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Policy News Update

October 07, 2008

In this issue: [Contract All : Expand All]

ENERGY: CONGRESS APPROVES, PRESIDENT BUSH SIGNS MODIFIED BAILOUT PLAN THAT INCLUDES RENEWABLE ENERGY TAX EXTENSIONS

On October 3rd, the House voted 263-171 to approve a modified version of the Wall Street rescue package they rejected earlier in the week. The new plan, which President Bush signed later that day, was adjusted by the Senate to attract additional votes—it now includes a $17 billion energy tax package to provide the much sought-after renewable energy tax extensions:

Eight-year extension of credits for investments in solar projects

One-year extension of production tax credits for wind projects

Two-year extension of production tax credits for other alternative energy projects, most notably those involving geothermal and biomass

Removal of $2,000 cap on residential solar credits

Extension of credits for installing alternative fuel pumps at gas stations

$1.5 billion in credits for advanced coal projects to control carbon emissions

Credits for underground  carbon sequestration on a per-ton basis

Incentives for green technology and innovation, including biofuels, plug-in vehicles, and energy efficient buildings and appliances

Had the incentives been allowed to lapse, as many feared they would, many alternative energy projects would have been stalled or abandoned. The bill pays for the energy tax breaks in part by limiting oil industry tax incentives—estimates indicate that the largest oil industry revenue-raiser will raise $4.9 billion over a decade. Although the industry argued against these cuts, warning that they could slow investment in domestic oil projects, many other fossil fuel credits remain, including incentives for refinery projects to process oil shale and oil sands.

APPROPRIATIONS: SENATE APPROVES CONTINUING RESOLUTION THROUGH MARCH 2009, ALLOWS OFFSHORE DRILLING MORATORIUM TO LAPSE

On September 30, President Bush signed off on a $600 billion continuing resolution (CR). The package, which Congress passed days prior, will fund most federal agencies at existing levels through March 2009.

Under intense political pressure and with November elections looming, Democrats allowed the offshore drilling moratorium, which is renewed annually as part of the appropriations process, to lapse this year. As a result, federal waters along the Atlantic and Pacific coasts, as well as parts of the eastern Gulf of Mexico, are now without protections that have, in many cases, existed since the early 1980s.

Drilling in newly unprotected areas is many years away, however, so Congress and the next president could work to have the bans reinstated. House Natural Resources Chairman Nick Rahall (D-WV) said his committee would keep a close eye on the drilling situation next year, and that he would hold a series of hearings on lifting the moratorium.

The CR does contain some additional funding, most notably:

     manufacture advanced technology vehicles

The firefighting funding will be allocated as follows:

The Ecological Society of America was a signatory on a joint letter to appropriators calling for additional funds to cover U.S. Forest Service and Department of Interior wildland fire operations.  The letter noted the perennial problem of the USFS having to take money out of non-fire accounts to support fire suppression efforts, which disrupt or stop many important agency programs. 

The CR is not good news for science funding. Although Senate appropriators had endorsed and even added to large requested increases for the National Science Foundation (NSF), the Department of Energy’s Office of Science, and Commerce’s National Institute of Standards and Technology laboratories, the next Congress may have to start from scratch. Meanwhile, these three science agencies will begin fiscal year 2009 with funding levels at or slightly below those of 2008.

For NSF, this stands in stark contrast to the double-digit percentage gain the agency had anticipated. The Bush Administration had requested a 12.5 percent increase in 2009 funding (from $6.0 to $6.9 billion,) a large increase that would have kept NSF on track to double its budget between 2006 and 2016. Although the Senate Appropriations Committee drafted a spending bill that matched this request, the CR means that NSF will start next year at the existing level of funding minus $63 million in 2008 supplementals (funding that is not included in the president's annual budgets or congressional budget resolutions, but is instead approved by Congress on a case-by-case basis.) The CR invests only $4.5 billion in NSF research and development, which is $23 million less than previous levels and almost $700 million less than the requested amount. Similarly, NSF’s education and human resources programs will enter 2009 with less money than the previous year, even though they had been set to increase 3.3 percent to $790 million, on top of $40 million just received as part of a 2008 supplemental bill.

