October 23, 2009

A joint New York Times op-ed from Senators John Kerry (D-MA) and Lindsey Graham (R-SC), may pave the way for a bipartisan climate bill in the Senate. The senators use their military service as common ground, focusing on the impact that climate change and energy could have on national security and the economy. The op-ed, which was welcomed by climate legislation advocates and undecided moderates alike, outlines a broad bipartisan agreement aimed at securing the 60 votes necessary for the bill to pass.

Graham has not committed his support to the draft bill (S 1733) released by Kerry and Senator Barbara Boxer (D-CA) earlier this month, but has pledged to play a major role in working out a compromise. Observers speculate that the senator’s move could help win the support of three other undecided Republicans: Senators John McCain (AZ), Olympia Snowe (ME) and Susan Collins (ME), all past supporters of cap-and-trade legislation.

The Kerry-Graham op-ed suggests a number of key compromises:

• Nuclear power: The senators propose measures to increase investment in nuclear waste management research and to streamline the permit system, maintaining “vigorous safeguards while allowing utilities to secure financing for more plants.” Several Republicans have indicated that a strong nuclear title could help win their support, although this would likely entail provisions beyond those discussed in the op-ed (many want nuclear projects to receive the same treatment as wind and solar power, including comparable tax cuts and inclusion in a national renewable electricity standard.)

Meanwhile, Clean Air and Nuclear Safety Subcommittee Chairman Tom Carper (D-DE) has partnered with Senator Joe Lieberman (I-CT) to work on a “more robust” nuclear title for the Senate bill. Carper says his bill will increase funding for the Nuclear Regulatory Commission, with an emphasis on boosting nuclear recycling and reprocessing projects; it remains unclear whether his amendment will also include language to streamline the approval process for new power plants. “We need to make sure that the Nuclear Regulatory Commission has the human resources that they need to enable them to do the job,” he said.

Obama has also expressed support for nuclear energy: “There’s no reason why technologically we can’t employ nuclear energy in a safe and effective way,” Obama said at a recent town hall meeting. “Japan does it and France does it and it doesn’t have greenhouse gas emissions, so it would be stupid for us not to do that in a much more effective way.”

• Offshore drilling: Graham is pushing for a drilling deal similar to the one proposed by last year’s “Gang of 10.” The bipartisan coalition of senators wanted to allow drilling within 50 miles of the coasts of Virginia, Georgia, the Carolinas, as well as the gulf coast of Florida. Under the proposal, states would have final say in whether to permit drilling, but would receive a cut of the revenue from any projects they did allow. The op-ed maintained that “any exploration must be conducted in an environmentally sensitive manner.”

Many wonder if expanded drilling could drive current supporters away. Several senators, including longtime drilling opponents Dianne Feinstein (D-CA) and Frank Lautenberg (D-NJ), have reiterated their opposition to drilling, although no one has said it would be a deal breaker.

Earlier this year, the Energy and Natural Resources Committee approved a sweeping energy bill (S 1462), which will likely shape the energy policy of the comprehensive Senate package. S 1462 includes provisions to expand drilling on Florida’s gulf coast, a compromise that Chairman Jeff Bingaman (D-NM) says helped to win the support of four Republicans on his committee. But Bingaman doubts that drilling provisions will have the same impact on lawmakers concerned about the impacts of cap-and-trade. “I tend to think people are going to consider cap and trade on its own merits,” he said. Indeed, several Republicans have continued to argue against the legislation, in spite of the concessions suggested by Kerry and Graham. “Tacking a bunch of good provisions on an extremely bad provision doesn’t get a bill that interests me,” said Senator Lamar Alexander (TN).

Oil and gas companies are similarly unconvinced, arguing that more drilling won’t offset the blow they expect to suffer from a cap-and-trade system. Industry representatives are particularly concerned that the Senate will follow the House’s lead in distributing free carbon permits during the early years of the program. To help industries adapt, the House-proposed system would give away 85 percent of the emission allowances for free (75 percent in the Senate version); for the first two years, electric utilities would receive 35 percent, while oil refiners would receive only 2 percent. But observers say the suggested language on drilling is not designed to win oil company support, as much as it is to give undecided senators “an excuse to find a way to vote” for the package.

