Hill Heat

From the Wonk Room.

Even as their colleagues place roadblocks on energy reform, several members of the U.S. Senate are attempting to strengthen the American Clean Energy and Security Act, the green economy legislation passed by the House of Representatives this June. As Sen. Barbara Boxer (D-CA) and Sen. John Kerry (D-MA) take the lead to write the Senate draft, many of their fellow senators have proposed specific policy improvements:

• EMISSIONS LIMITS: Sens. Ben Cardin (D-MD), Frank Lautenberg (D-NJ), Bernie Sanders (I-VT), and Sheldon Whitehouse (D-RI) are calling for the legislation to strengthen its 2020 target for greenhouse pollution reductions to 20 percent below 2005 levels, instead of the current 17 percent target. “I like the House bill, don’t get me wrong,” said Sen. Ben Cardin (D-MD). “But I think we can do better.” Lautenberg told reporters: “That’s the objective, as far as I’m concerned, because the glide path has to be established that enables us to get to 80 percent in 2050. You can’t get there unless you start aggressively pushing.”
• GREEN TRANSPORTATION: Sen. Tom Carper (D-DE) is working to strengthen the bill’s funding for green transportation, pushing language that would “devote a guaranteed share of revenues from carbon regulation to transit, bike paths, and other green modes of transport.” The Clean, Low-Emission, Affordable, New Transportation Efficiency Act (S. 575 / H.R. 1329) would auction ten percent of carbon market allowances for clean transit improvement. Senators Arlen Specter (D-PA), Jeff Merkley (D-OR), Frank Lautenberg (D-NJ), and Ben Cardin (D-MD) have co-sponsored the legislation.

Washington Post As we are moving to address some of our nation’s great challenges – revitalizing our economy, putting Americans back to work and passing health insurance reform – scientists are telling us we have a short window to take the steps that are needed to avoid the ravages of global warming. We must also act quickly to ensure America leads the world in clean energy technology. We need to confront all of these issues; we don’t have the luxury of picking and choosing. By creating powerful incentives for clean energy, the bill that Sen. John Kerry (D-Mass.) and I will introduce in September will restore our economy and create jobs at home while reducing carbon pollution and making us less dependent on foreign oil. John Doerr – one of the nation’s leading venture capitalists, who helped launch Google and Amazon.com—has predicted that the investment capital that will flow into clean energy will dwarf the amount invested in high-tech and biotech combined. It will create millions of jobs in America – building wind turbines, installing solar panels on homes and producing a new fleet of electric and hybrid vehicles. We can successfully address all of these challenges. Our forebears have set the pace ever since our nation was founded. President Obama has reminded us that America built the transcontinental railroad and established the National Academy of Sciences in the midst of the Civil War. In the 1960s, we passed historic civil rights legislation even as we took on the challenge of going to the moon. At the end of the day, leaders have to lead when action is needed.

Washington Post Cap-and-trade legislation will fail under its own weight, just like health-care legislation. Each massive, misguided policy is being doggedly pushed by the Obama administration and the Democratic congressional leadership in a narrow, partisan fashion that will contribute to and ensure its failure. We could forecast the American outrage, based on past experience with these types of proposals, and if the Democrats succeed in forcing these bad policies on American families, they will be held accountable by the public. The administration’s health-reform proposal would nationalize and bureaucratize health care in America. Cap-and-trade, meanwhile, will kill 2 million American jobs; shrink the household incomes of average Americans by more than $1,000 annually; and penalize the industries that produce our nation’s energy – at a time when we are already concerned about the high costs of fuel and utilities. It will increase our dependence on foreign energy imports, which is already at an astounding 60 percent. We have seen such proposals before, and the good news is that they have failed miserably because Americans are well informed and understand how they could impact their lives.

