March 19, 2009

In This Issue

PUBLIC LANDS: SENATE USES PLACEHOLDER BILL TO AID PASSAGE IN THE HOUSE

On March 19, the Senate passed the much discussed public lands omnibus 77-20. The bill includes measures to address land management and water supply issues, and would create or expand a significant number of public lands, including more than 2 million acres of wilderness in nine states. For more details, see the January 22 edition of the ESA Policy News at: www.esa.org/pao/policyNews/pn2009/01222009.php

The bill first passed through the Senate in January, 74-21, before coming up two votes short of the two-thirds majority needed to pass under a suspension of the rules. A suspension of rules, which blocks amendments and motions to recommit, is one of the several legislative maneuvers employed by the bill’s proponents to avoid lengthy delays and difficult votes on GOP amendments.

In another such maneuver, Senate leaders provided a second chance for the legislation by stripping the contents of a bill that the House already passed (HR 146) and replacing it with the omnibus bill. Because the bill already cleared the House, it would need only a simple majority to concur with the Senate amendment. HR 146 was previously a proposal to protect Revolutionary War battlefields.

Senator Tom Coburn (R-OK) has been the measure’s staunchest opponent, and stalled debates for several months last year. He opposed several of the provisions, calling particular attention to bills that he said would prevent energy development on public lands, undermining the country’s efforts to meet its energy needs domestically. But according to Senate Energy Committee ranking member Lisa Murkowski (R-AK), the bill’s wilderness designations will not reduce oil or gas availability since the land in question is already being managed for conservation purposes.

Majority Leader Harry Reid (D-NV) reached an agreement with Coburn wherein Reid would allow votes on the Oklahoma Senator’s six amendments in return for dropping objections to the bill.

These amendments included measures to:

  • Prohibit the use of eminent domain to acquire any of land the omnibus seeks to protect.
  • Strike any provisions that could restrict renewable energy development on public lands
  • Remove what Coburn considers to be wasteful spending (e.g. $3.5 million to celebrate the 450th anniversary of St. Augustine, Florida)
  • Bar new construction in national parks until the National Park Service’s $9 billion maintenance backlog has been addressed and all current park sites are certified as fully operational
  • Require an annual report detailing the total size and cost of federal property
  • Protect park visitors and scientists from criminal penalties associated with unintentionally collecting stones that contain fossils.

Of these amendments, only the measure pertaining to fossil collection passed.
In spite of the many stumbling blocks, the omnibus has received a great deal of bipartisan support. Senator Mike Crapo (R-ID) commended the bill, saying, “I don’t believe there is a single piece of legislation in this bill that does not have the support of the senator of the state those lands are in.”

CLIMATE LEGISLATION: SENATE WEIGHS OPTIONS ON 100 PERCENT AUCTION, BUDGET RECONCILIATION

Emissions Credits: Auction vs. Allocation

According to Senate Energy and Natural Resources Chairman Jeff Bingaman (D-NM), the final version of Senate cap – and-trade legislation is unlikely to include the full auction of emissions credits assumed in President Obama’s budget blueprint.

The blueprint estimates that a 100 percent auction would generate roughly $650 billion, most of which would go toward developing clean energy technologies and reducing energy costs for consumers. The alternative—allocating emission credits to utility companies-would reduce these revenues but alleviate the initial burden that the low-carbon will place on the companies. The European Union erred heavily on the side of allocation when instituting its own cap-and-trade program, a move that critics say created large profits for utilities at the expense of consumers.

Bingaman, while cautious of allocating credits, warned that starting with a 100 percent auction could overburden utility companies, which would then pass the costs onto their customers. He therefore supports setting a ceiling and floor for carbon prices, sometimes referred to as a “price collar.”

