PRESENTING THE SENATE ENERGY/CLIMATE BILL - AND ANOTHER POLITICAL DONNYBROOK

Utilities Divided as Exelon Quits Chamber Over Climate Change
Joe Walsh, September 29, 2009 (Red, Green and Blue via Reuters)
and
Boxer, Kerry Set to Introduce Climate Bill in Senate
Darren Samuelsohn (W/Allison Winter and Katherine Ling), September 28, 2009 (NY Times)
and
Green groups open 'climate war room'
Mike Allen and Jim Vandehei (w/Kendra Marr), September 21, 2009 (Politico)
and
Vital signs weak for climate bill
Lisa Lerer, September 17, 2009 (Politico)

SUMMARY
Today’s release by Senators Boxer and Kerry of the Senate’s energy and climate legislation could heat up debate on a political question hotter than any other domestic issue except health insurance reform.

Just this week, Exelon became the 3rd major utility to resign its membership in the U.S. Chamber of Commerce, following Pacific Gas & Electric and PNM Resources, because of the Chamber’s opposition to climate and energy legislation.

The Chamber’s opposition is primarily to the legislation’s first-ever national mandatory cap&trade system to cut U.S. greenhouse gas emissions (GhGs). The House version of the legislation cuts GhGs 17% below 2005 levels by 2020 and the Senate version, due to be released today by authors Senator Barbara Boxer (D-CA) and Senator John Kerry (D-MA), is rumored to up that reduction to 20% by 2020.

The Boxer-Kerry Clean Energy Jobs and American Power Act, like the prototype House bill, reportedly has generous provisions allowing utilities to transition over the next decade to stringent GhG caps. Given abundant marketable allowances to emit in the early years of the process, the utilities will be able to defray rising costs instead of passing them along to consumers. On the other hand, some of the Chamber’s business participants, like oil and gas companies and refiners, will likely face rapidly rising costs for the emissions they spew, giving them a disincentive to do so.

Despite the utilities’ stand for cap&trade and against the Chamber’s Old Energy-centric opposition to the legislation, insiders are more and more inclined to believe the fight over health insurance reform will make it impossible to deal with energy and climate legislation this year.

To generate momentum and at the same time respond to opponents' spuriously untrue claims about the legislation's potential costs, New Energy advocates have created the Carbon War Room and are organizing to fight for the bill and to discredit outdated studies of already rewritten cap&trade proposals being used to scare moderate proponents. War Room polling shows voters are not buying Big Business lies and may be willing to stick with cap&trade as the best available means to fight global climate change.

While the Treasury Department study on cap&trade has been discredited as inapplicable, studies by the EIA...(click to enlarge)
...and the CBO...(click to enlarge)
...and the EPA show the cost burden of cap&trade will be modest. (click to enlarge)

COMMENTARY
The hottest places in hell, John F. Kennedy quoted Dante’s Divine Comedy, are reserved for those who remain neutral when it is time to act.

Anybody who believes the global climate can tolerate any more inaction is dooming the entire earth’s population to a hellishly hot future.

The U.S. Chamber of Commerce, representing big businesses that will lose and big businesses that will profit from putting a price on GhGs, has tried to remain obstructively neutral on the issue. It finds itself in hot water.


From the Carbon War Room

The Edison Electric Institute, a utilities association, has also remained neutral as its members navigate the tempestuous waters between utilities that are ready to face the inevitability of a transition to a carbon-constrained world and those from more conservative regions who believe the Senate’s 60-vote barrier will not be breached by cap&trade after the brutality of the health insurance reform fight, especially with 1993’s BTU Tax loss in memory and the 2010 midterm elections in sight.

With no more than 45 of the necessary 60 Senate votes now certain, Senate Majority Leader Harry Reid (D-NV) hinted to Washington reporters he might be ready to put the energy and climate bill fight off until next year.

That will not dissuade Senator Barbara Boxer (D-CA), Chair of the Environment & Public Works Committee, and Senator John Kerry (D-MA), Chair of the Foreign Relations Committee, from introducing their version of the legislation.


