Will Sen. Inhofe find a way to get Clear Skies out of EPW? Will ANWR drilling be in the Senate budget reconciliation measure? Get the latest take on these key issues and several others as E&E Daily's senior reporters distill the action from this week in an OnPoint roundtable discussion.
Colin Sullivan: Welcome to OnPoint. I'm Colin Sullivan. Today we have a reporter's roundtable to discuss what's happened in Congress up until now with Congress set to go on its Presidents Day recess next week. We're joined by Mary O'Driscoll, Darren Samuelsohn and Ben Geman, all reporters with E&E Daily and Greenwire. Thank you all for being here. Darren, let's start out with a softball. What happened in the EPW Committee regarding Clear Skies?
Darren Samuelsohn: Well, they had the markup that they've been long talking about --
Colin Sullivan: They didn't have the markup.
Darren Samuelsohn: Well, they had what was supposed to be a markup and then it got postponed. Senator Inhofe brought everybody into the room. He announced that the Republicans were going to go caucus in their own separate chambers and at that time a bunch of Republicans went into their room together. Senator Baucus joined them and they apparently couldn't come to an agreement. Senator Inhofe came back out and he said that they're going to postpone things for two weeks so that member-to-member discussions, negotiations, can continue with a markup scheduled now for March 2.
Colin Sullivan: So what happens next? They're trying to peel off one or two votes, likely Lincoln Chafee or Senator Max Baucus. What's going on right now? What's going to happen over the recess as staff tries to negotiate?
Darren Samuelsohn: As I just said, members are meeting and Inhofe says that he's going to continue to have his door wide open for anybody who wants to come in. They're trying to peel off one or two people. They've added some language to the most recent version of Clear Skies that has some parochial things that maybe could get Baucus to come onboard. They're going to probably try and keep sweetening the deal, as much as possible, to get one or two votes. They'd love to get a unanimous vote out of committee. I think Senator Jeffords though and some of the other Democrats on the committee, well Jeffords being an independent, but the other Democrats on the committee are not going to want to go for Clear Skies. But it's very possible that they could try and sweeten the deal and get Baucus, is the most likely candidate, yeah.
Colin Sullivan: So we'll come back to that in a second. For now I'd like to go to Mary and talk about what's going on with energy on the Hill. Another eventful week in terms of what happens with ANWR on the House side --
Mary O'Driscoll: Right.
Colin Sullivan: Whether or not they're going to have a markup on the House Energy and Commerce Committee. What's the update?
Mary O'Driscoll: Well actually, there was a lot of smoke, but no real fire this week. There was a lot of talk about ANWR. Energy and Commerce Committee Chairman Barton and Energy and Air Quality Subcommittee Chairman Hall came out and said that they wanted to take ANWR in a different direction. They didn't want it on their bill and that they wanted it to go on its own. Hall actually said that he wanted to expand the size of the area that could be drilled, so they wanted to set that aside, which, of course, did not sit well with Chairman Pombo of the House Resources Committee and apparently not well with Majority Leader DeLay either. DeLay issued a statement the next day saying ANWR will be in the energy bill that the House passes and that is it and made a very, I think a very, pretty obvious case for all of the committees in the House there are involved in this talking about the budget issues that are going to be front and center because the ANWR one is very tangential. It just became the most obvious one that everyone talked about this week.
Colin Sullivan: Is there a larger tension here at work between DeLay and Barton and Thomas and Pombo? It seems like Thomas and Pombo and DeLay aren't really happy with Barton's control of the process so far, whether it's in terms of taxes or in terms of drilling in the Arctic refuge.
Mary O'Driscoll: Yeah, well what essentially happened was that Barton introduced a draft discussion bill that was essentially the conference report from last session and it included a tax provision and it included everything that was in that bill. It didn't sit very well with Ways and Means because they have the last say over what goes in taxes and the tax package in there essentially reflects about $19 billion in tax benefits and things like that for the industries. It's not going to be anywhere near that. So the thinking was that Ways and Means would like to have been able to participate in at least this initial unveiling of this and now they're gonna look like the bad guys because they have to tell all the energy industry people that you're not getting $19 billion.
Colin Sullivan: So Ways and Means Chairman Thomas has been known to go off on his own before. Do you think that's likely again this time? Is he going to come out shouting and saying we want this much in energy taxes?
Mary O'Driscoll: I don't know, they've got a pretty tight energy tax proposal from the White House for FY 'O6. They put in about $6.7 billion. Indications from Thomas and Barton and also on the Senate side from Senator Domenici are that it's not going to be anywhere near $6.7 billion, it's going to be more. Domenici kind of gave, he said it won't be as high as the $14 billion tax package that was in his pared down version of the energy bill last year, but he said it will not be $6.7 billion either.
