With the Senate having passed a new energy bill last week and House Speaker Nancy Pelosi (D-Calif.) set to unveil details of a House energy package this week, issues such as CAFE, RPS and CTL remain prominent. After last week's Senate decision, who made out well and who didn't? What does the Senate's legislation mean for oil companies and the automobile industry? E&E Daily reporters Ben Geman, Alex Kaplun and Darren Samuelsohn discuss the winners and losers during today's OnPoint. They also explain what lies ahead for CAFE and a renewable electricity standard. Looking ahead to the summer and fall, they discuss a timeline for climate talks and energy legislation in the House.
Monica Trauzzi: Welcome to OnPoint. I'm Monica Trauzzi. Joining me today for a reporters roundtable are E&E Daily reporters Ben Geman, Alex Kaplun, and Darren Samuelsohn. Thanks for coming on the show guys.
Alex Kaplun: Sure.
Darren Samuelsohn: Sure.
Monica Trauzzi: Ben, it's a busy time for energy legislation in both the House and the Senate. Last week the Senate was able to successfully pass an energy bill. Who were the biggest winners and biggest losers in the Senate after everything shut down?
Ben Geman: Sure, well, right off the bat folks that wanted to see the Senate keep a fairly substantial increase in automobile fuel efficiency standards in the bill, they definitely won. I'm sure Alex is going to get into some of the details of that. On some of the other things, let's see, there were folks that wanted there to be major federal loans and other types of supports for coal-to-liquid fuels. That didn't happen. Those amendments were turned aside. Environmentalists were very strongly opposing that. The coal industry really wanted it. It didn't happen. Environmentalists suffered a big loss on this bill as well that was worth noting, which is that Senator Bingaman, the head of the Energy Committee, really wanted to get a provision in the bill that would be called a renewable electricity standard, require utilities nationwide to provide certain percentages of their power from our wind, solar, geothermal, that kind of thing. You had a lot of push back on that from lawmakers from the southeast and utilities from that area who thought they would sort of penalize them. And he couldn't get the votes for his original provision and the watered down version of it didn't come up for a vote either. So those were some of the big things. And, of course, a major component of the bill was that it would basically, by an order of five, increase the renewable transportation fuel standard. So folks that like ethanol and wanted some more biofuels, they got a lot.
Monica Trauzzi: What about the oil companies? How did they make out?
Ben Geman: The oil companies actually did pretty well, but there's a little bit of an asterisk on that and here's what happened. There were some tax provisions that people wanted added to the bill that came to the Senate Finance Committee. And what that would essentially do is increase and create a lot of new tax breaks for renewable fuels, for renewable electricity, as well as for some carbon sequestration. To fund that they were going to sort of basically hit the oil companies for something on the order of $28 billion, $29 billion in either new taxes or repealing certain tax breaks. So the oil companies were very, very strongly against that. That didn't make it onto the bill. They couldn't get to the 60 votes needed for that. But the asterisk I mentioned is that they fell a couple votes short, but they're going to take another shot at it. And there's some thought that had some other senators been there, including Senator Tim Johnson, perhaps they could have succeeded. So that issue is definitely going to come back.
Monica Trauzzi: Alex, there was a lot of back-and-forth on the fuel efficiency provision of the bill, as Ben mentioned. Finally, there was a compromise reached at the end of the week. What did the Senate finally decide and what are you expecting as the debate over CAFE heads to the House?
Alex Kaplun: What the Senate finally decided was something that was actually pretty close to the original Feinstein bill, was 35 miles per gallon for passenger cars and light trucks through 2020. To get to sort of the compromise they tweaked some things kind of on the edges to get, especially, Republican senators to sign-on. They dropped a flex fuel mandate, sort of shifted it to an alternative vehicles mandate. They dropped the mandate past 2020. And that sort of really built up a lot of Senate support. They got a lot of the Republicans to sign onto the bill. I think as it reaches the House, you know, the person really to watch is House Speaker Nancy Pelosi. I think one of the interesting things that's happened is Jon Dingell has said he doesn't want to do CAFE until the fall. You know one thing that's been very notable is that Nancy Pelosi has not publicly commented on this plan. When I asked her spokesman about it he sort of said, you know, we are aware of the committee's action, but we sort of haven't made their own decision. She's going to be under pressure to move some kind of CAFE increase. People like Ed Markey have said they're going to push for a CAFE increase. And there's some speculation, I mean the speaker has a lot of power, essentially if she wanted to she could kind of even go around the committee, write her own CAFE bill and insert it either in rules or on the floor. So I think she's really kind of the person to watch to determine what happens in the house.
