As the Democrats take control over both houses of Congress, the future of energy and environmental legislation remains to be seen. During today's OnPoint, E&E Daily senior reporters Mary O'Driscoll, Ben Geman and Darren Samuelsohn discuss key issues that will be taken up by both the House and the Senate this year. Reporters discuss Sen. Barbara Boxer's (D-Calif.) influence on climate change legislation, Sen. Harry Reid's (D-Nev.) affect on the future of Yucca Mountain, the possibility of an overall energy package, oil tax and royalty relief, and what to expect from the president's upcoming State of the Union address.
Monica Trauzzi: Welcome to OnPoint. I'm Monica Trauzzi. Joining me today for a reporter's roundtable are E&E Daily senior reporters Mary O'Driscoll, Ben Geman and Darren Samuelsohn. Thanks for joining me guys.
Ben Geman: Sure.
Darren Samuelsohn: Glad to be here.
Mary O'Driscoll: As the Democrats take control of Congress they are talking a lot about oversight investigations and basically making an overall change to the way that Congress works. Will these reforms actually happen and if they do, how much of a change can we expect from the previous Congress?
Mary O'Driscoll: I think you'll see a lot of activity just out of the gate, just to get some things moving, but I think things will, they inevitably slow down, the whole process. And then you're going to have been working on legislation and investigations at the same time. The investigations are going to take a little while to kind of get going too because they have a lot of groundwork to lay and questioning and depositions and all that kind of stuff in the investigations to do. So I think that that will start happening probably the latter part of the spring or summer or something like that, maybe even the fall, when we really start seeing a lot of activity, a lot of hearing activity and that kind of thing. But I think a lot of the investigations will be behind the scenes for a while. But the legislation, you know the House is going to come out with both guns blazing and come out and do a lot of the energy stuff. But once you get to the Senate things are going to definitely slowed down, as Senator Bingaman and other senators have said first thing last week.
Ben Geman: Yeah, I think on the oversight piece one thing I do think that a lot of Democrats see is really ripe for the picking, and will do somewhat quickly, is oversight hearings on the Interior Department's royalty collection program. I mean there's a lot of problems with that that's been widely reported on. And I think we're going to see some action on that relatively soon. Now there were some looks at this end of the Republicans to be fair, but I think the Democrats are eager to sort of take it up a notch so to speak. I mean, look, you've got a lot of sort of things that they want to go after. You've got big oil, which is always sort of a target that they're going to look for. You've got the industry's relationship with the administration. I mean I think we're going to see a burst of activity on that issue as well.
Monica Trauzzi: Darren, a major focus, among the Democrats, has been climate change legislation. And with Senator Boxer as the chair of the Senate EPW Committee, how much she influenced the legislation for climate change. She's a senator from California. They just passed an aggressive cap on greenhouse gas emissions, so how is she going to play into this?
Darren Samuelsohn: This is going to be an interesting time for Senator Boxer. She will now be in charge of the committee as opposed to just being a senator from California where she could previously talk about her issues, talk about her concerns, whether it be children's health, environmental issues. Now she's talking for the entire Democratic Party as the chairman of the Environment and Public Works Committee. So right away, right after the election for example, she came out and said that she wanted to move legislation that was as strong as California. Will there was pretty quickly some push back that that's not going to happen. Not going to happen for the entire United States, not with senators from coal states, from oil states that would have to be participating in this process. And she has said that, so you can see that she has already transitioned, that she is now aware that she has to reach out to other senators. One of the first hearings I think she's going to hold is she's going to invite senators in, congressmen in, and I think that just you're going to get the lawmakers testifying before Senator Boxer's committee offering their ideas. So while she might want and she might set down the benchmark from the left, I think that she is going to definitely be listening to what the senators from the center have to say.
Monica Trauzzi: And how likely is passage of climate change legislation? Will we see the Republicans and the Democrats finding common ground or are the Democrats going to have to water down their proposals?
Darren Samuelsohn: Well, before we even knew the Democrats were in charge most people were saying 2008, 2009, 2010, were the likely years. Now the Democrats are in control. We know that Senator Reid, for example, is saying that climate change is going to come to the floor in the springtime period. So that means that Senator Boxer has been given instructions and I think Senator Bingaman as well has been given instructions to try and figure out what kind of climate bill they might be able to get through their committee in the first couple of months. Now the important thing to keep in mind is will it be a cap on emissions or will it be some other climate related sorts of things? Whether it be CAFE, whether it be renewable portfolios, standards, whether it be energy efficiency green buildings, you know, there's a whole host of things. Senator Boxer said in an interview on NPR that there are like 14, 15 things that scientists recommend that we can do to deal with climate change. She doesn't think she's going to be able to get all 14. She might have to get seven, eight, nine or 10 of them. So that's probably where things are headed.
