May 6, 2009
Moderate House Democrats Lay Out Concerns With Draft Climate Bill

House Democrats pushing a major energy and global warming bill have work to do before winning over some fellow party members.

Several Democrats from industrial and Southern states used the first Energy and Commerce Committee hearing on the draft bill yesterday to offer their most substantive take yet on issues including renewable electricity standards and emissions allowances.

The views of moderates such as former Chairman John Dingell of Michigan, Jim Matheson of Utah and Gene Green of Texas are key heading into planned markups. Democrats hold a 36-23 advantage over Republicans on the full Energy and Commerce Committee, meaning Chairman Henry Waxman (D-Calif.) can lose only six of his own members and still pass the bill absent any surprise GOP defections.

Markey yesterday said the sponsors are committed to engaging with committee members but steered clear of specifics or possible changes in the offing. "We are going to be working with all the members over the next couple of weeks to have those conversations so we can find the smartest way to move forward," Markey said.

On the Energy and Environment Subcommittee, chaired by bill co-sponsor Rep. Ed Markey (D-Mass.), Democrats outnumber Republicans 21-13.

Dingell wants auto industry aid; Green wants refiner protection.

Dingell, who Waxman toppled in a fight for the chairmanship last year, pronounced himself impressed with the Waxman-Markey draft and praised their outreach.

But Dingell, a key ally of Detroit automakers, also wants changes. He said the bill should double the current authorization for an Energy Department loan program, established by Section 136 of the 2007 energy bill, that provides loans to automakers and suppliers to retool in order to make advanced efficient vehicles.

He also called for a dedicated funding source for the program and the industry's retooling to meet higher fuel economy standards, suggesting that 1 percent of the emissions allowance values be steered for these programs.

The Waxman-Markey draft already calls on DOE to create a new financial assistance program for automakers to spur production of plug-in electric vehicles.

In addition, Dingell lobbied for a "cash for clunkers" program in the bill. Cash for clunkers, an idea supported by President Obama, would provide cash rebates to Americans who scrap an older car or truck and replace it with a newer, more fuel-efficient one. "Any compromise must favor automobiles built in the United States," Dingell said.

Green, who has several refineries in his Houston-area district, said he wanted to include protections for the refining sector, warning the cap-and-trade program could drive refining capacity outside the United States.

His solution is to ensure refineries are on the bill's list of energy-intensive industries considered vulnerable to migrating to countries without carbon controls.

These so-called trade-exposed industries -- such as cement and steel manufacturing -- are eligible for free emissions allowances under the bill to help maintain competitiveness. "If refineries are not considered with steel and aluminum and chemicals, that could devastate refining capacity in our country," Green told reporters.

Several Southeastern Democrats, such as Rep. Mike Ross of Arkansas, voiced concerns that their regions lack enough wind and solar power to meet the bill's renewable electricity targets.

House Science and Technology Chairman Bart Gordon (D-Tenn.) said he wanted to see changes in the bill's renewable electricity standard. It requires utilities to obtain escalating amounts of power from renewable sources, reaching as much as 25 percent by 2025.

Gordon provided several ideas, including allowing nuclear power and coal with carbon capture and sequestration to count toward the standard, and lowering the standard's "alternative compliance" payments for utilities who do not meet the targets.

Looking to the future, Gordon suggested giving the Energy Department's secretary the authority to add future technologies to the list. "If we are going to get from here to there we can't do it on today's technology. There could be different types of renewable power in the future that we need to recognize in that regard," he said.

Waxman, like Markey, vowed to work with committee members on the package. "We are going to have to talk to the members and think through together different details of the bill," he told reporters. Asked whether he was open to changes in the renewable power standard, he was noncommittal. "We will see," he said.

Matheson, who chairs the energy task force of the conservative Blue Dog Democrats, also listed more than a dozen concerns. Matheson wondered whether, under a market-based, cap-and-trade system, if additional programs such as the renewables standard are needed. He questioned whether the bill should allow Congress to "dictate" how emissions reductions will be achieved.