Washington Post As lawmakers return to Washington and assess the fiery backlash of constituent opposition to government-run health care, those mired in the thick of the climate change debate are wondering: What does it all mean for us? The warring factions over climate policy should step back and try to discern whether constituents are signaling a more basic distrust of new government schemes. Polling data from the past several months indicates that such public distrust is real, deep and widespread. This means the Democrats’ government-run, cap-and-trade scheme – in fact, an energy tax that extends into every corner of American life – now faces an even higher hurdle, including growing opposition from many Democrats in the Senate. Such distrust will only grow if Democrats insist, as they did in the House, on crafting climate legislation in their inner sanctums, with no time for serious public input and debate. And this is exactly the course being drawn in the Senate. Still, Washington’s appetite for spending, taxing and regulating – cap-and trade contains elements of each – is boundless. So, despite having public opinion on our side, those opposed to cap-and-trade are facing a monumental battle this fall in the Senate. There will be a mad race for 60 votes, and the outcome will reverberate beyond 2010.

E&E News “I’d like to hear what they have to say about it before I shoot my mouth off,” Bennet’s signed on as co-sponsor to a bill from Sen. Tom Udall, (D-N.M.) and Udall of Colorado that would enact a 25-percent-by-2025 renewable electricity standard. “It’s been an enormous positive for Colorado,” Bennet said. “The market adapted. Our evidence is that it works.” When it comes to Colorado’s fossil fuels, Bennet for now is stepping behind natural gas, calling for it to have a bigger role in the Senate bill. “It was essentially absent from the House bill,” Bennet said. “I’d like to know why that is.” Bennet said he also sees “opportunities to tie together natural gas with intermittent power sources like sun and wind.” “I don’t have any specifics today,” Bennet said about what he wants to see. “I’m talking with people in the environmental community and natural gas people and hearing what their ideas are.” “In Colorado now we’re confronting these issues because of the water shortages that we have,” Bennet said. “If we are going to be able to assure that another generation of Coloradans are able to farm, or one after that, we need some answers to these questions how do we preserve our water resources.”

E&E News Senate Energy and Natural Resources Chairman Jeff Bingaman (D-N.M.) has long advocated price controls as part of a cap-and-trade bill, including a “safety valve” in previous versions of his own. “I think it’s something that makes a lot of sense to look at,” Bingaman said. “These cap-and-trade bills have so many pieces,” Bingaman said. “I don’t know that you can point to one thing and say, ‘Stick that in and everyone jumps on board.’ I think it’s much more complicated than that.”

E&E News Sen. Kit Bond (R-Mo.) complained during an EPW Committee hearing yesterday about comments from Boxer and Kerry that they may not even be putting out allocation language with their draft bill in early September. “That troubles me a great deal,” Bond said. “We can’t leave these allocations blank, placeholders, if we’re going to give Americans a fair, open and transparent view of the legislation.”

E&E News Barbara Boxer (D-Calif.) is considering a “price collar” for her global warming bill that could help to curb the economic costs from a cap-and-trade program. “I don’t know why we can’t consider this as one more way to give more certainty,” Boxer said during a hearing today. “I’m looking at it, is what I’m saying.”

E&E News Among other things, the senators said they would seek a “border adjustment mechanism” that could slap trade sanctions on carbon-intensive goods from developing countries that do not have strong enough climate policies. “In the absence of an adequate international agreement, a border measure could help to prevent countries from responding to climate change less rigorously than the United States and undercutting the effectiveness of our climate policy by shifting, rather than reducing, greenhouse gas emissions,” the senators wrote. Other Senators that signed on: Russ Feingold (D-WI), Carl Levin (D-MI), Evan Bayh (D-IN), Robert Casey (D-PA), Arlen Specter (D-PA), Jay Rockefeller (D-WV), Robert Byrd (D-WV), Al Franken (D-MN)

New York Times As Congress considers energy and climate legislation,” the senators wrote, “it is important that such a bill include provisions to maintain a level playing field for American manufacturing.” “It is essential that any clean energy legislation not only address the crisis of climate change, but include strong provisions to ensure the strength and viability of domestic manufacturing,” the letter said.

“E&E News’:http://www.eenews.net/EEDaily/2009/08/05/1/ Sen. Kit Bond (R-Mo.) criticized the power companies for even trying to negotiate with congressional Democrats. Either way, he said, the electric utilities lose. “That’s bargaining with somebody on how they’re going to hang you,” Bond said. “They’ll hang you with minimal pain, or they’ll torture you to death.”

