July 02 2009

On June 26, the House voted 219-212 in favor of the Waxman-Markey climate and energy package. The bill’s success came after significant negations between Energy and Commerce Chairman Henry Waxman (D-CA) and Agriculture Committee Chairman Colin Peterson (D-MN). Peterson had previously vowed to vote against the measure, threatening to bring up to 50 farm state lawmakers with him, if his concerns were not addressed. For more information, see the June 5 edition of the ESA Policy News at www.esa.org/pao/policyNews/pn2009/06052009.php

In exchange for his support, Peterson was allowed to add an amendment to the existing package. The amendment made several notable changes to the legislation, including language to:

• Place the US Department of Agriculture (USDA)—rather than the Environmental Protection Agency (EPA)— in charge of the offset program that provides incentive for farmers and other landowners to conduct environmentally friendly projects.
• Place a moratorium of at least six years on any EPA regulations that would include “indirect” greenhouse gas emissions when calculating biofuels’ carbon footprint. These indirect emissions—emissions that result from changes in land-use driven by the production of biofuels—could only be included if USDA and EPA, following additional research by the National Academy of Sciences, concluded that the emissions could be accurately measured.
• Expand the definition of “renewable biomass” acceptable under the bill’s Renewable Fuels Standard (RFS) so that it mirrors the specifications in the 2008 farm bill. The Waxman-Markey bill banned the use of materials from “old growth or mature forest stands”; the Peterson amendment will remove the language protecting mature forest stands, replacing it with “late successional forest stands.” Much of the original language remains intact, however, including restrictions on using biomass—including slash and thinnings—from federal forests and lands.

Peterson’s support was critical in reaching the 218 votes the bill needed to pass. In total, 211 Democrats and 8 Republicans voted to adopt the measure, which would:

• Use a cap-and-trade program to achieve a 17 percent reduction in greenhouse gas emissions by 2020 and an 83 percent reduction by 2050.
• Mandate that 20 percent of electricity come from renewable sources by 2020.
• Provide vulnerable parties with special protections during the transition to a low-emissions economy.

For details on the original bill, see the April 2 edition of the ESA Policy News at: www.esa.org/pao/policyNews/pn2009/04022009.php

Information about earlier amendments is available at: www.esa.org/pao/policyNews/pn2009/05222009.php

Opponents argued that the legislation would impede economic recovery, suggesting that by 2020 household energy costs increase by as much as $3000 per year. A recent report from the Congressional Budget Office predicted more moderate impacts, however, estimating an average increase of $175.

During his weekly radio and internet address, President Obama urged the Senate to act quickly on climate legislation, emphasizing the ways that a new US climate and energy policy would benefit national security and the economy. Obama praised the House-passed bill, but did express concerns about one of its provisions that would place trade sanctions on countries that did not accept greenhouse gas limits. “I think there may be other ways of doing it than with a tariff approach,” he said. The Obama administration played a major role in the final days of the House debate, and is expected to be even more involved with the Senate, where both President Obama and Vice President Biden served before assuming their current roles. But with party loyalties taking a backseat to regional priorities, it remains uncertain where and to what degree the president and his team will influence the debate.

The Senate will begin work on its version of the legislation after the Fourth of July recess. Unlike the House, the Senate has seen several floor votes on cap-and-trade bills in recent years. Although none of these bills won more than 48 votes, the chamber now has a solid understanding of the issues likely to make or break the new bill’s success.

Environment and Public Works chair Barbara Boxer (D-CA) will be largely responsible for drafting the bill’s cap-and-trade provisions. The Chairwoman says she will build upon the House version. She plans to introduce the legislation in the near future and have it marked up before the month is out.

Five other Senate committees will also likely weigh in: Agriculture, Commerce, Energy and Natural Resources, Finance, and Foreign Relations. Majority Leader Harry Reid (D-NV) has given all these committees until September 18 to produce their sections of the bill for a floor debate. Reid’s agenda is already packed for the rest of the year, as the Senate prepares to tackle health care reform, Supreme Court nominee confirmations, and this year’s appropriations bills.