From the Carbon War Room

Insiders say it is, except for the slightly stronger GhG-reduction target, very similar to the House-passed Waxman-Markey energy and climate legislation which contains:
(1) the first-ever national Renewable Electricity Standard (RES) requiring regulated U.S. utilities to obtain 15% of their power from New Energy sources by 2020,
(2) billions in subsidies, incentives and loan guarantees for New Energy, Energy Efficiency, new high voltage smart transmission, alternative fuel vehicles, “clean” coal and new nuclear research, development & demonstration, and
(3) the first-ever mandated national cap&trade system aimed at cutting GhGs along with an emissions-trading market to facilitate the buying and selling of allowances that would be the key to the GhG reductions.

It appears the cap&trade provision is the sticking point. Because of mischaracterizations by Republican opponents about costs to ratepayers as well as more legitimate concerns about costs to emissions-intensive industries, cap&trade creates a conflict for Democratic moderates. Many expect the conflict to result in the same kind of frenzied, rabble-rousing debate seen over health insurance reform.

Except that the complexities of cap&trade will make the health insurance reform rhetoric seem like Sesame Street.


From the Carbon War Room

Anticipating the controversy, both Senators Kerry and Boxer have described their legislation as a starting point for debate. in response to Republicans dubbing cap&trade “cap-and-tax,” Kerry has begun urging the press and his Senate colleagues to call cap&trade by another name, “a pollution reduction and investment program.”

Another option is to abonadon cap&trade entirely. Senator Jeff Bingaman (D-NM), Chair of the Energy and Natural Resources Committee, has already passed out of committee S. 1462, the American Clean Energy Leadership Act of 2009, the bill similar to Waxman-Markey and Boxer-Kerry except that it does not have cap&trade and does have more provisions for oil and gas development.


From the Carbon War Room

Democratic moderates see Bingaman’s bill as a viable alternative. It is unlikely that House Democratic leaders, who would have to forego provisions they have already passed and signed on, also see it as viable.

A 3rd option is to form a Carbon War Room and organize for a grassroots fight on behalf of cap&trade. That’s what members of New Energy advocacy groups like the Environmental Defense Fund and Al Gore’s Alliance for Climate Progress are doing.

They’ve secured funding from 60+ labor, business, faith, agriculture and environmental groups, are seeking the support of military veterans and briefing anybody and everybody in Congress they can get to. They are stressing the legislation’s New Energy, Energy Efficiency, economic and climate change benefits as well as the results of an important new poll.


From the Carbon War Room

Garin-Hart-Yang Research Group polled the “swing vote” districts of moderate Democratic Congressional Representatives Heath Shuler (North Carolina), Thomas Perriello (Virginia) and Baron Hill (Indiana) and found “the conventional wisdom is wrong.”

Voters want action on climate change and respect members who stand up for it.

Whether that will change when the Republican opposition gets done with health insurance reform and goes to work wreaking havoc with truth, justice and cap&trade remains to be seen.


From the Carbon War Room

War room organizers intend to have a grassroots organization in place by the time the political donnybrook kicks off. Repower America, another Gore group, has generated 250,000 letters to the House and 50,000 to the Senate. During the summer, it did 50 Made in America Jobs Tour events in 22 states.

The hope is to get legislation passed in time for Obama administration climate change negotiators to go to the international summit in Copenhagen in December with a Renewable Electricity Standard (RES) and a solid emissions-reduction program (cap&trade) in place.

War room leaders like Maggie Fox, the CEO of the Alliance for Climate Protection, know that the timing depends on how and when the administration decides to carry the political fight forward. But grassroots organizers stress that if voters don’t turn up the heat on Congress to get something done about climate change, climate change will turn up the heat on everybody.