Colin Sullivan: Ben Geman, let's move on to you and talk about ANWR more in-depth. I think what we're saying here is regardless of what happens on the House side, DeLay putting it in the energy bill, not putting it in the energy bill, it's not likely to move through the Senate via an energy bill. It's likely to move through the budget process. So what's the latest on, what's going on with that process, the budget process?
Ben Geman: Yeah, that fight this week between Barton and Pombo and will it be in the energy bill or not was interesting, but it was a bit of a tempest in a teapot, because as many people have pointed out, it's very, very difficult, probably impossible actually to get ANWR provisions through the Senate in an energy bill, so it's simply not conference-able. So what we're going to see is more likely ANWR attached to budget provisions which can't be filibustered in the Senate. What's interesting is that Budget Committee Chairman Judd Gregg is still not addressing the issue. I saw him this week. I asked him what you think about putting ANWR remedies in the budget and again he said, you know what, we'll just have to wait and see.
Colin Sullivan: Now, is that a case of Senator Gregg being against it or is it a case of Senator Gregg not wanting to be out in front of ANWR or just not wanting to comment until they're in the drafting process, which they are now, the preliminary stages of?
Ben Geman: Yeah, I think it's probably the latter. I think at this point there's a strong possibility that Senator Gregg, well I mean I can't speak for him of course, but that at the end of the day he might be willing to accept ANWR provisions and the reason I say that is because Energy Committee Chairman Pete Domenici, a very strong proponent of ANWR, has said, and in no uncertain terms, it's going to be in the budget resolution. He's been very firm on that and obviously in the Senate, you know, people go their separate ways and it's not always a unified body, needless to say, but he said it with such certainty and several times that I have to think that there's a very strong chance it will show up in the budget.
Colin Sullivan: OK. If we can go back to Mary real quick, last year MTBE versus ethanol sort of doomed the energy bill.
Mary O'Driscoll: Right.
Colin Sullivan: What's the likelihood of a compromise there on MTBE?
Mary O'Driscoll: Well, that's really unclear. There's a lot of people in the Senate side that are really afraid that there's going to be, that they're going to run into the same impasse that they did last time on this. Where it was what broke the energy bill down. But I really think what's going to happen is that they're going to ignore it, at least through the initial part of the energy bill debate. The House will pass it as part of their part of the bill. Although it'll be interesting, and a side note, is if they have to do a full committee markup in Energy and Commerce Committee, if they have to vote on that that's going to be a pretty uncomfortable vote for a lot of members of the Energy and Commerce Committee. So that will be something to keep an eye on. The House is likely to pass it and send it over. Well, it's not going to be part of anything the Senate does so we're not going to see any real serious negotiation on this until deep into the conference.
Colin Sullivan: So Domenici will avoid MTBE reliability relief completely?
Mary O'Driscoll: Yeah. It will not be in the energy bill in the Senate.
Colin Sullivan: But it'll be in the House bill?
Mary O'Driscoll: Oh yeah.
Colin Sullivan: Whatever the Senate bill is not in there and then we'll see in conference.
Mary O'Driscoll: We'll see what happens in the conference.
Colin Sullivan: So again, we'll wait till the end of the session and then MTBE will go through the whole process.
Mary O'Driscoll: Isn't it amazing how those things work out?
Colin Sullivan: Darren, speaking of negotiations, one of the possible compromises on Clear Skies is some sort of, not a mandatory carbon cap, but something dealing with carbon dioxide emissions. What are the different proposals that are being floated out there in terms of, that might break this impasse on Clear Skies?
Darren Samuelsohn: Well, Senator Voinovich, the chairman of the Clean Air Subcommittee, yesterday he mentioned a couple of things that he really had never gotten into before or hadn't gotten into in such detail, carbon sequestration, forest proposals. Senator Hagel's bill that's been introduced earlier this week in a speech will be something that's out there as a possibility as well. Other ideas are also sequestration as I said before, so he's really not giving a heck of a lot of full-on detail, but he's teasing that the possibilities are there. It's not going to be a cap. So will it satisfy somebody like Baucus? It's very possible. Baucus has said a cap is not the most important thing to me, but it can't be a fig leaf. I think though, CO2 is going to be something that if they're going to try and move Clear Skies through committee, again, CO2 is not going to be the thing they're going to work on for compromise. It's going to be Clean Air Act language that has been controversial. Things taking away things from the 1990 Clean Air Act amendments, petitioning for upwind states, New Source Review, national park wilderness area, visibility issues. There'll be, like I said before, parochial issues for allocations of credits for sulfur dioxide and nitrogen oxide, so that some utilities will stand to benefit a heck of a lot more than others. You know that is a very expensive allocation system when they start to dole out credit. You can get votes that way too.