E&E News “So let us see if we can figure out how to distribute emission allowances in a way that one might call just,” Baucus said at a hearing on allocations today. “Let us see if we can figure out how to give all Americans what they deserve.” “The House bill provided solid relief to low-income Americans through these means,” he said. “The Senate should match it, or build on it.” “I don’t want to prejudge at this point,” he said. “I just want to take a good, strong, hard, fresh look at allowances to see what makes sense. Everything can be improved upon.”

CQ “I doubt it’ll be major. There’ll be some,” Senate Finance Chairman Max Baucus , D-Mont., said Tuesday, when asked about changes to the allocation formula.

WV Metro News “There are a number of ways to use allowance revenues to mitigate the cost of climate legislation on consumers and businesses,” Senator Baucus said.  “For example, Congress could use the money from auctioning allowances to cut taxes by cutting marginal rates, by cutting capital gains rates, by cutting payroll taxes or by doing all of the above.”

ENews USA He said, “Economists expect that these allowances will have a value, like cash. Thus, many argue that the government should not just give these allowances away. Many argue that the government should auction them, and return the proceeds to consumers. Others argue that the government should allocate a portion of the allowances to regulated companies. Doing so would soften the effects of putting a price on carbon.” . . . “Allowances will have significant value. In 2012, the first year of the program in the House‐passed bill, the Congressional Budget Office [CBO] puts their value at about $60 billion. For the period of 2010 to 2019, they amount to more than $870 billion.” Baucus cites the CBO which says, “[T]he creation of allowances by the government should be recorded as revenues. That logic does not hinge on whether the government sells or, instead, gives away the allowances. Allowances would have significant value even if given away because the recipients could sell them or, in the case of a covered entity, use them to avoid incurring the cost of compliance.”

Washington Post “We want an America in which we create hundreds of thousands of ‘green jobs,’ but not at the expense of destroying tens of millions of red, white and blue jobs.”

Washington Post “It’s very hard for Congress to do one big thing, much less do a couple of really big issues at the same time,” said Sen. Byron L. Dorgan (D-N.D.), whose state produces coal as well as wind power. Dorgan, who could be a swing vote on a climate bill, said he believes in capping carbon emissions, but not this way. He fears that cap-and-trade will create a market open to manipulation, like existing securities markets. He remains noncommittal about his ultimate vote. “We have a whole mountain range to climb before we get there,” he said.

Washington Post “What they did, we’ll keep,” said  Sen. Tom Harkin (D-Iowa), chairman of the Senate Agriculture Committee. “We’re going to maybe do some other things that would maybe embellish what they did in the House.” He wants to be more generous with “carbon offset” programs that allow farmers to be paid for no-till agriculture that keeps carbon in the soil.

Delta Farm Press “If the United States passes this bill (without China and India), we’re not going to impact temperatures to any significant degree. Isn’t that correct?” “‘Because overall land area and crops decline due to aforestation, the modeling indicates a net decrease in total agricultural soil carbon storage as carbon is transferred from agricultural soils to the aforestation pool.’ “The whole purpose of this hearing is just to be honest with people. So, what’s going out of production? The important thing about that is it affects the pork producer, the cattle guy — it beats the living daylights out of them. Why? Because prices will go up. They’re out there saying, ‘Look, my input costs are going to go up with electricity, natural gas, fertilizer.’ “Just tell them: how many acres are going out of production?” “Many of the offsets (Vilsack) speaks about wouldn’t go to the row crop person to offset his higher energy, fertilizer and other costs,” Johanns continued. “It would go to the person who is planting the forestland. “But, again, unless you can quantify this, you can’t sell this plan. It becomes the ‘hope and a prayer’ plan for agriculture because you can’t tell farmers and ranchers what they’ll be exposed to in terms of input costs. That’s a huge issue.” It’s no consolation “to stand with one foot in the campfire and one in the ice bucket and say, ‘on average, I’m in good shape,’” said Johanns. “It’s no consolation to tell farmers and ranchers, ‘you’re going to be in good shape, on average,’ if you don’t know the regional differences, the crop differences, if you can’t tell them how much land will go out of production. “And yet we have a House bill (Waxman/Markey) that passed. I find that shocking. I find it amazingly shocking that could happen without the aforementioned information being available.

