House Energy Panel to Markup Climate Bill Next Week, Release Language Thursday

May 12, 2009 07:00 PM
 

via a special arrangement with Informa Economics, Inc.

Panel leader Waxman makes compromises and says 'we're going to have the votes to pass this out of committee'


NOTE: This column is copyrighted material, therefore reproduction or retransmission is prohibited under U.S. copyright laws.


House Democratic leaders reached agreement on climate-change legislation that lowers earlier targets for emissions reductions and renewable-energy requirements and changes other key provisions from an early outline, in an effort to obtain enough votes for the measure to clear the panel in a markup session beginning next Monday with a goal to complete the process by the end of next week. House Energy and Commerce Committee Chairman Henry Waxman (D-Calif.) has been wooing Southern and Midwestern Democrats on his committee who have withheld support for his bill, fearing it would hurt the economies in their states.

"I think we have the basis of an agreement with members of the Democratic caucus," Waxman said, adding that a new version of the proposal would be made public Thursday and that he expects the Energy and Commerce Committee to vote on the measure next week. Waxman wants to have the bill ready for floor action before leaving next week for Memorial Day recess. Democratic leaders expect to bring the measure to the floor this summer.

Measure jumps to full committee action, not subcommittee. Rep. Rick Boucher (D-Va.), who led a bloc of members from coal and manufacturing states in negotiating for more moderate provisions, said one thing is certain: the bill will go directly to Waxman's full committee and not Rep. Ed Markey's (D-Mass.) Subcommittee on Energy and Environment, as the chairmen had originally planned. “We are moving toward a full committee process on a schedule [left up to] the chairman,” Boucher said.

Most if not all the Republicans on the panel will likely oppose the bill, but most Democrats will support the measure. "I expect we're going to have the votes to pass this out of committee," Waxman said.

In the full committee, Democrats hold a 13-vote majority, giving Waxman some leverage in offsetting the loss of a few Democratic votes.

Waxman's bill calls for capping emissions of greenhouse gases, and requiring companies to hold permits in order to emit such gases. Details are beginning to surface regarding which industries would have to pay for those permits, versus being given them free. Utilities dependent on coal and other carbon-intensive industries such as steel plants or oil refineries have been lobbying Congress to give them the permits for free, at least initially.

Waxman late Tuesday said he has agreed to amend the legislation so that it requires a cut in U.S. greenhouse-gas emissions of 17 percent below 2005 levels by 2020, rather than a 20 percent cut in that time frame, as called for in the original version of his proposal. Waxman noted that the bill also would provide for special projects to reduce emissions, such as reducing deforestation both domestically and worldwide. “That will allow us to get to a higher figure by 2020,” he said. Importantly, Waxman said he will not change the later reductions of 42 percent by 2030 and 83 percent by 2050.

Waxman said he agreed to give away to electric utilities 35 percent of the emissions permits that would be created by the bill, at least initially, rather than require them to pay for the permits, which Waxman said was “primarily to protect the rate payer. The local electric distribution companies would be expected to pass the savings on to consumers.

Other compromises: Under the revised language, auto makers initially would receive 3 percent of the permits free, and that certain trade-sensitive industries, such as aluminum, glass, steel makers and cement, initially would get 15 percent free.

Oil-state Democrats will meet with Waxman today to see whether additional allowances can go to refineries, which could garner additional votes for the measure, with expectation that the oil industry could get emissions allowances between 1 and 5 percent free.

Waxman made another key change to woo lawmakers. The first draft called for all states to get 25 percent of their electricity from renewable sources such as wind, solar, geothermal and biomass by 2025. Under the new version, the standard would be lowered to 15 percent by 2020, plus a requirement to reduce energy use by 5 percent by then through improved energy efficiency. Democrats from states that get most of their electricity from coal -- which has particularly high emissions -- had warned that the 25 percent standard could force them into a rapid, costly shift.

The bill would allow states a “swinging door” with their efficiency total, amounting to 3 percent in either direction -- a state could meet the overall standard with 12 percent to 18 percent from renewable sources and the rest from efficiency. If governors do not think their states can meet the standard it would be dropped to 12 percent for alternative sources with an 8 percent efficiency requirement, according to Markey.

The compromise would expand the definition of biomass that could be used to meet the standard. It would also allow the inclusion of hydropower plants built as far back as 1992. And the new language would adjust the baseline of total energy use so it does not include new nuclear energy or coal plants that use carbon sequestration.

Waxman said he did not think that compromise ruined the bill's environmental promise. "I think we're going to be right on track" with the changes that scientists recommend, he said.

The bill also will include a vehicle trade-in provision to provide incentives for people to buy more fuel-efficient vehicles.

The next steps: House Majority Leader Steny Hoyer (D-Md.) said he hopes the House will vote on the bill before the August recess. “But that’s just a goal,” he said.

Senate Majority Leader Harry Reid (D-Nev.) said he expects Senate panels will work through the summer on separate energy and climate bills, which he hopes to combine into a package this fall, after passing health care legislation.


Comments: Cap-and-trade legislation is coming, but hard battles are ahead on the House floor and definitely in the Senate. While Democratic leaders and President Barack Obama want a finished measure by year's end, many observers say the finish line will be pushed into 2010 and perhaps after 2010 elections. President Obama wants the matter finished before the climate-change summit in Copenhagen in early December, but U.S. officials attending that confab at least want to have a solid idea on how final U.S. legislation will deal with the matter.

The agriculture industry is keen on any concessions for their sector. And it appears the ag industry is woefully behind in getting assessments on how climate-change language may impact the business of agriculture. But some say that while the ag industry may be woefully behind, it is hard to gauge impacts without the details that are now just coming into focus. .

Meanwhile, from the administration side comes an interesting revelation in the form of a memo from the Office of Management and Budget (OMB), which raises questions about EPA's proposed finding that carbon dioxide and other greenhouse gasses are a public health danger. The document, a collection of views from various government agencies, notes, "Making the decision to regulate carbon dioxide ... is likely to have serious economic consequences for regulated entities throughout the U.S. economy, including small businesses and small communities."

Some Republicans are pouncing on this development and Democratic lawmakers and Obama administration officials are actively working their spin on the matter.

The Democrats' counter-response. Despite the questions raised in the 9-page document, OMB Director Peter Orszag said, "The bottom line is that OMB would have not concluded review ... if we had concerns about whether EPA's finding was consistent with either the law or the underlying science." For EPA's part, Administrator Lisa Jackson told lawmakers Tuesday that the finding would not necessarily mean regulation. An EPA spokesperson stressed the statement by Jackson was not a shift in EPA's stance, stressing that the proposed finding doesn't mean instant regulation.

But EPA's Jackson also told lawmakers, "It is true that if the endangerment finding is finalized, EPA would have the authority to regulate green-house-gas emissions and...we would be judicious, we would be deliberative, we would follow the science, we would follow the law."

So not only will ag interests have to keep their eye on Congress and cap and trade legislation, but also have to have a focus on EPA, especially in the event their endangerment finding on greenhouse gasses is finalized. Time for aggies to beef up their focus, action, analysis and staffing on this area.


NOTE: This column is copyrighted material, therefore reproduction or retransmission is prohibited under U.S. copyright laws.


 

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