"We ought to have a discussion in the committee about if and when that is appropriate," he said, while also arguing that the bill does too little to address the need for new transmission lines. Matheson also said emitting industries should be allowed to use offsets on a 1-to-1 ratio.

Under the current draft, emitters who want to use offsets to help meet their greenhouse gas cuts must obtain 5 tons worth of offset credits to replace 4 tons worth of their emissions reductions.

Questions about pace

The bill would create a market-based system to reduce U.S. greenhouse gas emissions 20 percent below 2005 levels in 2020 and 83 percent in 2050. It includes a wide range of provisions on energy efficiency, renewable energy, adaptation to climate change, deployment of carbon sequestration and other provisions.

Yesterday's session was the first of four days of hearings on the bill this week, but with the subcommittee markup scheduled for next week, some lawmakers questioned Waxman and Markey's timetable.

"I would just suggest we're having legislative hearings right away this week where people can learn about the bill, and to already roll into a markup next week sounds pretty quick," Matheson said.

Meanwhile, all 23 committee Republicans asked Waxman and Markey to schedule more hearings on the bill. The Democrats rejected the request, noting extensive information gathering on climate issues already, including more than a dozen sessions already convened this year, as well as plans to hear from more than 50 witnesses on their bill before Friday.

GOP committee members blasted the climate and energy bill, saying it lacked detail and also would pose undue costs on Americans' energy bills. "I don't think you'll see any Republicans go along with a cap-and-trade scheme," said Rep. Fred Upton (R-Mich.), the ranking member of the Energy and Environment Subcommittee. "We'll see where things go. I don't think the votes are there, period."

In addition, key details remain unanswered in the energy and climate bill, including what to do about the distribution of hundreds of millions of dollars worth of emission allowances.

Asked if he would have allocation language completed before the markup begins, Waxman replied, "Probably, but I am not sure," and added "the subcommittee markup could take as long as two weeks, so we have through that period of time."

"It's a long ways to go," added Rep. Jay Inslee (D-Wash.), an outspoken advocate for cap-and-trade legislation. "A lot of edges to sand down. But there's a lot of room here. A lot of these things aren't yes or no questions. They're not ideological. There's maneuvering room for all of us."

But some Democrats want details before the voting begins.

"I think you've got to say what we're doing with the allowance program," Matheson said. "That's the biggest hole in the draft right now. All the questions, all the statements about what the costs will be to consumers, until you identify how an allowance system is set up, and how revenues are going to be distributed, those discussions don't have any meaning."

Dingell noted the as-yet-unanswered questions about how to address emissions auctions and allocations will be a vital issue. "That is a very serious question, some might say a deal breaker for many members," he said.

Some of those missing details may have something to do with jurisdiction. House Ways and Means Chairman Charles Rangel (D-N.Y.) said he would continue holding hearings on global warming and would produce legislation on the allocation issue in time for the Memorial Day recess.

"I don't really see how there could be any other way," Rangel told reporters. "But I'm not saying I'm locked into anything. If someone can provide a more efficient way to guarantee that this burden is not going to be hit on the consumer, then it's not the jurisdiction that's the question. I just can't perceive of what vehicle that is out there, to do that."

Other Democrats on the Energy and Commerce Committee said they were ready to begin the markup process -- just as long as their concerns are addressed. "It's not too soon to get started," said Rep. John Barrow of Georgia. "It may be too soon to finish, but it's not too soon to start."

"I think we are going to do it," added Rep. Charles Gonzalez of Texas. "Because we can agonize over this forever. And there is a point, as I've always said, paralysis by analysis. And I don't want to reach that point. I just want to make sure the central questions are answered upon which we can build some policy that's flexible as circumstances reveal themselves that maybe we didn't anticipate."

Source: The New York Times, April 22, 2009

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