Government Affairs Updates - 01/22/2007

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• House Energy & Commerce Committee to examine Climate Change, Possible Gore Appearance
• EIA Analysis: Emission Caps Will Have Only Modest Economic Impact
• Senate Energy Policy Likely Spread Over Multiple Bills
• Gordon Introduces Legislation to Keep America Competitive
• Greenhouse Gas Emissions/Climate Change Bills Introduced
• House Speaker Creates Climate Change Task Force
• Energy Portion of 100-Hours Agenda Passes House

House Energy & Commerce Committee to examine Climate Change, Possible Gore Appearance

Rep. John Dingell (D-Mich.), chairman of the House Energy and Commerce Committee, outlined his environmental agenda in a memo sent to committee members. Hearings and potential policy changes relative to climate change topped the list of actions.

According to the memo, "One issue that we must address stands out: climate change, it is critically important that members of the committee gain a full appreciation of the scientific and substantive implications of climate change policy so that we can develop and, if at all possible, enact a sound and effective public policy that is environmentally and economically responsible."

Dingell and the chair of the Energy and Air Quality Subcommittee, Rep. Rick Boucher (D-Va.), have invited former Vice President Al Gore to testify at the initial hearing. Gore's 2006 documentary film "An Inconvenient Truth" has helped to put global warming before mainstream audiences in the United States and around the world.

 Dingell Memo

EIA Analysis: Emission Caps Will Have Only Modest Economic Impact

Senate Energy and Natural Resources Committee Chairman Jeff Bingaman (D-N.M.) and other lawmakers requested an analysis by the Energy Information Administration (EIA) on the impact draft cap-and-trade legislation would have on the economy. Among EIA's key findings are that in the early years of the program, when allowance prices are relatively low, reductions in greenhouse gas emissions outside of the energy sector would the predominant source of emissions reductions.

By 2020, emissions reductions other than energy-related CO2, would account for almost 66 percent of total reductions. By 2030, however, the higher allowance prices would lead to a significant shift in energy decisions, particularly in the energy sector, according to the analysis. By then, the reduction in energy-related CO2 would account for almost 58 percent of total greenhouse gas emissions reductions.

Electricity prices in 2020 would be 3.6 to 5.6 percent higher than in the reference case in the phased and full auction cases, respectively. In 2030, electricity prices would be 11 and 13 percent, respectively, above the reference case level. EIA estimated that, relative to the reference case, annual per household energy expenditures in 2020 would be 2.6 percent (about $41) higher in the planned auction case and 3.6 percent higher ($58) in the full auction case. A decade later, projected annual per household energy expenditures would range from 7 percent to 8.1 percent higher in the two cases, a range of about $118 to $136, according to the analysis.

The legislation would raise the cost of burning coal and provide an incentive to lower energy use and shift away from fossil fuels, particularly in the electric power sector. The bill would require suppliers of fossil fuel and other regulated sources of greenhouse cases to submit allowances based on their emissions. Among gases covered in the analysis: energy-related carbon dioxide, methane from coal mining, nitrous oxide from the production of nitric and adipic acids and hydrofluorocarbons.

The legislation would establish annual emissions caps based on targeted reductions in greenhouse gas intensity—emissions per dollar of gross domestic product. The targeted reduction of greenhouse gas intensity would be 2.6 percent annually between 2012 and 2021, then increase to 3 percent per year beginning in 2022.

Ninety percent of the allowances would be allocated for free to affected groups, but the portion of allowances to be auctioned would grow from 10 percent in 2012 to 38 percent in 2030. To limit the program's cost, it includes a "safety valve" provision that would allow regulated entities to pay a pre-established emissions fee in lieu of submitting an allowance.

Bingaman added he plans to hold a committee hearing on the analysis and pass bipartisan emissions-capping legislation this year. The other senators who requested the analysis were Sen. Arlen Specter (R-Pa.), Mary Landrieu (D-La.), Lisa Murkowski (R-Alaska), Ken Salazar (D-Colo.) and Richard Luger (R-Ind.).