Monica Trauzzi: Ben, several key energy and environmental issues are coming into play early on this time around. The Democrats have plans to take up oil taxes and royalty relief. Talk specifically about how they may change things for the oil companies.
Ben Geman: Yeah, this is something that's going to happen fairly quickly in the House. Now, of course, as Mary mentioned, things work much more slowly in the Senate, but right out of the gate the House Democrats have made an oil tax and royalty relief package part of their sort of first hundred hour showcase. Right now they're planning a vote on January 18. And what that package would do would repeal certain tax breaks for the large integrated oil companies, or what people tend to refer to as big oil. Those include certain favorable tax treatment for the cost of oil exploration as well as some deductions on income for domestic manufacturing. Now right now the manufacturing deduction applies to oil and gas. And I think what House Democrats want to do is sort of remove that industry's eligibility for that. And then of course there's been this huge controversy over these deepwater Gulf of Mexico leases. And there's going to be an effort to sort of address some of the problems with those to ensure that royalties are paid. And what they want to do with all this, and I think we're going to see a lot of coupling of these two ideas, both in the House and the Senate, is take these revenues that come in, somewhere in the billions of dollars they hope, and steer it into alternative energy. You know, again, we're going to see a quick burst of that in the House even though, and I think industry is resigned to sort of something clearing that chamber. But the Senate is a real different body. I was speaking with Senator Baucus, who's the chair of the Finance Committee, which addresses tax policy, and he agreed that Democrats are also going to want to go after industry tax breaks. And that's something Harry Reid has said, that's something Jeff Bingaman has said. But he also said I want to, you know, he injected in a precaution; he said I want to get the facts out. I want to go slowly. So look for the Senate to be the place where this sort of receives a much, I think, longer-term consideration.
Monica Trauzzi: And what have you all heard about an overall energy package? Is it likely? Can we expect it all in one piece? And what might be included in it?
Darren Samuelsohn: It's going to be dribs and drab. Pieces are going to come to the floor when they're ready, that's what I'm hearing.
Mary O'Driscoll: Right, and there's also a school of thought out there that, kind of bear with me on this, that you've got the 2005 energy bill. You know, love it or hate it, whatever you think of it, it passed in 2005 and those kinds of bills come along very rarely. And a lot of the elements that you're talking about with energy right now are ideas that largely were discarded at that time. That lawmakers knew they were never going to get that through Congress. And now they're coming back again. I think it's going to be very difficult for them to really kind of put one big bill out there. So as you said it's going to be the dribs and drabs. These are a lot of ideas that were discarded in 2005. Congress has changed. You know there's a new way of looking at things, but you need to keep that in mind, that these things were tried and abandoned at that time and so they're coming back. Things are little bit different now, but it's still going to be a real, it's going to be a hard job for them to get any of this done.
Ben Geman: Yeah, I completely agree. I mean there's a lot of indications that it's going to be sort of, that there's not an inclination to do this one big package. I think one area where you will see some potential for bipartisan cooperation is something that's quite popular in both parties, which is biofuels. We've already had some legislation in the Senate, bipartisan legislation introduced right out of the gate. And we're also going to see a quick hearing, I believe, it's on January 10 in the Senate Agriculture Committee, devoted to biofuels as they get ready to sort of do the farm bill. So there is going to be some focus on that issue and within that I think there's a lot of different issues in play. I mean there's talk of the outright boosting of the renewable fuel standard, but there's a lot of other issues that I think lawmakers are going to be sort of keen to address as well.
Mary O'Driscoll: Don't forget things like CAFE.
Monica Trauzzi: Yeah, what about CAFE?
Mary O'Driscoll: Don't forget things like renewable portfolio standards and that kind of thing.
Monica Trauzzi: Can we expect a change in CAFE?
Ben Geman: Well, yes and no. I mean it's very difficult to just do a straight up sort of clean increase in the mileage standards. I mean there's resistance to that by the administration and, frankly, among some Democrats as well. John Dingell is an obvious example. But, you know, there's a lot of ways to address the issue. I mean I think there is support for doing something on vehicle fuel efficiency. You know, that can sort of bring in ways to factor in proliferation of hybrid vehicles, flex fuel vehicles. Of course for hybrid vehicles as well as, you know, the administration does support raising CAFE, but sort of segmented by different sort of classes of vehicles. So somewhere within that soup, I think, that there's going to be sort of an effort to do something. But it's a notoriously difficult thing to pass and of course there's resistance in Detroit.
Mary O'Driscoll: And also you can't discount the fact that if you've got lawmakers looking at renewable portfolio standards you're going to have a lot of Republicans coming back and saying, yeah, but what about nuclear? Don't we include nuclear with that? Well, then you're going to have this fight about what's going to be included and what isn't and you're kind of back at square one.