Monica Trauzzi: How significant is the passage of the CAFE increase? Does it signify a shift in Congress's relationship with the auto industry at all?
Alex Kaplun: I mean I think there's a couple of things here. I think one thing that's very notable is that you saw sort of, in the course of this whole debate, a lot of Republicans who even four or five years ago were sort of viewed as being very staunch against the CAFE increases coming out, in favor of it. I mean Ted Stevens is sort of a noticeable person, Larry Craig, both Tennessee Republicans, were actually cosponsor of sort of this final compromise amendment. So I think you are seeing a shift where not only Democrats, but a lot of Republicans are willing to consider a CAFE increase. I mean one of the other interesting things, sort of the rhetoric in this whole debate, it was fairly harsh, kind of from the auto industry and toward the auto industry. I mean some senators flat out said we don't believe the auto industry when they tell us that they can't do certain things on CAFE, that they sort of squandered some goodwill over the years. And I mean that's obviously going to create a tense relationship on this issue and other issues going forward.
Monica Trauzzi: So, overall, any big surprises?
Ben Geman: I was a little surprised a tax package didn't make it. As I mentioned before, I don't think we've seen the last of this effort on the Senate side, just to essentially create major new and extended tax breaks for renewable and alternative sources, and to fund that with taxes on the oil industry. That's going to come back. I was surprised it didn't make it on the first time around.
Alex Kaplun: I was a little surprised that they ultimately didn't come to any type of agreement on a renewable electricity standard because, I mean, look a 10 percent standard has passed the Senate several times. It's always gotten sidetracked in the House in the past. So to come up short on that, I wasn't entirely expecting. But very shortly after the vote on the final bill you had Senate Majority Leader Harry Reid and some others saying, look, we're going to take another swing at this.
Monica Trauzzi: All right. And Darren, the Democrats were fearful about certain climate provisions being included in the energy legislation because it would make for some major debates and possibly derail the energy package. Congress is approaching the climate issue, but through energy bills. What's the significance of that? Do they know that a major climate bill just won't pass and this is the only way to have any of that?
Darren Samuelsohn: Well, early on in the process I think what happened was you saw them going after the lower hanging fruits is what they were saying, what the Democrats were saying. And it was through a renewable portfolio standard. CAFE not that low hanging, but it was something that maybe would be a little bit easier to achieve than a cap on carbon emissions and then all the electric energy efficiency items as well. What was happening during the energy bill debate that's interesting in terms of climate change is they didn't take up a vote, but certainly watching the votes that were happening on the renewable portfolio standard, you know, that they couldn't even get that. And that was an environmental coalition there that they were trying to get through. It shows that the environmentals, if they're going to be pushing cap and trade, they're going to have to be dealing with other sides of this debate, whether it be you can talk about the labor groups, whether it be the military side of this debate. To get 60 votes in the Senate, to get a cap and trade bill through, you're going to need more than just what environmentalists are pushing. So that that sort of was hanging in the balance as we're watching the debates and how climate change didn't come out up in a cap and trade form. Harry Reid was very insistent that he didn't want cap and trade to come up. Joe Lieberman, John McCain who would be maybe the most logical people to propose an amendment, decided to hold their fire. Everyone is sort of holding their fire. And ultimately what that means down the line is going to be a good question.
Monica Trauzzi: All right, so we've seen a shift from climate talks to energy talks back to climate talks now. If you had to forecast a timeline for progress on an emissions bill, what are you hearing might happen this year?
