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Policy News Update

July 16, 2010

In this issue: [Contract All : Expand All]

CLIMATE DEBATE: SENATE POISED FOR ENERGY DEBATE THIS MONTH; FATE OF CARBON CAP UNCERTAIN

Senate Majority Leader Harry Reid (D-NV) plans to hold a floor debate on climate and/or energy legislation before the August recess, though it remains to be seen what kind of bill the chamber will take up. Reid has been clear that he will only consider a package capable of garnering the 60 votes necessary for passage, and a number of proposals have surfaced in recent weeks as senators debate the best—and most feasible—way to address the nation’s climate and energy challenges this year.

Major unanswered questions:

Should carbon be priced? Carol Browner, the top White House climate advisor, recently reiterated President Obama’s commitment to pricing carbon. Still, many lawmakers insist that such an approach would be equivalent to a carbon tax and would deal a devastating blow to the already ailing economy. Given the current recession, the approaching midterm elections, and the packed Senate calendar, a number of senators on both sides of the aisle are calling for an energy-only bill, which would include a renewable energy standard (RES), incentives for clean energy technologies, and compromises in offshore drilling and nuclear energy development. Such a bill would be based on S 1462, the energy bill passed out of the Senate Energy and Natural Resources (ENR) Committee last year. For more information on S 1462, see the June 19, 2009 edition of the ESA Policy News at: www.esa.org/pao/policyNews/pn2009/06192009.php

Energy-only proponents say that the Senate shouldn’t squander the opportunity to move bipartisan legislation on clean, domestic energy by weighing it down with controversial measures on climate. But passing an energy bill could hurt future efforts to cap emissions by taking a number of key bargaining items out of play. Nuclear and offshore drilling provisions, for example, have long been used to attract conservative support. If they’re enacted in an energy-only bill, climate proponents won’t be able to use them as leverage to win the necessary votes down the road.

Should the Environmental Protection Agency (EPA) be preempted? The Obama Administration and Congress agree that greenhouse gas emissions should be regulated legislatively, rather than by EPA. The economic impacts of federal agency regulation would be much greater than those resulting from a climate law, since legislation passed by Congress could include provisions for industry and consumers to soften the blow of a carbon pricing scheme. Still, the Supreme Court recently found that greenhouse gasses endanger human health and that EPA is thus legally bound, under the Clean Air Act, to place restrictions on emissions. Accordingly, the agency has been working to roll out emission regulations—the only way to halt this process is through legislation. Proposed carbon pricing bills include language to preempt EPA, ensuring that the climate law would exclusively dictate restrictions on carbon dioxide.  While this approach is widely accepted, some climate advocates worry that if emission controls aren’t stringent enough—or aren’t included at all, as could be the case with an energy-only bill—such preemption could remove an important avenue for reducing emissions, without providing an adequate legislative replacement. Environmental groups and several liberal lawmakers have been clear that they will oppose an energy-only or weak climate bill that preempts EPA.

Will industry support a carbon price tag? It would be virtually impossible at this stage for a climate bill to pass without industry support. Senators John Kerry (D-MA) and Joe Lieberman (I-CT), who are heading up the push for a bipartisan carbon-pricing bill, have therefore changed their approach a great deal in recent weeks to appeal more to industry groups. Abandoning the economy-wide pricing strategy outlined in the “American Power Act” they unveiled in May, the senators are now pursuing a utility-only approach, designed to limit economic impacts by regulating emissions from only electric utility companies. Kerry and Lieberman have been in talks with Maine Senator Olympia Snowe, who has been supportive of a utility-only approach, though she has not yet stated that she would vote for one. The utility industry represents a good starting point, since it has long been subject to market-based rules and companies are planning to make significant new investments in the coming decades.