Billings Gazette Sen. John Barrasso, R-Wyo., calls it a ‘job-killer’ that would result in “stripping red, white and blue jobs, and then subsidizing a few green jobs in their place.”

E&E News “We’re going to, in the Finance Committee, have hearings on and fully intend to mark up allowances, which allowances are free allowances, as well as what allowances are auctioned.” “On allocations, the last time, in the Clean Air Act, that was a much smaller deal,” Baucus said. “This is much more important. And also, it is a tax measure. It’s a tax bill. And if the House bill were referred to a committee, it’d be automatically referred to the Finance Committee because of revenue.”

Springfield News-Leader Blunt appeared at Saturday’s meeting with Sen. Kit Bond, who vowed to raise a lot of questions when the bill gets to the Senate. He said most sources are telling him it would make energy bills double. “That’s just a guess,” said Bond. “It may only go up 50 percent, it may go up 200 percent rather than 100 percent. Nobody really knows how much it will cost other than it will cost.” . . . Bond said that with China and India refusing to adopt cap-and-trade provisions, getting the United States to abide by them won’t make a huge impact on climate change.

E&E News “I like the House bill, don’t get me wrong,” said Sen. Ben Cardin (D-Md.). “But I think we can do better.”

Grist “I didn’t think it was possible, but the Waxman-Markey climate bill appears to be even more problematic than the climate bill that tanked in the Senate last spring,” he said, referring to the Lieberman-Warner bill that he voted against in 2008.  “I don’t know of many special interests that don’t receive a pay-off in this [Waxman-Markey] legislation, and if it comes to the Senate floor in this form, I’ll vote against it.” “I want to tell you that I wish we would just talk about a carbon tax, 100 percent of which would be returned to the American people. So there’s no net dollars that would come out of the American people’s pockets.”

Des Moines Register But without more economic analysis, Vilsack is trying to sell the climate bill on a “hope and a prayer,” says Mike Johnanns.

Johanns “Cap-and-trade threatens to change the landscape of American agriculture, and we need to get a better understanding of just how deep the impact will be,” Johanns said. “It is necessary for the Senate as well as farmers and ranchers across the country to know the facts about how cap-and-trade will affect agriculture. I am pleased Chairman Harkin has agreed to hold more hearings, and I hope they, along with a committee mark-up, are scheduled soon so we can give this critical issue a more in-depth look.”

E&E News “I’m using this time to try respectfully to educate members of my caucus, and maybe some Republicans, about the importance of natural gas, the importance of domestic energy security, so we don’t lose that in this debate.” Landrieu said. “It’s not just about cleaning up the environment. It’s about securing America’s economic future. And both are important.”

E&E News “That’s the objective, as far as I’m concerned,” added Sen. Frank Lautenberg (D-N.J.). “Because the glide path has to be established that enables us to get to 80 percent in 2050. You can’t get there unless you start aggressively pushing.”

Wall Street Journal “I believe climate change is real . . . but this 1,400-page bill is a farce. They bought every industry off—steel mills, agriculture, utilities,” he says. So you wouldn’t vote for the House bill? “I would not only not vote for it,” he laughs, “I am opposed to it entirely, because it does damage to those of us who believe that we need to act in a rational fashion about climate change.”

SENATE SUMMARY 7/29/2009

E&E News “There’s a reason why the House bill came up with its formula,” Baucus said. “And I suppose a lot of those same reasons will apply over here, too. But the Senate’s a little different than the House. We’ll take a fresh look, but respective of what the House did. We’ll look at ways to make sure U.S. companies are not taken advantage of, or discriminated against,” he said. “The trade-related remedies is one way.”

