HOUSE ENERGY/CLIMATE BILL SHAPING UP

House Dems edge closer to consensus on climate and energy bill
Darren Samuelsohn, May 11, 2009 (NY Times)

SUMMARY
An energy and climate change bill is about to emerge from the Energy and Commerce Committee for debate by the full House.

Henry Waxman (D-Calif), Chairman of the Committee and co-author of the discussion draft legislation being hammered into a formal bill, has repeatedly promised he would bring the bill to the full House by Memorial Day and he seems poised to do so. The formal “mark-up” process is reportedly about to begin and points of agreement on controversial issues are emerging.

Doubt remains, however, about Chairman Waxman’s ability, in his first year as the Committee’s leader, to pull disparate elements of the majority Democratic alliance into line and marshall the votes necessary to bring his legislation to the House floor.

Representative Joe Barton (R-Tex), the Republican minority's Ranking Member on the Committee, leads the opposition to Waxman's legislation. Waxman's opponents have, at every step of the way, asserted that the bill's provisions would raise U.S. ratepayer electricity prices and compromise U.S. industry’s international competitiveness. Barton acknowledges Chairman Waxman may succeed in assembling the majority necessary to bring his bill to the House for a vote but says he presently counts the entirety of his 23 Republican minority members and about half of the 36 Democrats on the committee as oppossed to it.

About to becme more than discussion? (click to enlarge)

Procedurally, the bill would normally need to be approved by the Energy and Environment Subcommittee chaired by Ed Markey (D-Mass), the discussion draft's co-author, but Chairman Waxman may speed delivery to the House by taking it directly to his full committee of 59 members, despite Barton's vote count.

There are reportedly 4 areas of crucial contention: (1) Targets and timetables for greenhouse gas emissions (GhG) reductions, (2) allocation of the emissions allowances that will be the basis of the “trade” portion of the “cap&trade” system; (3) provision of offsets for energy intensive industries to facilitate compliance without compromising competitiveness; and (4) a national Renewable Electricity Standard (RES).

click to enlarge

Reportedly, a wide variety of Committee members are seeing progress. Committee members’ staff remained in Washington over the past weekend to further negotiations.

Insiders say the strategy of Democratic leaders, including Speaker of the House of Representatives Nancy Pelosi (D-Calif), is to win through to the full House, and use the Democratic majority there to give the legislation momentum going into the floor fight in the Senate, where opposition from recalcitrants makes getting a filibuster-defeating 60-vote supermajority a daunting challenge.

Any energy and climate change legislation must, of course, be approved by both houses of Congress before going to the President for his signature.

The reluctance of House Democrats, reportedly stemming from opposition by a handful of Democratic Senatorial recalcitrants, could destroy the strategy.

The bill also has a national energy efficiency standard. (click to enlarge)

COMMENTARY
Reported areas of agreement among the Democrats Waxman must bring together to get the legislation out of committee:

(1) A reduction of GhG emissions by ~83% from 2005 levels by 2050 and a reduction by ~14% by 2020. (Proposed 2020 targets had ranged from 6% to 20%.)
(2) Though the Obama administration and the original discussion draft had proposed allocating no free emissions allowances and auctioning 100% of them, the rumor is that the final bill will give away a significant portion to large emitters (steel, paper, cement, etc.) during the system’s 10-to-15-year initiation period. The ostensbile objectives of this potential compromise to effective emissions reductions are (a) to protect the competiveness of U.S. industry while emerging economies are brought into a broader international GhG reduction agreement, and (b) to allow for the maturation of carbon capture and sequestration (CCS) technology. (The real reason for the compromise is to assuage conservatives and bring them along.)
(3) Protection of large industrial emitters in the transitional stages of an emissions reduction regime seems to have won agreement from a majority of the committee. (Studies show few U.S. industries will actually need protection but the bill's proponents need the support of moderates and moderates need the political cover provided by this provision.)
(4) Democrats have not yet agreed on what percent of power a national RES should require U.S. utilities to obtain from New Energy sources (from 17.5% to 25%) by what specific year (2021-to-2025) although there is unanimity among a majority to provide long-term stability to the New Energy industries by setting a national standard. There is also agreement about allowing a portion of the required New Energy to come from efficiency measures.