Colin Sullivan: And part of what Chairman Inhofe tried to do this week was put in language designed, perhaps specifically, for Max Baucus.
Darren Samuelsohn: Yeah.
Colin Sullivan: Can you talk about that language, specifically the Montana coal?
Darren Samuelsohn: Yeah, he actually put in some language dealing with a mine in southeastern Montana that has high sulfur coal and it competes with Powder River Basin, which is low sulfur coal. This particular mine is owned by Westmoreland Resources and it's leased by an Indian tribe, the Crow Indian Tribe, and they are trying to get their coal taken to a power plant in Minnesota. So what's going on right now is they're seeing Powder River Basin coal with a much better deal that they can offer this power plant. So there was some language in the bill that offered this particular power plant some credits, allocations and the SO2, the Sulfur Dioxide Trading Program that makes it economical for them to be able to sell their coal. Baucus has indicated that Montana coal is like his most important priority. That he's going to stand up for his state interests. Whether or not that gets his support, it was unclear yesterday. They didn't hold the vote, so we don't know exactly where Baucus is right now.
Colin Sullivan: And what's his position on carbon?
Darren Samuelsohn: Baucus' position on carbon? Again, he said it can't be a fig leaf for CO2, but it doesn't have to be a cap.
Colin Sullivan: So you put in some sort of bone in there that deals with Montana, perhaps more aggressively, and he might be able to, he might settle for the Hagel bill or settle for some sort of registry?
Darren Samuelsohn: Yeah, he'll be pressured by environmentalists to stand firm and try and push for something that's mandatory. They would love to see him come out in support of a bill that he was a cosponsor of, the Carper proposal a couple of years ago, but he took his name off of that. Remember he voted against Jeffords' bill in 2002, so he's been a little bit of a hard person to put your finger on exactly where he is on CO2. Will he follow the Democratic leadership? Will Harry Reid be able to whip him into line? I think CO2 probably is going to end up, if Clear Skies is going to move it's going to probably be a separate equation, because remember as well, the House is never going to pass a bill with CO2. So if you conference something --
Colin Sullivan: So again we're back to all this stuff is not going to get conferenced. Speaking of something that's not likely to pass, renewable portfolio standards. There's been several bills, no offense, but there's been several bills floated this week that 20 percent RPS, 10 percent RPS, can you give us an update of what's out there at this point? What's on the table for renewables?
Ben Geman: Right. Today we've had Senator Jeffords and then several Democrats in the Senate introduce a bill that would create a renewable portfolio, excuse me, a renewable electricity generation standard of 20 percent by 2020. Then on the House side, we also had some legislation today come in, it was a bipartisan bill coming from Representative Udall and Representative Leach and some other GOP moderates, that would I guess do 20 percent by 2025. Both of these are well above what's been even considered for the Senate side of the energy bill. The House is considered very tough sledding for any kind of renewable generation standard. There is some hope that, it's passed before in the Senate, however hasn't made it into final version, but you know in the conference last year --
Colin Sullivan: So in the event that a comprehensive energy bill passes, we might see some language similar to a couple of years ago when Tom Daschle was in charge of the Senate --
Ben Geman: Yeah.
Colin Sullivan: Was able to sort of craft the energy bill on the Senate floor. They put in a 10 percent RPS. Is that something not that strong, something in that ballpark, that's possible in the Senate?
Ben Geman: Yeah. That is. That would be lower than what's contained in the legislation that was introduced this week and a lot of people think that's pretty possible. Domenici has said he wants to have a much more, sort of, inclusive bipartisan process this time around. He's indicated that he's willing to listen, so I wouldn't be surprised at all to see some type of renewable generation standard in the Senate, but again, in the House, whether it's anything more than a total nonstarter really remains to be seen.
Colin Sullivan: OK. In a related issue, again Mary, getting into electricity, there's been some back and forth this week between John Dingell and Joe Barton on the electricity talk. Can you tell us what's going on there with the reliability language and some of the other problems there?
