House Passes Energy Bill Limiting Oil & Gas Incentives and Royalties On January 18, the House passed H.R. 6, a Democratic bill sponsored by Natural Resources Committee Chairman Nick Rahall (D-WV) that shifts billions of dollars in royalties and tax incentives from the oil and gas industry to alternative energy sources. House Republicans tried unsuccessfully to block passage of the bill, arguing they were cut out of debate and maintaining the legislation is bad economic policy and does nothing towards moving the nation to energy independence. The bill is the last of six initiatives on the leadership's early agenda for the 110th Congress.
The bill steers new revenues into alternative energy development through a new reserve fund, called the "Strategic Energy Efficiency and Renewables Reserve," and would raise an estimated $14 billion in new revenues, leadership aides said. It does not specifically say how the money in the reserve fund is to be spent, but says the money will offset the cost of subsequent legislation to speed up the use of renewable energy, alternative fuels, energy efficient products and conservation.
While Senate Democratic leadership has said it wants to move a similar bill, that effort will likely take a slower and more deliberate track given the slim Democratic majority.
Pelosi Makes Waves with New Committee; Markey Tapped as Possible Chair; Dingell Counterpunches
Last week, House Speaker Nancy Pelosi (D-CA) announced that she will create a select committee devoted exclusively to global warming within the next two weeks. The new Select Committee on Energy Independence and Global Warming will advise and make recommendations but will not have legislative authority. This was done primarily as a concession to several Democratic chairmen, like House Energy and Commerce Committee Chairman John Dingell (D-MI), who criticized the need for the committee and was worried about a "jurisdictional grab." In response, the Speaker has ordered the Committee Chairmen who have jurisdiction over some part of the global warming issue to produce legislation addressing the problem by June.
Rep. Ed Markey (D-MA), who has advocated raising mileage standards for cars, trucks and SUVs and is one of the House's biggest critics of oil companies and U.S. automakers, is a top candidate to lead the new select committee.
Anticipating Pelosi's plans, House Energy and Commerce Committee Chairman John Dingell (D-MI), said he will hold hearings and advance legislation on global warming. Dingell also released a memo outlining nine key areas he would investigate on global warming. The list includes a potential hearing with former Vice President Al Gore and sessions devoted to the causes and consequences, policy options and state, local and private efforts.
Ten Corporate CEO's Join Environmental Groups in Support of Mandatory Carbon Emission Reductions
On Monday, a diverse and politically powerful coalition of industry and environmental groups released a report and called for the adoption of mandatory caps on greenhouse gas (GHG) emissions and policies that "strongly discourage further construction of stationary sources that cannot easily capture CO2 emissions for geologic sequestration" (i.e. essentially ending construction of conventional coal-fired plants.) The group includes the Natural Resources Defense Council, Environmental Defense, Duke Energy, Public Service of New Mexico, General Electric, BP, Dupont, Wal-Mart, Bank of America, PG&E, Caterpillar, the Pew Center on Global Climate Change and World Resources Institute. The coalition, called the "U.S. Climate Action Partnership" announced its support for a reduction in GHG by 60 percent to 80 percent by 2050, 10 to 30 percent over the next 15 years and up to 10 percent in the next 50 years. Currently, there are approximately 150 coal plants in development in the U.S.
This evening, the President is expected to highlight his "global warming" policy in the State of the Union Address. He is expected to call for greater investments in carbon-control technology and the use of biofuels in transportation and electricity generation and to renew a request for the authority to mandate stricter Corporate Average Fuel Economy (CAFE) standards for passenger automobiles.
However, the Bush Administration has repeatedly reiterated its opposition to mandatory controls on emissions of carbon dioxide and other gases that scientists blame for trapping heat in the atmosphere and raising global temperatures.
The U.S. Climate Action Partnership plan endorses a "cap-and-trade" system similar to that in legislation (S. 280) sponsored by Sens. Joseph I. Lieberman (I-CT) and John McCain, (R-AZ). Under that model, companies unable to meet their emissions targets could purchase "allowances" from companies that beat their goals.
Olver-Gilchrest Introduce First Climate Bill in the House
On Monday, January 22, Reps. John Olver (D-MA) and Wayne Gilchrest (R-MD.), introduced the first global climate change bill in the House, which very similar to the Lieberman -McCain bill in the Senate. The House bill, titled the "Climate Stewardship Act" differs from the Senate version in that it calls for a more aggressive set of emission cuts by 2050 and it does not include a title aimed specifically at promoting new energy technologies.
There are 16 original cosponsors on the Olver-Gilchrest bill. They are: Reps. Christopher Shays (R-CN, Dennis Cardoza (D-CA), Michael Castle (R-DE), Elijah Cummings (D-MD), Diana DeGette (D-CO), Norm Dicks (D-WA), Phil Hare (D-IL), Jane Harman (D-CA), Maurice Hinchey (D-NY), Jay Inslee (D-WA), Mark Kirk (R-IL), Betty McCollum (D-MN), Jim Saxton (R-NJ),), Hilda Solis (D-CA), Mike Thompson (D-CA) and James Walsh (R-NY).