For more information on how the continuing resolution will impact science funding, please visit the AAAS website: www.aaas.org/spp/rd/upd908.htm

CARBON MARKET: MODERATE SENATE DEMOCRATS FORM “GANG OF 16” TO REVISIT CAP-AND-TRADE LEGISLATION

Last June, the Senators Joe Lieberman (I-CT), John Warner (R-VA) and Barbara Boxer (D-CA) introduced cap-and-trade legislation that quickly fizzled amidst uncertainty, particularly pertaining to cost. Now, a group of 16 moderate Senate Democrats with close ties to business and organized labor is working toward a new, more economically viable proposal. The senators represent a critical cross-section of industries and interest groups, including coal, labor, agriculture, and manufacturing, and come primarily from the Midwest, the Rust Belt, and the Rocky Mountain states.

Known as the “Gang of 16,” the group is still in the process of gathering information and sorting through several hot-button issues that have plagued the cap-and-trade debate, including the question of how to distribute allowances to energy-intensive U.S. manufacturers and how to stimulate job creation through low carbon energy technologies. They have not yet prepared any legislative language, but will likely step up such efforts after the November elections. Meanwhile, they have identified four areas on which to focus: offsets, technology, cost containment, and international.

Within these areas, they have identified a number of priorities:

The farming incentives in particular could yield a significant number of votes, since many critical states contain soils with the highest potential for carbon sequestration.

The “Gang of 16” will likely emerge as a key player, if not leader, as the energy debate continues in the next Congress. They represent a valuable political coalition that must be heard if a cap-and-trade bill is to net the 60 votes needed to beat a filibuster.

Already, aides from the group have touched base with Senate staff of Democratic presidential nominee Barack Obama, and have met with several nonpartisan voices in the climate debate, including the U.S. Climate Action Partnership, Pew Center on Global Climate Change, Resources for the Future and Duke University's Nicholas Institute for Environmental Policy Solutions.

Labor groups such as the United Auto Workers, United Mine Workers of America and United Steelworkers of America have also responded to queries from the Senate offices.

"This group is critical not only politically, as swing state moderates, but also because they are peeling back the key economic and budgetary issues that gave so many senators pause in June," said Paul Bledsoe, a spokesman for the National Commission on Energy Policy. "These issues will continue to be central, especially given concerns about the economy."

The economic crisis, however, may divert Congress’s attention away from climate change in 2009. Furthermore, the Gang’s prioritization of industry may divide them from fellow Democrats like Barbara Boxer (CA), who will want to push for an even more aggressive climate package.

Scott Segal, an attorney representing the electric utility and petroleum refining industries, suggested that the "Gang of 16" may push the legislation in a direction that is more responsive to business and labor interests, especially in a tender economy, and warned that the push back from Boxer and her allies would be equally strong.

Traditionally, groups of senators working on a contentious issue cross party lines to come up with consensus proposals, as seen in the recent "Gang of 20" that recommended an expansion of domestic offshore drilling. In the case of climate change, likely Republicans include Bob Corker (TN), Norm Coleman (MN), Arlen Specter (PA), and John Sununu (NH), although Coleman and Sununu face tough re-election fights. "Gang of 16" aides said they were minimizing contact with Republicans, however, until after the upcoming elections.

The Gang of 16 is presently comprised of: Blanche Lincoln and Mark Pryor (AR), Ken Salazar (CO), Evan Bayh (IN), Debbie Stabenow and Carl Levin (MI), Claire McCaskill (MO), Kent Conrad and Byron Dorgan (ND), Ben Nelson of (NE), Jeff Bingaman (NM), Sherrod Brown (OH), Tim Johnson (SD), Jim Webb (VA), and John Rockefeller and Robert Byrd (WV). The Gang could grow even larger in 2009 if Democrats extend their majority. A month before the elections, Democratic candidates stand a good change of seizing GOP seats in Alaska, Colorado, Kentucky, Minnesota, New Mexico, North Carolina, and Virginia. If elected, several of the new senators would represent constituents with similar concerns about climate legislation.

SUPREME COURT: “BANNER YEAR FOR ENVIRONMENTAL CASES”

This fall, the Supreme Court will weigh in on several important environmental cases.

"This is a banner year for environmental issues, and the justices aren't done granting [new cases for review] yet," said Jody Freeman, director of the Harvard Law School Environmental Law Program.

There is some concern, however, that the string of new cases may pose trouble for environmentalists, who had been on the winning side in the lower courts.