E&E News “On the energy bill to reduce our dependence, it is so centrally important to the economy that it needs to be done as soon as we can get it done, and there you have a chance for pretty strong bipartisan support,” Conrad said.

EPW “…The second half of it, as my colleague described, is not something we are doing in this bill, but the ability to continue hydraulic fracturing, decade after decade, I think for nearly 50 years, I am not aware of any evidence that there is any contamination of groundwater with hydraulic fracturing when companies have followed the appropriate guidelines and regulations.”

EPW Minority In the coming weeks, I intend to go through every single page of this climate bill, revealing the massive amount of spending, the labyrinth of new regulations, and expansion of government agencies and programs…I think the time is right to peel back the green veil and expose this 1,400-page monument to big government. There’s a lot in there, and at times the bill gets very complicated. But over the next several weeks, I plan to focus on some of the bill’s most damaging provisions, as well as those that reinforce the criticisms I’ve been making. Before the United States Senate moves to vote on the largest tax increase in history, the American public deserves to know exactly what is in this bill.

Des Moines Register “…you can have one foot in the campfire and another in the ice bucket, and on average you’d be just right, despite the fact that you’d be on fire. Similarly, using averages to estimate the impact of cap-and-trade does not help farmers and ranchers to calculate the true costs. Perhaps American agriculture will be fully on board with the secretary after reviewing solid analysis.”

The Hill “It depends on whether the administration has a proposal. That’s generally the way we work, but obviously that’s not been the case here,” McCain said. “It also depends on whether there’s a tangible desire for bipartisanship and whether the president decides to lead. I think that some of us have a legitimate desire to say, ‘Well, what is your proposal?’ to the president.”

Daily Mail “I’m glad to hear from so many West Virginians about this really important issue,” Rockefeller said. “I will absolutely fight for the future of coal and jobs in our state. I will not support an energy bill that threatens West Virginia’s future.”

From the Wonk Room.

In a C-SPAN interview, Rep. Artur Davis (D-AL) attacked Waxman-Markey, claiming it would “wreak havoc” on Alabama’s manufacturers. Even though a record-breaking heatwave has killed a woman in his state this week, the dynamic congressman now running for governor in Alabama explained his plan to vote against the Waxman-Markey American Clean Energy and Security Act (H.R. 2998/H.R. 2454) today by arguing it would destroy his state’s fragile economy:

“This bill is still going to wreak havoc with the manufacturing sector in some parts of the country.”

“The Senate, for example, is not considering cap and trade. The cap and trade provisions are the ones that frankly would damage the manufacturing sector short term and have a lot of other unpredictable consequences on our economy.”

“When we’re in the midst of a deep recession, we need to make sure we’re not making a dramatic change that could cost us jobs in the short term, because many states simply can’t afford to lose more jobs.”

“This is the wrong time for cap and trade, this is the wrong time to impose a renewable electricity standard on the Southeast.”

Watch it:

In fact, the Senate is continuing to work on cap-and-trade legislation for passage this fall, and studies have shown that states like Alabama need the clean-energy economy to recover from the Bush-Exxon recession.

A Clean-Energy Economy Will Create 29,000 Jobs In Alabama. The Waxman-Markey American Clean Energy and Security Act (H.R. 2454), the EPA found, will “create strong demand for a domestic manufacturing market for these next generation technologies that will enable American workers to serve in a central role in our clean energy transformation” and “play a critical role in the American economic recovery and job growth.” A report from the Center for American Progress and the Political Economy Research Institute “finds that Alabama could see a net increase of about $2.2 billion in investment revenue and 29,000 jobs based on its share of a total of $150 billion in clean-energy investments annually across the country. This is even after assuming a reduction in fossil fuel spending equivalent to the increase in clean-energy investments. [EPA, 4/20/09; PERI, 6/18/09]

Waxman-Markey Directs Billions Of Dollars To Energy-Intensive Manufacturing. The Waxman-Markey American Clean Energy and Security Act (H.R. 2454) includes cost containment provisions, allowances for worker assistance and training, investments in clean energy technologies, a new clean energy deployment agency, and billions of dollars in direct assistance to trade-vulnerable and other industries. [Committee on Energy and Commerce, 6/9/09]