Democratic leaders remain hopeful about sending a comprehensive climate and energy package to the White House. With 45 Senators in the “yes” or “probably yes” camp, they are within reach of the 60 votes necessary to defeat a filibuster. Another 23 Senators are undecided—these “fence sitters” are largely concerned about potential impacts of the legislation on their states. Central to the bill’s passage will be the support of moderate Democrats from industrial and agricultural regions, who say that the climate debate has not addressed their interests so far.

Farm interests will continue to play a major role in negotiations—in spite of the agriculture compromise struck on the House side, many farm groups are preparing to fight climate action in the Senate, where they hold greater clout. Since Senators must look out for their entire state, rather than only a congressional district, the large amount of farmland throughout the country gives farm groups a much greater chance of finding a sympathetic ear.

Opposing groups, including the American Farm Bureau Federation (AFBF), the National Cattlemen’s Beef Association, and the Agricultural Retailers Association remain opposed to the bill for a number of reasons. AFBF, for example, has expressed concerns about its potential impact on the cost of fertilizers—which depend on natural gas prices—and fuel for farm equipment. The federation suggested it could reconsider its stance if lawmakers add a provision to abandon the cap-and-trade system in the event that competitors China and India decide not to implement similar programs.

After a seven-year push from California, the Environmental Protection Agency (EPA) granted the state the waiver it needs to begin regulating greenhouse gas emissions from cars and trucks.

Just over a month ago, President Obama announced that new national auto standards would apply to cars manufactured in 2012. Although the emissions component of the national standards will follow California’s proposal, the waiver is still significant, because it will allow California and other states that choose to enforce their own emissions to begin with this year’s models. Thirteen states and the District of Columbia have already moved to adopt the California’s standards, and several others have suggested they could follow.

California’s request for the waiver was denied by the Bush administration, but Obama ordered a review of the decision after taking office. Although the auto industry originally challenged California’s attempt to regulate its own emissions, it later dropped the litigation as part of the compromise that led to the new federal auto standards. For more information, see the May 22 edition of the ESA Policy News at: https://www.esa.org/pao/policyNews/pn2009/05222009.php

On June 30, in response to litigation from a number of conservation groups, Judge Claudia Wilken of the US District Court for the Northern District of California threw out a 2008 rule to revise Forest Service management regulations for national forests and grasslands. Wilken said that the Forest Service failed to analyze the environmental impacts of implementing the rule, violating the National Environmental Policy Act (NEPA) and the Endangered Species Act.

The environmental impact statement from the Forest Service states that the rule simply establishes a process for developing land resource management plans and will therefore not impact the environment. But Wilken says that the new rule, unlike its 1982 predecessor, does not require plans for ensuring the viability of vertebrate species. Although the Forest Service pointed to the 2008 rule’s goal of developing frameworks that contribute to ecological sustainability, Wilken countered that its impact statement does not acknowledge the potential effects of removing the viability requirement. She is the third judge to reject the argument on these grounds.

The Forest Service also cited the Supreme Court’s recent decision in Summers v. Earth Island, which prevents advocacy groups from challenging federal regulations on public lands in cases where the groups are not directly threatened by the proposed rules. But Wilken said that decision did not bear on the case at hand because of the overarching nature of the planning rule.

The latest on 2010 appropriations:

IN THE HOUSE

Energy and Water: The Energy and Water Subcommittee’s recently unveiled $33.3 billion spending bill provides less than the White House requested for alternative energy programs and boosts funds for water development projects and nuclear power. Ranking member Rodney Frelinghuysen (R-NJ) said the subcommittee provided a more balanced energy portfolio than the original White House request, and that he is “pleased with the bill.” The full Appropriations Committee is planning a markup after the Fourth of July recess.

The Energy Department (DOE): $26.9 billion ($8 million less than current levels and roughly 5 percent below the White House request). Cuts include the $1.5 billion that the Congressional Budget Office said would be necessary to cover more than $40 billion in loan guarantee authority for the innovative technology loan guarantee program.