• Border taxes: The senators said they would consider a border tax on items produced in countries that avoid high environmental standards. Heavy emitting industries in the US have pushed for such a provision, arguing that they would need them to remain competitive with countries not facing emissions regulation. Kerry and Graham also say this will encourage countries to institute emissions restrictions of their own. A border tax will be favored by lawmakers from manufacturing states, where international competition would take the greatest economic toll. The tax could strain diplomacy efforts, however, which is particularly critical in the midst of the UN climate talks. And one key swing vote, Senator John McCain (R-AZ), is adamantly opposed to the strategy, stating “I know that I’d never agree to tariffs on the borders for countries that don’t comply with our requirements.”
• Clean Coal: The op-ed urges the US to be “the Saudi Arabia of clean coal” and to create incentives for  carbon capture and sequestration research and development.
• Cost control: The letter also offers some possible adjustments to the Kerry-Boxer bill, placing particular importance on a price floor and ceiling for emission allowances. The senators stressed the importance of protecting businesses and consumers from rising energy costs. Boxer, however, plans to stick with the existing cost-containment language, which takes a “soft collar” approach, wherein EPA would release allowances into the carbon market via auction if permit prices exceed a certain level.

Kerry and Graham also raised a point that was critical in the House climate debate: If Congress fails to pass climate legislation, the Environmental Protection Agency will impose new regulations instead, which “will not include the job protections and investment incentives” currently on the table.” Industry, they said, “needs the certainty that comes with congressional action.”

As Kerry works to win over votes from the right, he runs the risk of alienating some of the bill’s left-wing supporters, who are likely to bristle at additional nuclear provisions and the possibility of expanded offshore drilling. Already, the op-ed paints a very different picture from the bill that Boxer plans to move in her committee, although Boxer has been supportive of the Kerry-Graham partnership.

By current estimates, Senate Foreign Relations Chair John Kerry (D-MA) and Environment and Public Works Chair Barbara Boxer (D-CA) can count on 31 senators to support their recently unveiled climate bill (S 1733). Another 12—including Maine Republicans Susan Collins and Olympia Snowe—favor the bill but have reservations about matters including fossil fuel interests and the possibility of a “border tax.” Roughly 24 senators are undecided, including Max Baucus (D-MT) and Maria Cantwell (D-WA) whose support for the bill has wavered recently in light of concerns over allocations and carbon market oversight. But previous opponents, Senators Robert Byrd (D-WV) and George Voinovich (R-OH), can now also be counted among the “fence-sitters”—Byrd has taken a leading role in drafting carbon sequestration language for the bill, and Voinovich may reconsider his stance if the nuclear title is strong enough. Seven other Republicans are considered in play, albeit on the fence: Lindsey Graham (SC), Energy and Natural Resources Committee ranking member Lisa Murkowski (AK), Budget Committee ranking member Judd Gregg (NH), Richard Lugar (IN), John McCain (AZ), Bob Corker (TN), and George LeMieux (FL).

Murkowski’s vote has been closely tied to nuclear provisions, and she welcomed the recent bipartisan op-ed from Kerry and Graham, which put significant nuclear incentives on the table. Still, in the rush to pass a climate bill before Copenhagen, Murkowski could present a significant obstacle. She is firmly opposed to moving a climate package before Copenhagen, arguing that the magnitude of the legislation requires more time for debate than the December deadline would allow. The senator has also has recently expressed concern over the distribution of free allowances, specifically that they will amount to “decades-long earmarks.” The Finance Committee has jurisdiction over the matter but has been embroiled in the healthcare debate. Chairman Max Baucus (D-MT) says he hopes to hold hearings before Thanksgiving, but has not yet suggested a time for a markup.

Meanwhile, Boxer, who has been waiting for the Environmental Protection Agency to finish its review of her bill, plans to begin committee hearings on October 27. The three days of hearings will include testimony from Energy Secretary Steven Chu, Interior Secretary Ken Salazar, EPA Administrator Lisa Jackson, Transportation Secretary Ray LaHood and Federal Energy Regulatory Commission Chair Jon Wellinghoff.

Boxer will likely spend the coming weeks working to win the support of moderate Democrats on her committee, including coal-state senators Max Baucus (MT) and Arlen Specter (PA). Since Democrats outnumber Republicans 12 to 7 on the panel, the bill can pass without any support from the right.

But whether the bill will reach the Senate floor this year remains unclear. Senate Majority Whip Dick Durbin (D-IL) says that his chamber hopes to be done with healthcare reform by mid-November, which could leave time to take up climate legislation in early December. Meanwhile, of the five Senate committee leaders planning work on the bill, only Boxer has set a schedule. Kerry is urging Senate Majority Leader Harry Reid (D-NV) to institute a Thanksgiving deadline for committee work on the bill—the two will discuss the matter in more depth during their October 23 meeting.