While Chairman Waxman has so far insisted support is coming together for his bill and has dismissed opposition (coming largely from members who have not yet seen the compromise specifics), some Democrats have acknowledged obstruction from conservative Blue Dog Democrats and begun discussing a “grand bargain” that would add concessions to the oil and gas industry to the legislation in order to bring the Blue Dogs along.

The key to a deal? (click to enlarge)

Nick Rahall (D-W.Va.), Chairman of the House Natural Resources Committee and an influential Blue Dog, approves of the idea of bringing domestic oil and gas production into the discussion.

The White House has not committed itself except to “comprehensive” legislation.

Waxman said he is not opposed to considering concessions to the oil and gas industry but other members of the Energy and Commerce Committee suggest such a move would best be held back until later in the negotiating process.

The situation in the Senate. (click to enlarge)

QUOTES
- Chairman Waxman: "We're moving well, making a lot of progress on these issues…We're getting very, very close."
- Representative Mike Doyle (D-Pa): "All I can tell you is there's meetings taking place all day…The goal is to get somewhere."
- Representative G. K. Butterfield (D-NC): "Let's shoot for 14 percent [by 2020]…I can live with 14 percent."
- Representative Doyle: "Remember, this is an 80 percent reduction by 2050…This is 2009. We've got 41 years in this deal, and we shouldn't be so worried about the first 10 years. Because if we can't mitigate the economic impact of the first 10 years, we're not going to have a bill anyway. You're just not going to build public support for it and members of Congress to vote for it."
- Chairman Waxman: "We're not using allocations just because people would like some revenue…We're doing it for very legitimate purposes within the integrity of the bill."

From tpmtv via YouTube.

- Representative Peter Welch (D-Vt.): "The goal is to obviously to get a bill that puts us on a glidepath to significantly eliminate and reduce our emissions…So there's got to be a transition period in how best we do that. This is a negotiation. We have to get the votes."
- Representative and Ranking Member Barton: "They've got one more week to marshal their troops…And Henry and Ed and Speaker [Nancy] Pelosi can be pretty effective at marshaling their troops. So I don't discount the possibility, and I know how serious Henry is about doing a bill…[half the 36 Democrats on the committee will be] pretty hard to pull all that together in a week or so…There's growing pressure in the Democratic caucus to de-emphasize climate change and emphasize health care, where health care is a doable deal."
- Representative Doyle: "I'm sure Mr. Barton is going to make life interesting for us…But they have to sit there as long as we do. So, the key is for us to get an agreement. Once we have an agreement, it's just a matter of time. It's just waiting out the other side. When they get tired of having fun we all get to go home and we'll be done."

From climatebrad via YouTube.

- Carol Browner, White House energy and climate change advisor: "We want comprehensive legislation…Nothing's changed in that."\
- Chairman Rahall: "…[I]t's certainly my feeling that this is the time to explore those options of exploring oil and gas drilling under protection of certain sensitive areas…This is not as emotional as in the height of an election campaign…It's a pre-emptive strike, if you will, against the 'Drill Baby Drill' mantra that we heard so much last year. Now is the time. We've had extended hearings in my committee. We've got some good information and now is the time, in a calm, rationale manner, to develop a comprehensive energy package, and I'd certainly like to see it developed using all of our domestic resources."
- Chairman Waxman: "[Oil and gas is] not in our jurisdiction…But it's not inconsistent with what we're doing. I'd certainly want to look at the details of that."
- Representative Doyle: "Not going to happen between now and Memorial Day…This is the hand we're dealt. This is what we're doing. We're not focused on anything else. Now, if for some reason this doesn't happen, then I guess everything is back on the table. But right now that's not under consideration because this is what's going to happen."