Indeed, some companies have spoken positively about the bill, saying it would provide utilities with needed market certainty. Still, the senators must continue working towards industry-wide approval. Kerry and Lieberman recently met with leaders from the Edison Electric Institute (EEI), which represents 70 percent of the electric utility industry—afterwards, EEI officials said that important issues remain unresolved, including industry demands for concessions on “conventional” air pollutants, such as smog and soot, and a favorable distribution of allowances for greenhouse gas emissions. Kerry and Lieberman, meanwhile, have characterized the talks as “productive” and have indicated their willingness to compromise, though they will look to the Obama administration to determine which parts of the Clean Air Act are available for negotiation. Kerry has vowed not to soften any existing restrictions on conventional pollutants.

But while the approach is intended to limit impacts to the manufacturing industry, manufacturing representatives have spoken out in opposition, arguing that increased energy costs would have the same effect as an economy-wide cap. Some have called for measures that would give companies in their sector the ability to opt in to a emissions trading system, which would qualify them for the cost-reduction provisions available to utilities.

The Senate has a variety of measures from which to choose, though Reid will ultimately make the call on which to roll into the energy package. So far, he is considering utility-only proposals from Kerry and Lieberman, as well as from ENR Chair Jeff Bingaman (D-NM).

Kerry-Lieberman: According to an unconfirmed draft, the emission reduction goals in Kerry and Lieberman’s new approach would apply only to electric utilities but would follow the timeline established in the “American Power Act”: 17 percent below 2005 levels by 2020 and 83 percent by 2050. So far, the new proposal does not include details on how emission allowances would be allocated—a major source of dispute throughout the congressional climate debate. Many of the remaining details on emissions would reflect those in the original proposal, including language on domestic and international offsets, relief for those disproportionately impacted by the new system, and support for commercial carbon capture and sequestration.

Bingaman: Bingaman’s proposal would also begin with a 17 percent cut by 2020. It would then aim to cut emissions by 42 percent by 2030. The cap would go into effect in 2012, for utilities that emit more than 25,000 metric tons of carbon dioxide-equivalent each year. Large manufacturers would be permitted to opt in to the program.

GULF OIL DISASTER: HOUSE COMMITTEE ADVANCES PIECES OF RESPONSE PACKAGE; SENATE APPROPS SUBCOMMITTEE CONSIDERS DISPERSANT RESEARCH

Though the BP well appears to be capped and holding, the US will be responding to the oil already spilled into the Gulf of Mexico for quite some time. Since returning from the Independence Day recess, Congress has been working to move forward with its response, both through offshore drilling-specific legislation and through the appropriations process. Highlights include:

RAHALL BILL: On July 15, the House Natural Resources Committee voted 27-21 in favor of a bill from Chair Nick Rahall (D-WV) to reform federal oversight of offshore drilling. The legislation—a revised version of HR 3534, an energy reform bill that Rahall introduced last fall—will likely be incorporated into the broader House package addressing the disaster in the Gulf. That package is expected to head for the floor later this month. For more information on the Rahall bill, see the July 2 edition of the ESA Policy News at: http://www.esa.org/pao/policyNews/pn2010/07022010.php

No Republicans voted for the measure, and Democrats Stephanie Herseth Sandlin (SD) and Dan Boren (OK) also opposed it. Major objections centered on the inclusion of provisions unrelated to the Gulf disaster. Rahall countered that those provisions were part of HR 3534. “The event in the Gulf of Mexico ... does not change the need for those reforms," he said. "In fact, it makes the need even more pressing."

GULF SPILL COMMISSION: On July 14, the House Natural Resources Committee unanimously agreed to create a commission—similar to the 9/11 Commission—to investigate the disaster in the Gulf and ban BP from obtaining new offshore oil leases. Under the measure, sponsored by Representative Bill Cassidy (R-LA), President Obama would name the commission chair—congressional leaders would select the 10 other members, with five appointments coming from each party. Cassidy’s measure will serve as an amendment to the broader Gulf response package underway in the House; it matches the language approved by the Senate Energy and Natural Resources Committee last month. The Committee also accepted additional amendments to restrict new offshore leases:

DISPERSANT ANALYSIS: The US Environmental Protection Agency (EPA) is evaluating a draft bill that could boost testing on the long-term impacts of chemical dispersants on human and marine health, as well as require manufacturers to provide ingredient lists for their products. The House Transportation and Infrastructure Committee approved similar legislation earlier in July.