Sixty of the country’s major electric utility companies have formed a coalition to push for a credit allocation system outlined in a recent consensus position organized by the Edison Electric Institute (EEI) trade group. The consensus was not easy to reach and remains fragile; the coalition is comprised of a variety of companies with conflicting interests and views of how the allocation process should proceed. Lawmakers have been largely appreciative of the cooperative effort, which was originally urged by former House Energy and Commerce Chairman John Dingell (D-MI). EEI’s position calls for a transition from free credits to an auction. It does not specify a timetable, but industry sources have suggested that a complete auction could happen within a decade.

Cap-and-Trade: Climate Bill vs. Budget Reconciliation

Concerned that emissions legislation may not receive the 60 votes necessary for passage in the Senate, Carol Browner, President Obama’s top energy and climate aide, is urging Senate Democrats to consider using the filibuster-proof budget reconciliation process as a way of moving a cap-and-trade bill forward. Obama’s budget blueprint included revenues from a cap-and-trade program, suggesting a means of instituting the program as part of the budget rather than through a separate climate bill. Budget reconciliation measures allow Congress to change existing laws in order to meet the specifications of the coming year’s budget resolution.

If included in the 2010 budget, climate legislation would need only a simple majority – 51 votes – to pass through the Senate. Currently, 47 Senators would likely support a cap-and-trade bill. Another 21 are undecided, and would require significant concessions before lending their support—this group includes Senators Kent Conrad (D-ND), Debbie Stabenow (D-MI), Mark Begich (D-AK), Lisa Murkowski (R-AK), Sherrod Brown (D-OH) and Carl Levin (D-MI).

Senate Majority Leader Harry Reid (D-NV), who plans to hold a floor debate later this year on a comprehensive energy and climate bill, says he is considering the use of reconciliation. This could be a risky move, considering the views of some moderate Senate Democrats needed to write a winning bill, including Conrad, who chairs the Budget Committee, and Max Baucus (MT), who chairs the Finance Committee.

Reid has suggested that the reconciliation might receive some support from Republicans, but many GOP Senators, including several fence-sitters, have spoken out against the approach. Murkowski, the Energy and Natural Resources Committee’s ranking member, recently voiced her objections to “attempts to do an end-run around Congress and mandate what would be the biggest change in our energy policy in the nation’s history.” Murkowski supports one version of cap-and-trade legislation, and added that her panel is “working full tilt” on energy legislation that “should not be disrupted by a fast-track procedural move.”

These objections have led some to question whether even 51 votes would be achievable given the contentious nature of the reconciliation process. Furthermore, although it would prevent a filibuster, reconciliation would still be subject to scrutiny and possible blockage under the “Byrd Rule,” which prohibits the Senate from using the process to move matters labeled “extraneous” under the Budget Act. All senators have the ability to raise a point of order (which can only be waived by a 60-vote majority) against provisions they deem extraneous.

RENEWABLE ENERGY: INTERIOR, FERC TO COOPERATE IN SITING OFFSHORE HYDROPOWER PROJECTS

The Interior Department and the Federal Energy Regulatory Commission (FERC) signed a memorandum of understanding on March 16 agreeing to move forward cooperatively in the siting of offshore renewable energy infrastructure. This move represents the resolution of a years-long conflict over which agency oversees offshore alternative energy, a dispute that has hindered efforts to develop offshore hydroelectric projects.

The Energy Policy Act of 2005 gave Interior’s Minerals Management Service permitting authority over the production and transmission of renewable energy sources on the outer continental shelf, but FERC’s jurisdiction encompasses the development of all hydropower resources. The memorandum resolves the overlap by granting FERC primary responsibility for managing offshore energy licensing, and calling for the “active involvement” of Interior. In other words, FERC will be in charge of siting, and Interior will be in charge of leasing. FERC has clarified, however, that it is singularly interested in hydropower and will leave wind energy projects to Interior. This distinction leaves wind power projects at a temporary disadvantage while the Interior rules are being finalized – since FERC already has the ability to permit offshore hydropower projects, these projects could effectively cut ahead of wind projects (which will be on hold until the rules are finalized) in the line for rights to offshore tracts.