Mary O'Driscoll: Sure. Dingell is, this has become his real issue, is the electric reliability. His district was hit pretty hard by the August '03 blackout, so he's really made it a cause to try to get this reliability, the mandatory reliability requirements and rules for the electric power industry and to make that into law. So he's introduced and I think Cantwell on the Senate side has introduced similar legislation that takes, essentially, the reliability language out of the energy bill and sets it up on its own. This is one of those things where they're calling attention to it, but it's not likely to pass on its own because the Republican leaders on both sides of the Capitol are determined to do comprehensive energy legislation and they don't want to break it up. Now, maybe they could break it up, but I think the strategy is that you don't want to break up an energy bill, because an energy bill is greater than the sum of its parts really, because you're getting everybody to buy into a great big bill that gives a little something to everybody. So it's very difficult to break those things out, to break them out, if you have multiple priorities, electric reliability, natural gas issues, any of these kinds of things, anything for nuclear, it's very difficult to pass them individually because maybe only one, maybe two, but mostly only one will pass because the Congress doesn't like dealing with energy on this little case-by-case basis.
Colin Sullivan: Do you think electricity restructuring and reliability, is this an intractable issue on the Hill? I mean this has been around for a long time and it seems like there's so many different regional issues that come into play --
Mary O'Driscoll: Oh yeah.
Colin Sullivan: And so many different regional political angles that come into play. What's your comment on that? Do you think it's in intractable fight on the Hill?
Mary O'Driscoll: Well, at least for right now. You've got the regional things that come into play because the people from the South and the West don't like what the Federal Energy Regulatory Commission is doing with market structure. And you have people from the Northeast that operate under these regional markets, that are called RTOs, it's fine with them, so you have this dichotomy here where you've got people fighting for different things. Even within the industries themselves people have very different and divergent views on these things. So I think it goes to that. It goes to the fact that Congress, the Senate doesn't like the current leadership of the Federal Energy Regulatory Commission. Pete Domenici even said this week, I asked him, you know if the FERC commissioners have proposed to the members of the House Energy and Commerce Committee that they be given some extra powers and that the electricity title be changed in a way that would give them a little more expanse of powers and he essentially said maybe if the leadership at FERC changes, I don't know. I think that's an indication of where the Senate is as a whole.
Colin Sullivan: So Pat Woods is not going to be back?
Mary O'Driscoll: Well, you know, I think if you listen to people kind of talk, not for attribution on the Hill, yeah, they're not wild about him.
Colin Sullivan: Not for attribution unless they're on OnPoint. Darren, you've done a vote count on Clear Skies --
Darren Samuelsohn: Yeah.
Colin Sullivan: If it gets through the committee, do they have 60 votes on the floor? I mean, assuming they get through committee, it means they have some sort of strong compromise. If they wanted to bring it straight to the floor would they have 60 votes?
Darren Samuelsohn: No. They don't have 60 votes right now. They have about 44 votes right now, guaranteed. Looking through the list they would at least have 44, 16 votes could potentially be up for grabs. A lot of those are Democrats that you wouldn't consider to be, I guess, of the more liberal bent in the Democratic caucus. People that might be able to be picked off because they're from energy extractive states, people from Arkansas, South Dakota, North Dakota or places where CO2 maybe isn't something that the constituencies are screaming about or Clean Air Act pollution issues are not, the constituents aren't screaming about it. So we'll, in the course of the next couple of week it's possible that, again, they might try to sweeten the deal and pick off some Democrats and a couple of Republicans who have so far come out and said that they have problems with Clear Skies. People like Senator Burr, Senator Alexander, Senator Gregg have all said that they have problems with Clear Skies. They've either supported another bill or said that they want to change something in Clear Skies. Those people also, I'd imagine the administration, in little things that they can do, and Republicans in the little things that they can do, might be able to get them on board.
Colin Sullivan: Now do you have an indication of, switching to another topic, the EPA administrator is still an acting administrator. Any indication that Stephen Johnson might be retained as administrator or are we going to see Jim Connaughton as head of EPA?
Darren Samuelsohn: Yeah, Jim Connaughton won't say anything about it. I'm under the impression that CEQ is probably gearing up, very soon, to actually start vetting a person. They might already have somebody in mind, but still, nothing from the White House on this, at this point. By postponing the markup for two weeks on Clear Skies that's probably raising people's, you know, people are wondering right now, two more weeks, would an EPA administrator distract the Senate committee from trying to deal with an EPA administrator? It would probably throw a monkey wrench into the process, but as Jim Connaughton said on OnPoint once already, the Senate can walk and chew gum at the same time.
Colin Sullivan: It's hard to say on OnPoint.
Darren Samuelsohn: It is hard to say on OnPoint.
Colin Sullivan: Part of the problem with our show.
Mary O'Driscoll: Can you walk and chew gum at the same time?
Colin Sullivan: We're going to have to leave it at that. Mary O'Driscoll, Darren Samuelson, Ben Geman, thank you all for being here. Join us next week for another edition of OnPoint. Until then I'm Colin Sullivan with E&ETV.
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