• Renewable energy and energy efficiency programs: $2.25 billion ($141 million less than the White House request) DOE already received $38 billion for renewable energy and energy efficiency related programs in the economic stimulus package earlier this year.
• Hydrogen-powered transportation systems: $40 million boost—the Obama administration did not request funding for this program.
• Nuclear energy programs: $50 million more than the White House request. The Nuclear Power 2010 program would receive $71 million, and the Next-Generation Nuclear Plant would receive $245 million.
• Yucca Mountain Nuclear Waste Repository: $197 million—the same amount requested by the Obama administration, and the minimum amount needed to continue the license application review and to create a panel of experts and stakeholders for reviewing other waste management options.
• Defense environmental cleanup: $100 million lower than the White House request and $275 million lower than 2009 current levels.
• Office of Science: $4.9 billion, the same amount requested by the White House and $200 million more than current levels.
• Fossil energy: $618 million, the same amount requested by the White House, but less than current levels. Funding would support research and development projects to advance lower-emission coal power, including carbon capture and storage projects.
• Strategic Petroleum Reserve: $229 million, the same amount requested by the White House and $25 million above current levels.

The Army Corps of Engineers: $5.5 billion ($139 million more current levels and $416 million more than the White House request). The increase would go primarily towards improving existing projects, as opposed to starting new ones. The agency received $4.6 billion for water projects in the economic stimulus package.

• Operations and maintenance: $2.5 billion ($309 million more than current levels) to address the growing costs of aging infrastructure.
• Construction: $2.1 billion ($19 million less than current levels)
• Flood control: Flood-damage reduction projects in the Mississippi River Valley would receive $133 million less than current levels, representing the largest budget cut for the Corps. As in 2009, flood control and coastal emergencies are not funded, although the White House administration requested $41 million for the line item this year.

Interior-EPA: On June 26, the House approved the $32.3 billion spending bill for the Interior Department, the Environmental Protection Agency, and the Forest Service. The bill provides a 17 percent funding increase over 2009 levels, allocating $420 million for climate change programs in environmental agencies. It now includes an amendment that aims to limit duplicative efforts among federal climate change programs—under the measure, the executive branch would have 120 days to complete a report on how it coordinates such programs.

The bill omits a number of oil industry taxes and fees proposed by the Obama administration, such as a use-it-or-lose-it provision to ensure that leases are developed on in a timely manner. It does, however, include a small fee for offshore drilling—payments will go towards financing a more strenuous auditing program for royalties.

Interior Department: $11 billion ($897 million more than current levels). The Bureau of Land Management would receive $1.12 billion (an $86 million increase)—new funds would go primarily towards non-energy programs. The Minerals Management Service would receive $181 million (a $17 million increase). A portion of the new funds would go towards enhancing for royalty enforcement programs for oil and natural gas leases.

Environmental Protection Agency: $10.5 billion ($2.9 billion more than current levels). Science programs would receive $850 million ($60 million more than current levels), and the agency’s greenhouse gas registry would receive $17 million, which is almost triple its current funding.

Forest Service: $20 million to fund studies in climate change mitigation.

IN THE SENATE (For information on the House numbers, see the June 19 edition of the ESA Policy News at: https://www.esa.org/pao/policyNews/pn2009/06192009.php )

National Science Foundation (NSF): The Commerce, Justice, and Science Subcommittee’s budget provides $6.9 billion for NSF ($426 million more than 2009 levels), including $5.55 billion for research, $122 million for research equipment and facilities, and $857 million for education activities.

US Geological Survey (USGS): The Senate Appropriations Committee approved a spending bill that would provide USGS with $60.5 million more than 2009 levels—the increase will go towards increasing the amount of support USGS provides Interior land management agencies, as well as other federal agencies and state governments. Programs receiving additional funding include:

• Global climate change research: $22 million increase
• National Streamgage Network: $5 million increase
• Arctic ecosystems research: $4.1 million increase
• Renewable energy research: $3 million increase