Monica Trauzzi: And let's talk about Yucca Mountain for a moment.
Mary O'Driscoll: Speaking of nuclear.
Monica Trauzzi: Speaking of nuclear. Senator Craig has said that he plans to reintroduce Yucca Mountain legislation with Senator Pete Domenici. At the same time, incoming Senate Majority Leader Harry Reid is strongly opposed to Yucca Mountain and he's going to be controlling the floor debate on this issue.
Mary O'Driscoll: Right.
Monica Trauzzi: How is this going to play out? And is Harry Reid going to have influence in this debate?
Mary O'Driscoll: Oh, certainly, nothing is going to come to the Senate floor. They can talk about it in committee all they want. You know, a lot of people are going to be talking about the problem with nuclear waste storage. What are we going to do about disposal? But it's never going to see the light of day on the Senate floor. Harry Reid will make sure of that. To Harry Reid's way of thinking, and to a lot of people, is that there's already nuclear waste storage now. It's all been done on-site at the nuclear power plants. And so he has no problem with that. Well, the industry and a lot of other people do have a problem with that. You know Harry Reid, it's not going to get past him and for him to do or say anything different would be a huge change of policy on his part it's just not politically palatable in Nevada.
Monica Trauzzi: But several Democrats are pro-nuclear.
Mary O'Driscoll: Right.
Monica Trauzzi: Is this going to cause a battle among Democrats? Can they pressure him in a way to get this to the floor?
Mary O'Driscoll: Not when you've got people in Nevada fighting the Yucca Mountain repository. That's the one thing that, he's been on this for decades now and I really don't see any change in that at all. There's no change in attitude in Nevada, and so it's going to stay the same. But one thing, you know, he has been careful also to say that he does support the nuclear industry. He wants to see more nuclear power plants. And so the big divide is on the waste issue itself. So it's pretty much going to be a stalemate when it comes to that.
Monica Trauzzi: White House Energy Policy Coordinator, Al Hubbard, announced recently that there would be a big focus on energy independence in the upcoming State of Union speech. What is the President likely to focus on? What are you hearing? And how is this going to change Congress's overall agenda?
Darren Samuelsohn: Well, I've covered every single George Bush State of the Union speech. Every single one of them has gotten a mention on energy. Last year obviously was the most famous, I guess you could say, when he said that America's addicted to oil. But it's always usually one piece to a much broader speech. This year I think you might see Bush trying to look ahead to his legacy maybe on energy policy and get people talking about it, but ultimately I think it's probably going to be a repackaging of the ideas that we've heard from them before. There could be something new and they're not going to tell us exactly what that is until President Bush gives his speech. They're notoriously good at keeping things secret. I would say though that whatever Bush comes out with, you know, it lands at the feet of Democrats on the Hill and they're going to have their own priorities that we're talking about here and whatever Bush offers the Democrats have their say.
Mary O'Driscoll: You have to remember, this is the first time in quite a long time since we've had a Democratic Congress and a Republican President. And just to tell you how old I am, I was here the last time that that was and I was around the Hill. And I think you're going to start seeing a lot of the things they said that in those times, way back in the 80s, which is when the President, the Republican President comes out and makes a statement, the Democratic members of Congress say DOA, its dead on arrival, not going to happen. And so they're pretty much set in the direction they're going and the president is set in the direction he's going. And as we all know, these things don't ever come around and meet until the very last minute.
Ben Geman: I haven't the slightest idea what he's going to propose, to be honest, But one thing that I'm a little bit curious about, and I think this is going to have a lot to do with how Congress reacts, is it would be one thing if there was a sort of major new policy shift, akin to supporting mandatory caps on greenhouse gas.
Darren Samuelsohn: Not going to happen.
Ben Geman: Which it seems like is not going to happen, that would be one thing. On the other hand, but say he comes forth and says, look, I'm announcing a major new monetary commitment, of course tough in a tough budget climate, but a major new monetary commitment to some of the priorities they've laid out already, cellulosic ethanol and such. So I think the way that the Hill will react will depend on whether, you know, on the one hand it's a policy shift or on the other hand it's sort of just a boosting of commitments to priorities that they've already sort of established.
Mary O'Driscoll: Yeah, but then it also depends on where the money is coming from ...
Ben Geman: Right.
Mary O'Driscoll: ... for that. If you rob Peter to pay Paul you're going to run into some real problems. And with the budget climate, who knows where that money is going to come from if you can ever find it.
Monica Trauzzi: All right. We're going to have to end it on that note. Thanks for joining me.
Darren Samuelsohn: Thank you.
Mary O'Driscoll: Thank you.
Monica Trauzzi: This is OnPoint. I'm Monica Trauzzi. Thanks for watching.
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