Hill Heat

Thirty-three senators, including several Republicans, sent a letter Friday urging leadership to include the renewable tax incentives set to expire this year in the economic stimulus package. Inclusion of the production tax credits in the 2007 energy bill failed by one vote.

We strongly support current bipartisan efforts to mitigate an economic downturn by providing direct financial relief to American families. At the same time, we believe that we must be cognizant that energy prices have been a leading cause of our current economic environment. Accordingly, we strongly believe that we must provide a timely long-term extension of clean energy and energy efficiency tax incentives that expire at the end of this year. Given record energy prices and growing demand, postponing action on these critical energy incentives will only exacerbate the problems afflicting our economy. In fact, these renewable energy and energy efficiency investments have a verifiable record of stimulating capital outlays and promoting job growth. We must ensure that this impressive record is maintained in 2008 and extend these tax credits expeditiously.

Nine of the signatories are members of the Finance Committee.

Full text of the letter is available here.

EPA administrator Stephen Johnson’s denial of California’s petition to regulate tailpipe greenhouse gas emissions following the White House energy bill signing ceremony was deservedly front page news from coast to coast. The Supreme Court forced the EPA to consider California’s December 2005 Clean Air Act waiver request in April 2007 (Massachusetts v. EPA). In testimony before the Senate and the House earlier this year, Johnson signaled his lack of desire to grant the waiver. Now that decision has come in, with justifications even EPA’s own laywers and policy staff don’t believe. This is the first time in the history of the Clean Air Act that the EPA has denied a section 209 California waiver request.

[Ed.—Warming Law has superior analysis of the decision, from which I’ll steal some key insights.]

The EPA, which is yet to release the formal denial, announced in its press release that the increased CAFE standards in the new energy law to justify its denial of the California waiver:

EPA has determined that a unified federal standard of 35 miles per gallon will deliver significant reductions in greenhouse gas emissions from cars and trucks in all 50 states, which would be more effective than a partial state-by-state approach of 33.8 miles per gallon.

Warming Law says “EPA appears to be attempting to add a new test to the Clean Air Act” in requiring that California prove a local interest in addition to the “compelling” and “extraordinary” standards the Supreme Court said this problem meets.

Warming Law’s Tim Dowling notes that Johnson’s claim the waiver would create a “confusing patchwork of state rules” is typical industry rhetoric that is specious—only two sets of standards, national and California, would apply. “Johnson failed to explain how EPA has been able to grant EVERY other 209 waiver request in history without creating a confusing patchwork, but can’t do so here.”

Juliet Eilperin of the Washington Post reveals that Johnson overrode his staff.

In a PowerPoint presentation prepared for the administrator, aides wrote that if Johnson denied the waiver and California sued, “EPA likely to lose suit.”

If he allowed California to proceed and automakers sued, the staff wrote, “EPA is almost certain to win.”

The technical and legal staffs cautioned Johnson against blocking California’s tailpipe standards, the sources said, and recommended that he either grant the waiver or authorize it for a three-year period before reassessing it.

“Nobody told the administration they support [a denial], and it has the most significant legal challenges associated with it,” said one source, in an interview several hours before Johnson’s announcement, who spoke on the condition of anonymity because the official is not authorized to speak for the agency. “The most appropriate action is to approve the waiver.”

From the New York Times Editorial blog:

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.

By a vote of 314-100, the House of Representatives approved the Senate version of the energy bill this afternoon.

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.

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.

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.

The Senate is scheduled to consider the Farm Bill (H.R. 2419 with S.Amdt. 3500) and the energy bill (H.R. 6 with S.Amdt. 3841).

Under a unanimous consent agreement, all amendments to the farm bill were required to get 60 votes to end debate and be accepted.

In roll call vote 424, the Dorgan-Grassley amendment (S.Amdt. 3695) to the Farm Bill was rejected 56-43.

In roll call vote 425, cloture on the latest compromise version of the energy bill was rejected 59-40.

In roll call vote 426, the Klobuchar “means-testing” amendment (S.Amdt. 3810) to the Farm Bill was rejected 48-47.

The amendment, supported by the administration, would have limited subsidies to full-time farmers making less than $750,000 a year, and landowners whose primary income comes from outside the farm making less than $250,000 a year.

In roll call vote 427, the Tester-Grassley Competition Title packer price manipulation amendment (S.Amdt. 3666) to the Farm Bill was rejected 40-55.

The amendment, as explained by Tom Philpott:

Price manipulation is clearly prohibited by the Packers & Stockyards Act (PSA), but some judges have recently ruled that price manipulation is excused if a packer or processor can show “a legitimate business justification” for manipulating prices—such as gaining access to more livestock at the price they want to pay. This defense to price manipulation is not in the PSA and the court rulings, if allowed to stand, weaken the law substantially. The amendment filed by Senators Tester (D-MT), Harkin (D-IA), and Grassley (R-IA) will clarify that the PSA cannot be interpreted to include “a legitimate business justification” for market manipulation.

13/12/2007 at 08:30AM

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.

A roll call vote is expected at about 9:20 am on the motion to invoke cloture on the energy bill as passed by the House of Representatives on December 6.

By a vote of of 53-42 the cloture motion failed.

The following Democrats voted against cloture:

• Bayh (D-IN)
• Byrd (D-WV)
• Landrieu (D-LA)

The following Republicans voted for cloture:

• Coleman (R-MN)
• Collins (R-ME)
• Smith (R-OR)
• Snowe (R-ME)
• Thune (R-SD)

The following Republicans voted against cloture but previously had voted for the earlier Senate version of H.R. 6, which included the CAFE standard, but not RES or the tax title:

• Corker (R-TN)
• Craig (R-ID)
• Crapo (R-ID)
• Domenici (R-NM)
• Ensign (R-NV)
• Lugar (R-IN)
• Sessions (R-AL)
• Specter (R-PA)
• Stevens (R-AK)
• Sununu (R-NH)

The following Republicans voted against cloture but previously had voted for energy tax provisions similar to those in the House version:

• Crapo (R-ID)
• Lugar (R-IN)
• Grassley (R-IA)
• Roberts (R-KS)

Following the vote, the chamber resumed consideration of the farm bill (HR 2419).

07/12/2007 at 09:00AM

Final vote on energy package. The bill passes 235-181. The Senate vote is scheduled for Saturday.

Democrats against:

• Barrow
• Boren
• Boyd (FL)
• Gene Green
• Lampson
• Marshall
• Melancon

Republicans in favor:

• Bono
• Castle
• Gerlach
• Hayes
• Johnson (IL)
• Kirk
• LaHood
• LoBiondo
• Ramstad
• Reichert
• Ros-Lehtinen
• Shays
• Smith (NJ)
• Walden (OR)

06/12/2007 at 03:00PM