EPA Administrator Lisa Jackson has not formally endorsed the proposal, which Senator Frank Lautenberg (D-NJ) plans to introduce next week, thought she said it would provide “critical transparency and openness protections that right now EPA cannot provide by law."

According to Jackson, BP has applied more than 1.8 million gallons of dispersant into the Gulf since the Deepwater Horizon rig explosion in April. Lawmakers from both parties have expressed concern about the limited about of data currently available on the effects of the dispersants. In addition, dispersant ingredients are considered proprietary information, hindering efforts to model outcomes and gauge impacts. Under the 1976 Toxic Substances Control Act, chemical manufacturers may file confidentiality claims to resist the public release of ingredients in their products. A major dispersant manufacturer has since waived its claim, following a lengthy dispute, though other companies have yet to follow in suit.

Jackson appeared alongside Larry Robinson, a senior oceans official at the National Oceanic and Atmospheric Administration, at a hearing held by the Senate Appropriations subcommittee that controls the budgets for federal science agencies. The hearing was aimed at determining the appropriate level of research funding needed for dispersant testing. Current gaps in EPA analyses include tests of dispersant toxicity when mixed with crude oil, as well as the impacts of dispersant application at the high volumes witnessed in the Gulf.

FISH AND WILDLIFE SERVICE: POLLINATOR EXPERT PICKED AS LEAD SCIENCE ADVISOR

Gabriela Chavarria, a pollinator expert who most recently headed the Natural Resources Defense Council's science center, has been chosen as science advisor to the director of the Fish and Wildlife Service (FWS). The position is not a political post and is not subject to Senate confirmation.

Chavarria, who studied under the well-known ecologist EO Wilson at Harvard University, will be tasked with guiding agency efforts to consider climate change at the landscape level; integrating climate change into all agency activities; orchestrating efforts between FWS biologists, US Geological Survey scientists, and nongovernmental organizations; and helping FWS acquire and communicate sound science.

FWS efforts to address climate change will meet their share of challenges, particularly when it comes to species conservation. Conservation efforts have until now been based on historical data, but—as is the case with many management strategies in a rapidly changing climate—the past is no longer a good indicator of the present.

FWS is currently headed by Rowan Gould, who assumed the post of acting director after chief Sam Hamilton passed away in February. The Obama administration has yet to name a replacement.

OPPORTUNITY FOR INPUT: EPA SEEKS PUBLIC COMMENT ON EMISSIONS FROM BIOMASS COMBUSTION

The US Environmental Protection Agency (EPA) is requesting public comment on how climate regulations should treat greenhouse gas emissions from biomass combustion. EPA did not exempt biomass emissions from the greenhouse gas permitting rules finalized last May, resulting in sharp criticism from biomass industry representatives, who argued that biomass emissions are part of a natural carbon cycle of plant growth and decomposition. In other words, since combustion emits carbon dioxide that plants previously removed from the atmosphere, the process of growing and burning biomass does not increase greenhouse gas concentrations. Critics, meanwhile, countered that improperly harvested biomass can indeed release new carbon dioxide into the atmosphere and that it can decrease the planet’s capacity for reabsorption. They have called on EPA to establish an accounting system for measuring the effects of biomass on climate change.

For more information, see the May 21 edition of the ESA Policy News at: http://www.esa.org/pao/policyNews/pn2010/05212010.php

According to a statement last month, the agency is “committed to work with stakeholders to examine whether treating biomass-derived carbon emissions as carbon neutral is appropriate." EPA is receiving public comment through September 30, 2010.

To weigh in:

CURRENT POLICY

Passed in the House

Just introduced


Sources: ClimateWire, Environment and Energy Daily, Greenwire, Politico, the Washington Post, the New York Times

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

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