 EIA Analysis

Senate Energy Policy Likely Spread Over Multiple Bills

Several Senators including Jeff Bingaman (D-N.M), chair of the Senate Energy and Natural Resources Committee, and Maria Cantwell (D-Wash) have indicated that future energy policy in the Senate likely will be spread over several bills rather than a single broad energy package.

"I would predict that instead of seeing just one big energy bill, we will be addressing these issues through multiple bills that move through the Senate as issues and proposals for addressing these issues become ripe for action," Bingaman said in a floor speech in support of a broad legislative "marker" on climate and energy introduced by the Senate Democratic leadership (S.6).

The National Energy and Environmental Security Act of 2007 calls for: reducing greenhouse gas emissions; expanding use of environmentally friendly energy supplies and technologies; reducing the burden of high prices for consumers; eliminating tax giveaways to large energy companies; and preventing price gouging, profiteering and market manipulation.

Jurisdiction on climate change lies primarily with the Environment & Public Works Committee, but energy plays a key role in the contribution of greenhouse gas emissions. "Over 95 percent of U.S. carbon monoxide emissions and the greenhouse gas emissions come from energy production, distribution and use. We want to work with other committees to find the best way to deal with this important issue," he said. Bingaman also said energy efficiency has not been given enough attention in Congress. "This is going to be a major focus of our work in the first few months," he said.

Gordon Introduces Legislation to Keep America Competitive

Citing his desire to keep America competitive in today’s global marketplace, House Science and Technology Committee Chair Bart Gordon introduced legislation to improve math and science education and reduce the nation’s dependence on foreign oil.

“I don’t want today’s children to grow up and have a standard of living lower than their parents,” said Gordon. “But unless we put a focus on improving math and science education, we’re not going to be able to compete with the rest of the world.

Gordon re-introduced several pieces of legislation he authored in the 109th Congress and vowed to make these bills among the first the committee considers in the 110th Congress.

The first of Gordon’s bills, the “10,000 Teachers, 10 Million Minds” Science and Math Scholarship Act, will increase the number of U.S. math and science teachers by 10,000 annually by providing scholarships to science, math and engineering students who commit to becoming science or math teachers at elementary and secondary schools upon completion of their degrees.

The second bill, the Sowing the Seeds Through Science and Engineering Research Act, authorizes a 10 percent funding increase per year for basic research in the physical sciences at key federal agencies, administers awards to outstanding early-career researchers in academia and in nonprofit research organizations, provides graduate research assistantships in areas of national need, and establishes a national coordination office to prioritize university and national research infrastructure needs.

Versions of both bills were approved by the Science Committee last year.

Gordon’s third bill in the innovation package is the Advanced Research Projects Agency-Energy (ARPA-E) Act. Charged with the mission of decreasing U.S. dependence on oil through clean energy technologies, ARPA-E will provide aggressive funding for innovative, out-of-the-box research projects carried out by industry, universities and consortia of groups, including federal laboratories. This program will give the best and brightest science and technology experts unprecedented flexibility and resources to develop new technologies through high-risk, high-return research addressing the nation's most pressing energy problems.

Greenhouse Gas Emissions/Climate Change Bills Introduced

The plans—led by Sens. Joe Lieberman (I-Conn.), Bernie Sanders (I-Vt.) and Dianne Feinstein (D-Calif.)—differ in their stringency and core design, including what sectors of the economy to regulate. Sen. Jeff Bingaman (D-N.M.), chairman of the Energy & Natural Resources Committee, also has drafted legislation to cap emissions at a less aggressive pace than the other three bills.

Sen. Bernie Sanders (I-Vt.) and chairwoman of the Environment and Public Works Committee, Barbara Boxer (D-Calif.) along with other Democrats introduced the "Global Warming Pollution Reduction Act." The legislation is designed to cut heat-trapping greenhouse gas emissions by 80 percent over the next half century. Cosponsors include Sens. Daniel Akaka (D-Hawaii), Russell Feingold (D-Wis.), Daniel Inouye (D-Hawaii), Edward Kennedy (D-Mass.), Frank Lautenberg (D-N.J.), Patrick Leahy (D-Vt.), Robert Menendez (D-N.J.), Jack Reed (D-R.I.) and Sheldon Whitehouse (D-R.I.).