The Obama administration is proposing international trade restrictions for polar bears, corals, and six shark species.

The Fish and Wildlife Service (FWS) is seeking UN protection for several species under the Convention on International Trade in Endangered Species (CITES):

• Polar bears: The polar bear proposal seeks to elevate the species’ protections from “Appendix II” under CITES to “Appendix I.” In contrast to Appendix II, which allows limited trade, Appendix I is reserved for species at risk of extinction and prohibits all international trade of protected animals and their parts. It could significantly reduce polar bear sport hunts in Canada, since hunters from other countries would no longer be able to take trophies home. Canada allows big-game hunters to kill 105 polar bears each year, providing a significant source of income for guide groups, which charge as much as $30,000 per hunt.
• Coral: A coral proposal would grant Appendix II protections to red and pink corals often used to make jewelry.
• Sharks: Another proposal requests Appendix II protections for six sharks (the dusky, sandbar, and oceanic whitetip sharks, as well as the great, scalloped, and smooth hammerhead sharks). The European Union also submitted proposals to protect the porbeagle and spiny dogfish sharks—similar proposals were turned down in 2007. The global market for shark products—particularly fins—is placing increased pressure on all eight species. In the US, the House passed legislation to increase restrictions on shark finning in domestic waters; a similar bill is pending in the Senate.

FWS also submitted proposals to remove international trade protections for the North American bobcat and the cliff spurge, a desert plant common in windswept coastal areas. The US sought to remove trade protections for the bobcat in 2007 after instituting advanced management programs and domestic controls. The proposal was denied, however, following concerns from the European Commission that expanding bobcat trade could encourage poaching in similar species that remained threatened.

CITES is comprised of 175 countries, which will vote on the proposals at March meeting in Doha, Qatar.

Polar bears: On October 21, the White House Office of Management and Budget (OMB) completed its review of proposed habitat protections for the polar bear, sending it back to the Interior Department for introduction. OMB determined that the rule was not economically significant, allowing Interior to potentially move more quickly—the agency has until June 2010 to finalize the protections. Once proposed, though, these habitat protections will likely continue to be the source of debate. Polar bear protections have been a source of controversy since the species was listed as endangered by the Bush administration in 2008.

Habitat loss to climate change poses a major threat to polar bears, which means that protecting the bear under the Endangered Species Act could entail actions to regulate climate change—a major concern of industry groups and conservative lawmakers. On the other side of the debate are environmental groups, which want the protections to address not only climate change but oil and gas development. Specifically, they  dispute an exception in the polar bear’s listing that allows oil and gas companies to operate in protected habitat. Environmentalists are also pushing to extend the protections beyond existing habitat, to areas that were once inhabited but have since been lost to climate change.

Spotted seals: On October 16, the National Marine Fisheries Service rejected a proposal to list Alaska’s spotted seals as endangered. Environmental groups had petitioned for the listing on the grounds that sea ice, which the seals use for breeding and predator protection, is being degraded by climate change and energy development. The service acknowledged the declining habitat, but stated that the US spotted-seal population is large (over 200,000) and distributed enough to make extinction unlikely. The animals, officials said, will be able to respond to melting sea ice by migrating or otherwise adapting.  The agency proposed treating spotted seals in Russia and China as threatened, however, which would place constraints on seal imports from the two countries.

The multinational Persistent Organic Pollutants Review Committee recently announced that it will take steps to institute an international ban on the pesticide endosulfan. The committee will write a risk management plan for the pesticide, a prerequisite for listing it under the Stockholm Convention.  The Stockholm Convention is a global treaty aimed at protecting human health and the environment from toxic chemicals—participants will review the risk management plan at their May 2011 meeting,

Endosulfan is in the same family of chemicals as DDT. It is most commonly used on cotton, tomatoes, melons, squash, and tobacco, but has been banned in 60 countries because of its toxicity to humans and wildlife. India is a major producer and user of the pesticide and has long opposed efforts to ban it.

Congress recently sent the White House its 2010 energy and water spending bill, which provides $27.1 billion for the Energy Department, $5.3 billion for the Army Corps of Engineers and $1.13 billion for Interior Department water programs.