Interior Secretary Ken Salazar says the agencies could finalize offshore energy rules in as few as two months if no major changes are made. Final steps include a series of regional meetings and a public comment period.

Energy and Natural Resources Chairman Jeff Bingaman (D-NM) has expressed some skepticism about the memorandum, however, stating that such resolutions often seem simpler on paper than in practice. Bingaman’s concerns center on the energy bill that his committee is tasked with crafting—the bill could settle the jurisdictional conflict legislatively if there is a chance the memorandum doesn’t provide sufficient resolution. A legislative fix would provide less flexibility, but would also guard against future stalemates.

INTERIOR: SALAZAR FACES BACKLASH FOLLOWING LEASE CANCELLATIONS

Interior Secretary Ken Salazar is facing GOP criticism over his recent halting of Bush administration oil shale research and development leases, as well as the cancellation of oil and gas leases on 77 parcels of federal land in Utah. Interior will review the leases to see if they are appropriate, but Republican lawmakers are expressing concerns that Salazar’s early moves have followed a trend of slowing production. Particularly opposed to the cancellations is Utah Senator Bob Bennett (R) who says the leases took years to obtain, and had undergone full environmental review. Bennett, who says he has received inadequate response to his questions about the decision, is now seeking to draw attention to his objections by blocking the nomination of David Hayes as Interior deputy secretary.

Defending the administration’s commitment to domestic energy production, Salazar outlined the following activities:

  • The Bureau of Land Management has held seven onshore oil and gas lease sales in the last seven weeks, offering leases that cover more than a million acres in the West; another 32 onshore leases are scheduled this year.
  • The U.S. Geological Survey will soon release a report to help identify the country’s best geologic formations for carbon storage.
  • Salazar recently established a task force to help Interior identify renewable energy zones on public lands. Interior will also work with other federal agencies, tribes, and states to determine where transmission corridors are needed. The department has already identified about 5,000 miles of corridors in the West.
  • Salazar participated in a Gulf of Mexico lease sale earlier this week, stating that the 34.6 million acres covered by the sale could produce as much as a billion barrels of oil and enough gas to supply US homes for a year. 12.5 percent of the revenue will go to the Land and Water Conservation Fund.
  • Still, the Interior Secretary has not backed down from plans outlined in Obama’s 2010 budget to repeal several oil-industry tax incentives and impose new taxes on Gulf of Mexico producers, eliminating $31.5 billion in “oil and gas company preferences” over a decade.

CARBON CAPTURE AND STORAGE: HEARINGS CONSIDER VIABILITY OF CCS TECHNOLOGY

In the series of hearings leading up to the House and Science climate debates, much attention has been paid to carbon capture and storage (CCS) technologies.

Proponents say that federal support for CCS technologies will help transition the power sector into a low-carbon economy while keeping energy costs manageable for American households. Still, they acknowledge that deploying these technologies will present an array of challenges, not the least of which is a prohibitive price tag. To make the costs more manageable, Representative Rick Boucher (D-VA) plans to reintroduce legislation (HR 6258) to establish a support fund for commercial-level CCS deployment. When introduced last year, the industry-backed bill called for a $1 billion fund, which would be financed by utility companies who could then pass the costs on to customers. Boucher says that he has made only minor changes to the legislation, which he intends to introduce in the next few days.

But costs aside, many critics are concerned about the environmental risks of the technologies, such as the possibility of carbon stored underground threatening groundwater supplies or leaking back into the atmosphere.

In addition, CCS technologies are highly water intensive. In a hearing focused on water usage in energy projects, Carl Bauer, director of the Energy Department’s National Energy Technology Laboratory, pointed to CCS in particular as having drastic implications for freshwater resources. Outfitting coal plants to capture 90 percent of their carbon emissions would more than double the amount of water used per unit of electricity generated. This exceeds the notoriously high water demands of nuclear energy production, albeit narrowly: Nuclear power plants consume 40 percent more water than their coal counterparts. Water cooling technology can improve efficiency to some degree, but increases power costs.

