CLIMATE:

Demands pile up for Boxer, Kerry headed into summer break

The Senate breaks at the end of this week for a monthlong summer recess, but not before the Environment and Public Works Committee takes one more swing at the legislative debate over climate change that promises to sizzle through the fall.

Interior Secretary Ken Salazar is the lead witness for three star-studded panels Thursday that also include top officials from the Federal Energy Regulatory Commission, Energy Department, Environmental Defense Fund and MidAmerican Energy Co.

The EPW Committee is at the center of the Senate effort to pass cap-and-trade legislation, with Chairwoman Barbara Boxer (D-Calif.) and Foreign Relations Chairman John Kerry (D-Mass.) pledging to produce a draft bill when lawmakers return Sept. 8.

As they write their bill over the break, Boxer and Kerry can expect no shortage of suggestions.

Liberal Democrats, for example, want stronger emission targets compared with the House-passed bill. Coal-state senators are pressing for changes to a delicately crafted House deal that would send their electric utilities a larger share of free allocations. And expanded energy production sits atop the wish list for oil patch Democrats.

On emission limits, a handful of Democrats on the EPW Committee want Boxer to set a 20 percent target for 2020 to reduce greenhouse gas emissions -- rather than the 17 percent target below 2005 levels that is now in the House legislation, H.R. 2454.

"I like the House bill, don't get me wrong," said Sen. Ben Cardin (D-Md.). "But I think we can do better."

"That's the objective, as far as I'm concerned," added Sen. Frank Lautenberg (D-N.J.). "Because the glide path has to be established that enables us to get to 80 percent in 2050. You can't get there unless you start aggressively pushing."

Boxer has not said yet where she wants to set the Senate bill's emission limits, but her fellow Democrats are hoping they can appeal to the chairwoman's environmentalist side.

"I know where she is philosophically," Cardin said. "But I don't know where she is on drafting."

Pressure directed at Boxer is coming from all sides. Environmentalists have been standing outside the EPW Committee room at recent hearings dressed up in big muscle costumes, urging her to strengthen the bill by setting a 40 percent cut in emissions by 2020. Others would like her to go in the other direction, including most major electric utility companies and some of the very moderate House Democrats who helped push their bill across the finish line, including Rep. Rick Boucher (D-Va.).

On the EPW Committee alone, Boxer must contend with at least two senior Democrats -- Max Baucus of Montana and Arlen Specter of Pennsylvania -- who represent states with large amounts of coal production and who likely would side with legislation that sets less aggressive emission limits.

Jason Grumet, a former campaign adviser to President Obama, said there is little reason for Boxer to try and set stronger emission targets when Obama opened this year's debate calling for a 14 percent target by 2020.

"There's not a lot of room to expect to move the legislative product more aggressively than the House," said Grumet, the executive director of the National Commission on Energy Policy. "You have to ask how much value there is in pushing the bill. What does the advocacy community get by pushing farther to the left if there's no sense they can sustain that outcome?"

Turning the dials

Other battlegrounds in the upcoming Senate debate center around how to distribute hundreds of millions of dollars in emission allowances, as well as the prospect of expanded domestic energy production. Each issue brings with it the opportunity to pick up supporters as Democratic leaders try to reach 60 votes and defeat the expected GOP-led filibuster, though any major concessions could also topple existing coalitions.

Boxer and Kerry have their own ideas about how to tackle the allocation issue. But Baucus, who chairs the powerful Finance Committee, said last week that he plans to produce allocation language of his own by late September that meets Democratic leadership's deadline for floor action (see related story).

Several Democratic senators from states that rely predominantly on coal -- including Byron Dorgan of North Dakota, Tom Harkin of Iowa and Ben Nelson of Nebraska -- have recently spoken about the need to change the House bill's allocation formula, echoing the views of Bill Fehrman, president and CEO of MidAmerican Energy Co. Other Democrats would prefer to keep the House system for distributing billions of dollars in allowances.

On oil and gas production, Sen. Jeff Bingaman (D-N.M.) has already passed energy legislation through his Energy and Natural Resources Committee that includes a provision that could bring oil and gas rigs closer to Florida's Gulf Coast.

Sen. Mary Landrieu (D-La.), who voted against the bill in Bingaman's committee, wants more.

"I'm using this time to try respectfully to educate members of my caucus, and maybe some Republicans, about the importance of natural gas, the importance of domestic energy security, so we don't lose that in this debate." Landrieu said. "It's not just about cleaning up the environment. It's about securing America's economic future. And both are important."

Grumet said Democrats could pick up a large contingent of Republican votes if they broaden their circle to address concerns raised by the oil and gas industries.

"This is too big a piece of legislation to not have all the key constituencies with their voices at the table," Grumet said, adding that the industries were not engaged in the House debate because Republicans spoke up from the start in opposition to the bill.

Yet Democratic leaders also must be mindful that some of their very own -- namely Sens. Bill Nelson of Florida and Robert Menendez of New Jersey -- could oppose an overall energy and climate bill if it goes too far on offshore oil and gas production.

Then there are the nuclear power proponents. Many are looking to Sen. Joe Lieberman (I-Conn.), a former EPW Committee member who co-sponsored several previous cap-and-trade bills with Sen. John McCain (R-Ariz.), as their leader on the issue.

Lieberman said he has spoken with Boxer about his plan to work with Democrats and Republicans who do not serve on the EPW Committee, with an eye on winning over enough votes to defeat an expected filibuster.

"We'll be offering amendments, suggestions, that will change the bill to get us to the 60," Lieberman said last week. "I think the bill Senator Boxer and Kerry write will be an important start, but we'll need to do work on it to get us to 60."

But Lieberman also must be mindful of pushing too far considering the longstanding opposition from Majority Leader Harry Reid (D-Nev.) to the Yucca Mountain permanent waste storage site. Boxer's own past voting record on nuclear issues also deserves mention. In 2005, she joined with Harkin and two other Senate Democrats in a floor vote against a McCain-Lieberman climate bill because of what she said were too many giveaways for the nuclear industry (E&E Daily, June 23, 2005).

Boxer and Kerry last week refused to go into any specifics on their draft legislation except to say they are relying on the House-passed measure, albeit with changes. "We're tweaking it as we go, section by section," Boxer said.

Environmental groups are also pushing the Senate for a more aggressive piece of legislation. But Jeremy Symons, vice president of the National Wildlife Federation, said the differences may be more subtle than many expect.

"What we're really dealing with," he said, "are a bunch of dials that you can adjust one direction or another."

Schedule: The hearing is Thursday, Aug. 6, at 10 a.m. in 406 Dirksen.

Witnesses: Interior Secretary Ken Salazar; Jon Wellinghoff, chairman, Federal Energy Regulatory Commission; David Sandalow, assistant secretary for policy and international affairs, Energy Department; Fred Krupp, president, Environmental Defense Fund; and Bill Fehrman, president and CEO, MidAmerican Energy Co.

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