New Energy/Climate Change is not a political 3rd rail. Voters want and respect action. (click to enlarge)

Reading the tea leaves:
(1) Representative Ed Markey (D-MA), co-author the successful House bill, remains optimistic. He reminded the NY Times his bill’s chances did not look good in the early stages.
(2) Representative Henry Waxman (D-CA), the House bill’s other author, told NewEnergyNews in August he was optimistic and dismissed the vocal opposition.
(3) Senator Bingaman has once again cancelled Committee hearings to air the mistruths being spewed by Republicans about cap&trade costs because he and the rest of the Senate are too busy with health insurance reform.
(4) An unnamed “senior Congressional Democrat” told Politico he didn’t think the leadership would follow the controversial vote on health insurance reform by having members “walk the plank” again on energy and climate legislation.

Next in the Senate: 5 more Senate Committees will weigh in after Boxer’s Environment & Public Works Committee moves the bill. Foreign Relations and Agriculture are preparing alternative language. The Commerce Chair, Senator Jay Rockefeller (D-WV), says he will hold votes on relevant parts, as will the Finance Chair, Senator Max Baucus (D-MT).

New Energy/Climate Change is not a political 3rd rail. Voters want and respect action. (click to enlarge)

QUOTES
- David Chavern, Chief Operating Officer, U.S. Chamber of Commerce: "Congress should do everything it can to promote and incentivize technology development and other policies that allow us to control carbon in ways that don't trash the economy."
- Senate Majority Leader Harry Reid (D-NV): “We are going to have a busy, busy time the rest of this year…And, of course, nothing terminates at the end of this year. We still have next year to complete things if we have to.”
- Senator Tom Harkin (D-IA): “I’d like to see climate change done before December so we can go to Copenhagen with something in our hands…We might be able to get to it in November.”
- Letter from 10 moderate Democrats to President Obama: “It is essential that any clean energy legislation not only address the crisis of climate change but include strong provisions to ensure the strength and viability of domestic manufacturing…”
- Senator Lamar Alexander (R-TN), citing a discredited Treasury Department report on a cap&trade system no longer part of pending legislation: “American families can’t afford a new $1,761 yearly energy tax, and our economy surely cannot afford the 1 percent drop in productivity this Big Government bill would cause…”

New Energy/Climate Change is not a political 3rd rail. Voters want and respect action. (click to enlarge)

- Steve Cochran, director of the National Climate Campaign, Environmental Defense Fund: “When you get your butt kicked, like we did [after the House energy vote], it focuses the mind…We found out that this is not something to hide from but something to lean on — even in places where coal is king and Blue Dogs were perceived to be running for cover.”
- Senator Kerry: "I don't know what 'cap and trade' means. I don't think the average American does…This is not a cap-and-trade bill, it's a pollution reduction bill"
- James Inhofe (R-OK), Ranking Member, Environment & Public Works Committee: "No matter the semantic games employed, or the extent to which Democrats wish to hide the truth from the American people, cap and trade will mean more job losses, more pain at the pump, and higher food and electricity prices for consumers…"
- Representative Ed Markey (D-MA), co-author of the successful House energy and climate bill containing a cap&trade provision: "At this stage in the House no one was predicting we could be successful…[the Senate will come around] once people sit down and begin to understand we have dealt with the major interests in the country."
- Allan Rivlin, partner, Garin-Hart-Yang Research Group: “Rather than a tough vote, this is actually helping members in some tough districts that [John] McCain carried…Senators can look at these results and find that voting for a climate change bill is not as politically risky as the opposition would like to make it seem.”
- Tony Kreindler, national media director for climate, Environmental Defense Fund: “[In] the hardest districts you can think of to test in…In every case, the members came out in a very strong place politically…The hard data say that even after two years of well-funded opposition campaigns, constituents aren’t buying what the opposition is selling…We’re not in any way pushing to go before health care, or ram through the process…We’re building toward a successful vote and working with the obvious reality that nothing will go before health care.”
- RepresentativeThomas Perriello (D-VA): “Even people who don’t agree with me on policy recognize I work tons of hours every day to get these things fixed…People realize the problem of energy dependence and that both parties have yapped on without doing anything about it. They appreciate people stepping up.”