Darren Samuelsohn: I think you're going to see, in the House, in the Energy and Commerce Committee, they'll start marking something up or at least getting into the meat of legislative hearings in September. Rick Boucher says he wants to mark up a bill in September. John Dingell had said September. Nancy Pelosi hinted that she would like to see on the floor in September -- I mean what you're dealing with is they've punted the CAFE issue and they punted coal-to-liquids to September, is John Dingell is thinking about a bigger energy package that would incorporate climate change. Now he has said cap and trade. He said carbon tax. Rick Boucher has said mandatory carbon program, but he said that he likes the idea of a cap and trade. He's kind of shot down carbon tax as an idea. I don't know that the Democrats really have a complete strategy in mind yet for what they're really going to do in the fall. I don't know that they really did when this all started in January. But you kind of are looking at basically two different kinds of conferences possibly setting up. One an energy conference, based on what they passed in the Senate. And then another conference that would come, cap and trade related possibly or some other climate provision. Again, will it be what Barbara Boxer and what Ed Markey want, whether it be 80 percent cuts by 2050? I think they're probably thinking right now about the next presidential election and will there be a President Clinton or President Obama in the White House who could propose something that would be a little bit more to their liking, as opposed to President Bush signing something.
Monica Trauzzi: And you've written about a Boxer-Bingaman showdown. Talk about what's happening there.
Darren Samuelsohn: That's an interesting topic. Not a lot of people want to talk on the record about that, so I would love for someone to come out and start to -- I think if that's going to happen it's going to come from the environmental groups, who are, I would say, very paranoid right now that Jeff Bingaman will take this issue away from Barbara Boxer and mark up a bill through his committee or write his bill I should say. Have it parliamentary sent to his committee where he can mark it up. The environmentalists don't like the Bingaman bill because they don't think it's strong enough. They don't like the safety valves. They don't think it goes out far enough over the course of the next century. So they're worried that Harry Reid would see Jeff Bingaman offering a bill that could get 45, 50, 60 votes, more than what some of the more left proposals are out there. And he might try and grab it, conference it with a bill that John Dingell can move through and that President Bush might sign and the environmentalists will realize they've lost this issue, or at least not gotten what they wanted. So that's where the rub is on this. And Barbara Boxer, I think, will assert her jurisdiction. And Jeff Bingaman right now is saying that he hasn't made a decision about this. So there's a lot of paranoia right now, but not really a lot of substantial details yet about this.
Monica Trauzzi: And what are you guys expecting this week in the House relating to energy?
Alex Kaplun: I think the big thing is the House energy committee is having their mark up, but their energy bill is going to kind of be the centerpiece of the summer package. I mean the thing to watch in that bill really is not sort of what's in the language now, but what people are going to try and do to it. There's probably going to be pressure from - Republicans are going to try with things like coal-to-liquids and, again, the CAFE issue. I mean Ed Markey, who's on the committee, has said he wants to get a CAFE increase. It's sort of unclear if he's going to try to do it in committee or wait until the floor. You know, I think the background of all that is kind of in the House, to keep watching sort of how things shape up between Pelosi and Dingell. I mean, again, I think with the Senate passing an energy bill there's going to be kind of increasing pressure on the House to at least kind of take up some of the things that are in the Senate bill, to look a CAFE, look at alternative fuels mandate, look at various other things. And that's going to really shape up as a power play between those two because they seem to have very different agendas.
Ben Geman: And I think one thing I would add to that is I'm not sure whether this would happen when the Energy and Commerce Committee takes up this bill, it perhaps might happen when the bill moves on to the House floor at some point next month most likely. At some point we're going to have a real effort in the House to add a renewable electricity standard. Several lawmakers have already proposed legislation that would do something that was even more aggressive than what the Senate tried and failed to do. The House proposal, which comes from lawmakers, including Tom Udall and some others, would create a 20 percent standard by 2020. That could surface in committee. I think another perhaps somewhat stronger possibility is that we'll see a floor effort to do that.
Darren Samuelsohn: And I would also add I think that you might see the CAFE-climate debate start to merge together in terms of conference negotiations. And you might see some behind the scenes dealing between John Dingell and other members if he wants to - if he's going to support cap and trade, he's going to try and get something out of people in terms of supporting CAFE. So it could fuse together into one big conference, a climate-energy conference that might not actually happen until next year, you know, right before President Bush is ready to leave office.
Monica Trauzzi: All right. Well, it will be an interesting summer for our issues. Thanks for coming on the show.
Darren Samuelsohn: Thanks.
Ben Geman: Sure.
Monica Trauzzi: This is OnPoint. I'm Monica Trauzzi. Thanks for watching.
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