Energy and Natural Resources Chairman Jeff Bingaman (D-NM) and ranking member Lisa Murkowski (R-AK) are currently sponsoring a bill (S 531) to more thoroughly evaluate how energy projects impact water resources.

CLIMATE MONITORING: APPROPRIATORS FOCUS ON SCIENCE, SATELLITE PROGRAM

Heeding warnings from an international group of scientists, Congress has placed an even greater focus on climate change science and monitoring. Earlier in March, the group gathered in Copenhagen and warned that greenhouse gas emissions are outpacing the predictions outlined in the most recent report from the Intergovernmental Panel on Climate Change, and are likely irreversible.

In the House, the Commerce-Justice-Science panel has scheduled several hearings to examine the latest climate science and the state of environmental satellite programs at the National Aeronautics and Space Administration (NASA) and the National Oceanic and Atmospheric Administration (NOAA).

A 2007 National Academy of Sciences report warned that cost-cutting the two agencies was impairing the United States’ ability to monitor climate change and severe weather. Congress attempted to address this in recent economic legislation: the recently passed stimulus package awarded NASA and NOAA roughly $1.8 billion, much of which was directed toward climate satellites and science programs, and the 2009 omnibus spending bill increases the budgets of both agencies. Still, the success of climate science and satellite programs will rest on sustained funding in the years to come.

THE NEW ADMINISTRATION: OBAMA VOWS TO RESTORE SCIENTIFIC INTEGRITY

On March 9, President Obama signed a presidential memorandum directing his chief science adviser to develop a plan within the next 120 days to ensure that the administration:

  • Bases its policies on the soundest science
  • Appoints science advisers based on credentials rather than politics
  • Is transparent about scientific decisions

Many tout this as a major departure from the previous administration’s approach to science, which was often criticized for being overly influenced by politics. Still, executive orders last only while the issuing president is in office; holding future administrations to the same principles would require legislation from Congress.

John Holdren, Obama’s nominee to lead the White House Office of Science and Technology Policy, will likely be in charge of drafting new science policies, but his confirmation remains on hold due to an unrelated political issue.

FOREST SERVICE: AGENCY CONSIDERS NEW REGULATIONS ON SUBSURFACE ENERGY RESOURCE DEVELOPMENT

Late last year, the Forest Service published a notice in the Federal Register covering plans to write regulations for private drilling and mining operations in national forests. The notice did not lay out any specifics, but instead called for public comment to help determine the nature and scope of the rulemaking. The comment period ended February 27, but will be reopened for another 30 days in the near future.

The move is aimed at addressing tensions in eastern forests, where the federal government only owns rights to above-ground resources. This jurisdictional limitation is resulting in a growing number of companies moving to tap sources oil and gas beneath the forest floor. Of particular concern is Pennsylvania’s Allegheny National Forest, which sits upon the Marcellus Shale, and where oil and gas companies own subsurface rights for more than 90 percent of the forest. The popular tourist destination is now the subject of four lawsuits, including one from the Sierra Club, which alleges that unregulated drilling threatens habitat, and that the Forest Service violated the National Environmental Policy Act (NEPA) by allowing development without environmental analysis.

Largely in question is whether the Forest Service is legally obligated to regulate oil and gas drilling on its lands, or if it is prohibited from doing just this. On one side of the debate are environmental groups, who argue that NEPA, the Endangered Species Act, and other policies necessitate a new permitting system that includes comprehensive environmental assessments, habitat and wildlife protection, and prompt cleanups. In contrast, industry representatives have filed comments disputing the agency’s right to establish new regulations. They argue that the 1911 Weeks Act, which allowed the Forest Service to acquire many eastern forests, limits agency authority over subsurface minerals to properties where such authority is specifically granted in the deed.


Sources: Environment and Energy Daily, Greenwire, Politico, Desert News

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