and relevant and fitting within the confines of the bill rather than efforts to revive every type of support for nuclear power that anyone has ever thought of.”Sen. Kerry (D-Mass.), the only Senator in Bali, also spoke on Lieberman-Warner:
I can’t tell you precisely when, but we’re committed to having this debate regardless of whether or not we can pass it or where the votes are. We believe it’s an important marker, and we intend to make this part of the debate in the presidential elections of 2008.
In today’s Washington Post, former president Jimmy Carter penned the op-ed Subsidies’ Harvest Of Misery, throwing his support behind major reforms to the farm bill (H.R. 2419/S 2302/SA 3500), namely the Lugar-Lautenberg (S 2228/SA 3711) and Dorgan-Grassley (S.1486/SA 3508/SA 3786) amendments, saying “Both amendments would go a long way toward making the farm bill fair for farmers at home and abroad.”
Lugar-Lautenberg (the FRESH Act) is a broadly supported reform bill that would replace the current subsidy system with a yield-based insurance system. Dorgan-Grassley places a $250,000 annual cap on individual subsidies.Carter cites the current state of farm subsidies:
It is embarrassing to note that, from 1995 to 2005, the richest 10 percent of cotton growers received more than 80 percent of total subsidies. The wealthiest 1 percent of American cotton farmers continues to receive over 25 percent of payouts for cotton, while more than half of America’s cotton farmers receive no subsidies at all. American farmers are not dependent on the global market because they are guaranteed a minimum selling price by the federal government. American producers of cotton received more than $18 billion in subsidies between 1999 and 2005, while market value of the cotton was $23 billion. That’s a subsidy of 86 percent!He goes on to say that the fragile agrarian economies of third-world Africa are dependent on exports harmed by the domestic subsidies.