A Renewable Electricity Standard Would Reduce Costs In Alabama. The Energy Information Administration projects that a renewable electricity standard of 25 percent by 2025 – much stronger than the one in the Waxman-Markey legislation – would drive electricity costs down by more than 10 percent in Alabama and throughout the Southeast, as utilities move away from increasingly expensive coal to renewable biomass. [EIA, 4/09]

Alabama Is Especially Susceptible To Global Warming Damages. As a coastal state, Alabama is highly vulnerable to the devastation of hurricanes, which will increase in intensity as the oceans warm and sea levels rise. Rainfall is expected to decrease, increasing the rate of devastating droughts like that of 2007. By the end of the century, Alabama will have deadly heat waves over 90 degrees for more than four months every year. [U.S. Global Change Program, 2009]

From the Wonk Room.

After long negotiations, House leadership has unveiled the final version of the American Clean Energy and Security Act (H.R. 2454), to be voted on by the full House today. The bill’s author, Rep. Henry Waxman (D-CA), introduced an amendment in the form of a substitute (H.R. 2998), which incorporates a score of amendments to the legislation. The schedule today includes five votes on the passage of this historic bill, which would national standards for clean energy and global warming pollution, with final vote expected at 5 PM:

1. H. Res. 587: Adoption of the rule to set the terms of debate, officially three hours in total.
2. H.R. 2998: Adoption of the Waxman amendment in the nature of the substitute.
3. H.R. 513: Adoption of J. Randy Forbes (R-VA) substitute, the New Manhattan Project for Energy Independence.
4. Motion to recommit.
5. Final passage.

The final version of the Waxman-Markey act includes a mixed bag of changes. Weakening amendments include Rep. Collin Peterson’s (D-MN) concessions on behalf of Big Ag. In exchange for a restriction of the Building Energy Performance Labeling Program on behalf of the National Association of Realtors, Rep. Ed Perlmutter’s (D-CO) beneficial GREEN Act to spur energy-efficient homes will be adopted. Waxman included several other beneficial changes, including the Inslee (WA)-Markey (CO) clean-grid legislation, several critical green jobs amendments, and the Titus (NV)-Giffords (AZ)-Heinrich (NM) renewable energy standard for Federal agencies.

Below is a summary of the Waxman amendment, broken down by its the component amendments:

• Waxman (CA): Makes changes to accommodate States that utilize a central purchasing model for its renewable electricity standard, and makes additional changes.
• Inslee (WA) / Markey (CO): Provides FERC with sitting authority for the construction of certain high-priority interstate transmission lines constructed in the Western Interconnection and amends the National Interest Electric Transmission Corridors.
• Peterson (MN): Requires the Agriculture Secretary to establish a list of types of domestic agricultural and forestry practices that result in reductions or avoidance of greenhouse gas emissions, exempts the agriculture and forestry sectors from the bill’s emission caps, redefines “biomass,” and grandfathers existing biodiesel plants to exempt them from lifecycle analysis under the RFS.

From ThinkProgress.

In a 219-to-212 vote this evening, the House passed the American Clean Energy and Security Act, which will “for the first time put a price on carbon emissions” in the U.S. In the final minutes of the debate, House Minority Leader John Boehner (R-OH) threatened to obstruct the bill by reading 300 pages of amendments, but eventually relented and read only a few sentences from selected portions. Progressive Media compiled a video detailing the major arguments both for and against the bill. Watch it:

Despite promises that Republicans would rally against the bill, several members defected to support it, including Reps. Dave Reichart (R-WA), Mike Castle (R-DE), Mary Bono Mack, Mark Kirk (R-IL), Leonard Lance (R-NJ), Frank LoBiondo (R-NJ), Chris Smith (R-NJ), and John McHugh (R-NY). 44 Democrats voted against the legislation. Reps. John Lewis (D-GA) and Pat Kennedy (D-RI) both returned to the floor for the first time after tending to significant health issues to support the legislation.