The Senate approved the conference bill on October 15 after failing to move forward on its Commerce-Justice-Science (CJS) spending bill the day prior. The chamber fell three votes short of invoking cloture on its $64.8 billion CJS bill, which would oversee 2010 funding for agencies including the National Science Foundation (NSF) and the National Oceanic and Atmospheric Administration (NOAA). The 57-37 cloture vote came after a day of fierce healthcare debate and fell entirely along party lines, prompting Senate Majority Leader Harry Reid (D-NV) to accuse Republicans of “legislating out of spite” on what he said was an uncontroversial bill. GOP lawmakers maintain  that their votes were entirely based on concerns over pending amendments, which include proposals to require new analyses of offshore fish farming and catch-share fisheries and to eliminate funding for political science projects at NSF.

The bill would give NOAA the largest budget it’s had to date, funding the agency at over $4.77 billion (9 percent above 2009 levels).

Three Democrats were absent for the vote, and Reid expects to secure the necessary 60 votes once they are present.

PASSED BY THE HOUSE

• Wetlands conservation (HR 3433): Amends the North American Wetlands Conservation Act to provide matching grants to organizations with wetlands conservation projects in the US, Canada and Mexico.
• Waterway protection in Washington state (HR 1593): Designates a 14.3-mile stretch of Illabot Creek as “wild and scenic,” protecting it against development and impediments to its flow. The creek provides significant habitat for chinook salmon, bull trout, and bald eagles. The Senate version of the bill (S 635) has received strong support from the Obama administration.
• Junior Duck Stamp Program (HR 3557): Reauthorizes the wetland education and conservation program at $500,000 annually (2010-2015).
• Californian wastewater recycling (HR 2442): The House voted 241-173 in favor of a bill to expand wastewater recycling efforts in the San Francisco Bay Area, providing an additional $38 million for several local projects. (In September, the same bill failed to garner  the two-thirds majority necessary to pass under suspension of the rules.) The House rejected a Republican amendment to increase water flows to drought-ridden farms in Central Valley and temporarily waive Endangered Species Act protections for endangered fish in the region. Opponents of the amendment said that enhancing wastewater recycling would help resolve disputes over water rights by “removing urban pressure.” In September, HR 2442 failed to clear the House under suspension of the rules.
• Solar energy (HR 3585): The House voted 310-106 in favor of a bill to boost support for solar energy research and development. HR 3585 would direct the Energy Department to appoint a team of experts to develop a long-term research plan for transitioning solar energy into commercial use. It would also authorize $2.25 billion for research and development, some of which would go towards technology development projects during 2011-2015. The measure received a great deal of bipartisan support, although some Republicans objected to it, largely because of costs and the potential conflict of interest in placing industry representatives on the expert committee. No companion legislation has been introduced in the Senate so far, although sources on the Hill say it could be included as part of the energy and climate package when it reaches the floor.

UNDER SUBCOMMITTEE REVIEW

• Environmental literacy (HR 3644): Would expand funding for two National Oceanic and Atmospheric Administration (NOAA) programs designed to support environmental education. The bill would authorize a total of $235 million through 2015 for the Bay-Watershed Education and Training Regional Program and Environmental Literacy Grant Program—both programs are currently funded as part of NOAA’s general budget. Supporters of the bill include Representative Lois Capps (D-CA) and Vernon Ehlers (R-MI). The Obama administration also voiced its support for the bill at a recent subcommittee hearing, where NOAA’s director of education spoke of the need to increase American competitiveness and train the coming generations to deal with emerging environmental challenges. But several Republicans dispute whether the programs represent the best way to accomplish these goals, particularly in light of the deficit.

AGENCY ACTIVITY

• Mountaintop mining: On October 16, the Environmental Protection Agency (EPA) issued a notice of plans to retroactively veto a Clean Water Act permit previously granted to West Virginia’s largest mountaintop coal mine. The mine received a permit in 2007, following years of environmental reviews and modifications. But according to the notice, EPA found that “significant improvements should be made to this mine to reduce the scale and magnitude of anticipated environmental and water quality impacts, as the Clean Water Act requires.”

Before being finalized, the veto must be formally announced on the Federal Register and opened to public comment. If enacted, it will mark the first time a permit has been revoked since the Clean Water Act was passed in 1972. EPA says it has no plans to revoke permits from other mountaintop mines. Still, coal industry representatives are concerned that the impact could discourage investment and cost jobs.

The agency says that it will continue to support coal mining in Appalachia, so long as it complies with environmental laws.