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'
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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
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,"
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
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
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,”
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.
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
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
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.
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