Earlier versions of the McCain-Lieberman legislation came to a vote on the Senate floor, though on both occasions lawmakers rejected the final bill. The 2003 vote was 43-55, while the 2005 vote was 38-60.
Chairman Bingaman, Energy Committee Democrats Support 15% Renewable Portfolio Standard (RPS) by 2020.
On January 22, Chairman Jeff Bingaman (D-NM) with the support of all Senate Energy Committee Democrats, unveiled a proposal that would mandate utilities generate 15 percent of their energy from renewable resources by 2020, a higher target than was approved by the Senate in 2005. During consideration of the Energy Policy Act of 2005, the Senate approved a 10 percent renewable portfolio standard (RPS) by 2020, but it was ultimately rejected in the final House-Senate Conference agreement.
Bingaman has been a key RPS advocate and in recent years had backed the 10 percent target. He told reporters yesterday, however, that a higher standard is now warranted. Bingaman said, "Over 20 states have renewable generation standards, with various targets and timelines" (including most of New England). Bingaman cited the proliferation of state renewable standards in calling for a federal RPS, pointing out that most state renewable power targets are more strenuous than the 15 percent target the Committee put forth. Since the legislative language has not been "officially" released it is unclear if the bill applies to municipal and cooperative utilities. Morgan Meguire will review the bill and report back to NEPPA on its applicability.
In the House, Rep. Tom Udall (D-NM) plans to introduce a federal RPS, similar to a bill he introduced in the 109th Congress creating a federal RPS of 20 percent by 2027.
Chairman Inouye, Commerce Committee Democrats Support 35 mpg CAFE Standards
On Janurary 22, Senate Commerce Committee Chairman Dan Inouye (D-HI), with the support of six Committee Democrats, announced a new bill that would increase corporate average fuel economy (CAFE) levels to 35 miles per gallon (mpg) by the 2019 model year. The legislation applies to both passenger cars and light trucks, and would direct the Transportation Department to set safety standards for the auto industry that would mitigate the difference in weight and size among different types of vehicles.
Currently, automakers must meet an overall average target of 27.5 mpg for an entire fleet of passenger cars. Last year, the Administration increased fuel-economy standards for light trucks and sport-utility vehicles based on the size, or "footprint," of different vehicle types. Now regulators are seeking similar authority for passenger cars, according to industry officials, an approach that carmakers prefer to fleet wide-average increases that are mandated by law.
According to Inouye, his bill, if enacted, would reduce greenhouse gas emissions by 18 percent by 2025 and cut oil use by 2.1 million barrels of oil per day by that same date.
Other sponsors of the Inouye CAFE standards bill include Commerce Committee members Olympia Snowe (R-ME), John Kerry (D-MA), Barbara Boxer (D-CA), Bill Nelson (D- FL), Maria Cantwell (D-WA) and Frank Lautenberg (D-NJ). Four other senators have also backed the bill are: Sens. Dianne Feinstein (D-CA), Joe Lieberman (I-CT), Robert Menendez (D-NJ) and Susan Collins (R-ME).
Although it remains unclear whether a CAFE increase has enough momentum to pass in the 110th Congress, after falling by wide margins in the past, the issue appears to have new legs as not only Democrats but several mostly moderate Republicans have recently come out in favor of an increase. Among them is Senate Commerce Committee Ranking Member Ted Stevens (R-AK), a close Inouye ally, who recently introduced a bill that would raise the CAFE standard to 40 mpg by 2017 model year.
However, Rep. John Dingell (D-MI), Chairman of the House Energy and Commerce Committee, is a major obstacle to passage as his district includes Detroit, the center of the U.S. auto industry, and has to date adamantly opposed any mandated increase.
Tidbits on New England Members
At a press conference held on Monday, Sen. Susan Collins (R-ME) joined Sens. John Warner (R-VA), Norm Coleman (R-MN) and Ben Nelson (D-NE) in outlining a bi-partisan resolution opposing troop increases, and instead calls on the president to consider all options and alternatives for achieving our strategic goals. It does not however do anything to limit existing funding for US forces.
Sen. Judd Gregg (R-NH) is leading the Republican effort to attach a line-item veto provision to the Senate's version of a House-passed bill (HR 2) to increase the minimum wage to $7.25 over two years. A Senate vote is scheduled Wednesday but a showdown is expected, as Republicans will highlight the fact that Democrats supported such an effort during the Clinton Administration. If the Senate approves the measure, which is expected, a House-Senate Conference Committee will be appointed to reconcile differences.
Sen. Edward Kennedy (D-MA) announced that as soon as Congress approves a minimum wage increase he will immediately advance an effort to increase it further, between $8 and $9 an hour. The last time there has been an increase in the minimum wage was 12 years ago.