The Sanders-Boxer measure covers nearly all sectors of the economy, including new and old power plants, automobiles, motor fuels and other major carbon-producing industries. It sets a national goal aimed at stabilizing overall carbon dioxide levels in the atmosphere. To get there, U.S. carbon dioxide emissions would be capped at 1990 levels by 2020 and then tightened every decade until 2050.

While a cap-and-trade program would not be required, EPA could establish one to meet established targets. EPA also could require additional pollution cuts if global atmospheric concentrations go above 450 parts per million, a threshold that some scientists say would lead to warming of 2 degrees Celsius above pre-industrial average temperatures.

The bill has the support of more than a dozen national environmental groups, including Greenpeace, the League of Conservation Voters, National Audubon Society, Natural Resources Defense Council, Sierra Club and U.S. PIRG. Boxer called the effort the "gold standard bill" and plans to hold the first in a series of global warming hearings on Jan. 30.

Sens. Joe Lieberman (I-Conn.) and John McCain (R-Ariz.) also introduced legislation calling for mandatory reductions in greenhouse gas emissions across multiple sectors of the U.S. economy.

The new Lieberman-McCain bill sets stricter pollution requirements and deadlines compared with earlier versions of the bill. Some environmental groups say the legislation does not go far enough to cut the pollution linked to global warming.

Sens. Barack Obama (D-Ill.), Susan Collins (R-Maine), Blanche Lincoln (D-Ark.) and Olympia Snowe (R-Maine) are cosponsors on the legislation. In an apparent about face, Lincoln twice voted against less aggressive versions of the same legislation.

In the House, Reps. John Olver (D-Mass.) and Wayne Gilchrest (R-Md.) are expected to introduce a nearly identical version of the Lieberman-McCain bill. Nearly a dozen other climate change related bills are expected to be introduced in both chambers in the coming weeks.

House Speaker Creates Climate Change Task Force

House Speaker Nancy Pelosi will create a Select Committee on Energy Independence and Global Warming to examine global warming issues, but the panel will not have legislative authority. The Speaker’s decision to create a task force without bill-drafting powers followed days of pushback by some Democratic committee chairmen who feared her plan would encroach on their panels’ powers.

The panel will draw on members from as many as nine existing panels that already have authority over the issue. Rep. Ed Markey is expected to lead the new committee, which will only be commissioned for the 110th Congress. The Speaker also has ordered the chairmen whose panels have jurisdiction over some part of the global warming issue to produce legislation addressing the problem by June.

Lacking the authority of regular standing committees to approve the package, the new committee will only advise and make recommendations. Since it will have staff and a budget, the House will have to pass a resolution to create it, according to the rules.

Among those opposed to creating a new panel is Rep. John Dingell, who heads the Energy and Commerce Committee. Dingell, dean of House Democrats, has consistently fought efforts to tighten the Clean Air Act in ways that could hurt the domestic auto industry.

Energy Portion of 100-Hours Agenda Passes House

The House of Representatives overwhelmingly (264-163) passed H.R.6, the Creating Long-term Energy Alternatives for the Nation (CLEAN) Act of 2007. The bill repeals several oil industry production incentives and creates a new "strategic energy efficiency and renewables reserve" that directs an estimated $14 billion into alternative energy and energy efficiency programs.

The legislation would make oil and gas companies ineligible for deductions on manufacturing income that were included in the 2004 corporate tax bill. Elimination of those deductions is projected to raise more than $7 billion over 10 years. The bill also pressures Gulf of Mexico producers to renegotiate flawed 1998 and 1999 deepwater leases or face bans from bidding on future lease sales. It also allows the Interior Department to waive royalties for offshore Alaska production.

Last, the bill would roll back tax breaks for certain oil exploration costs for major integrated oil companies, repealing several new royalty incentives that were part of the Energy Policy Act of 2005.

The Reserve Fund is in response to a new House requirement that prohibits the consideration of legislation that would increase the deficit. All new funding initiatives, including those for energy efficiency and renewable energy, would be subject to the pay-as-you-go limitations. Thus, absent any other means, the Reserve Fund would be used to support any new energy efficiency and renewable energy initiatives that would require additional appropriations.