"Generally speaking, the Supreme Court is where environmental protections go to die, and this term hasn't promised to be any more favorable," said John Echeverria, director of the Georgetown University Law Center's Environmental Law and Policy Institute.

Among the most significant cases are:

Winter v. Natural Resources Defense Council (NRDC)

Oral Arguments: October 8

Arguably the most high-profile environmental case of the new term, the conflict centers on whether the Navy can be barred from conducting sonar training exercises that may pose a threat to whales off the coast of Southern California.

In March 2007, NRDC sued to block the Navy from using "mid-frequency active" sonar, arguing that it harms marine mammals, and thus violates several environmental laws. In January, the U.S. District Court for the Central District of California sided with NRDC and issued a preliminary injunction.

In response, President Bush and the Council on Environmental Quality stepped in and exempted the Navy from the injunction, contending that it jeopardized “the Navy's ability to train sailors or Marines for wartime deployment during a time of hostility." After the exemption was rejected by U.S. District Judge Florence-Marie Cooper and the 9th U.S. Circuit Court of Appeals, the Navy and the Bush administration sought Supreme Court intervention.

The Ecological Society of America signed onto NRDC’s brief as an amicus, or “friend of the court.” ESA President-Elect Mary Power’s research was cited in the document.

Summers v. Earth Island Institute

Oral Arguments: October 8

The Earth Island Institute accused the U.S. Forest Service of violating the Appeals Reform Act by enacting regulations that severely limited the rights of notice, appeals, and public comment on its timber management decisions.

At stake, according to the Environmental Law Institute’s Jay Austin, is not just the integrity of Forest Service regulations, but the precedent for how lawsuits from environmental groups are handled. "In our view,” he said, “the government has taken the position that environmental groups and other kinds of public interest groups aren't allowed to challenge a rule on its face. A bad ruling from the Supreme Court would require environmental and other public interest groups to bring dozens of dozens or maybe hundreds of lawsuits every time there's a timber sale -- rather than one lawsuit to address a Forest Service regulatory problem that should be struck down going forward."

Entergy Corp. v. EPA, PSEG v. Riverkeeper, and Utility Water Act Group v. Riverkeeper

Oral Arguments: December 2

The justices will decide whether the Clean Water Act allows the Environmental Protection Agency (EPA) to conduct cost-benefit analyses to determine the most environmentally friendly technology at existing cooling water intake facilities, and then require these facilities be retrofitted to comply with the latest determinations. Previously, EPA had only conducted such analyses for new facilities. The case arrives at the Supreme Court after an appeals court struck down EPA’s cooling water intake regulations, ruling that no such balancing tests may be used, and that companies must adopt the best technology available.

Burlington Northern and Santa Fe Railway Co. v. U.S.; and Shell Oil Co. v. U.S.

This case addresses the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA), the Superfund law, and whether it allows the government to hold companies respond for environmental cleanup costs even if the companies were not directly responsible for contamination. In this dispute, the 9th Circuit ruled that Shell Oil Co. and Burlington Northern Santa Fe Corp. should be held jointly responsible for cleanup costs at a chemical distribution plant near Bakersfield, California. Although the chemical distributer, Brown & Bryant Inc. was ultimately responsible for the contamination, the rationale behind the ruling was that Shell manufactured the two chemical contaminants and that Burlington Northern leased the property to the distributer. 

Coeur Alaska Inc. v. Alaska Conservation Group

Later this fall, the court will also hear a suit over whether the Army Corps of Engineers has the authority to issue permits for dumping waste into waterways, without satisfying all of the pollution restrictions set out under the Clean Water Act.

The Corps granted Idaho-based gold mining company Coeur d'Alene Mines Corp. a permit to dump 4.5 million tons or rock waste into a lake in Alaska’s Tongass National Forest. In response, several environmental groups filed suit, arguing that the permit violated sections 301(a), 301(e) and 306(e) of the Clean Water Act.


Sources: Environment and Energy Daily, Greenwire, The American Association for the Advancement of Science, The Associated Press, Petition for Certiorari (Entergy Corporation,) www.supremecourtus.gov

Send questions or comments to Nadine Lymn, ESA Director of Public Affairs, Nadine@esa.org; Piper Corp, Policy Analyst, Piper@esa.org

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