Reporters Roundtable:

Insider analysis of budget, energy markets, endangered species, ANWR and more ...

Who are the winners and losers so far in Congress' appropriations process? What's a hot summer mean for energy markets? How will the discovery of the ivory-billed woodpecker affect the endangered species debate? Greenwire and E&E Daily reporters and editors discuss these issues plus the energy bill, ANWR and much more in an OnPoint reporters roundtable.

Transcript

Colin Sullivan: Welcome to OnPoint. I'm Colin Sullivan. Our guests for today's reporter's roundtable are Dan Berman, Darren Samuelsohn and Mary O'Driscoll, all reporters with E&E Daily and Greenwire. Thank you all for being here. Congress is back this week, the Senate and the House are back in, the Senate was out last week. A lot happened off the Hill last week. Dan Berman, I'd like to start with you and the roadless rule. The Bush administration came out with its new interpretation of the roadless rule. Can you explain for our viewers what that is and why it's so controversial?

Dan Berman: Well, it's not so much a reinterpretation as it is a repeal. In January 2001, just before he left office, the Clinton administration finished their rule called the Roadless Area Conservation Rule, that set aside about 58,000,000 acres of national forest lands as roadless, no logging, no road building, no oil and gas developments, no invasive activity like that. Obviously, the Western industry folks they don't like it, Western Republicans they don't like it, the Bush administration didn't like it and after five years of fighting in the courts they came out with a new rule that essentially gets rid of the old, the Clinton plan and allows governors to appeal to the Forest Service to see if they want roadless acres in their state.

Colin Sullivan: So a lot of critics say this is just an excuse for the Bush administration to allow special interests to log national forests as much as they like. Is that true or is this just a logging reinterpretation of the roadless act?

Dan Berman: Yes and no. It really depends on where it is. By giving the governors the ability to appeal for our protection, essentially the Bush administration is saying, well, the local communities and the governors and the states, they can decide what level of activity they want on their lands. If in Idaho, for example, they want to get into some of the national forests and some of the state lands surrounded by acres that are currently roadless they can now try to do that. Whereas, let's say in New Mexico or California, if they want to preserve acres as roadless they can do that as well.

Colin Sullivan: So how likely are we to see a challenge in court or on Capitol Hill, either way?

Dan Berman: Oh, well, it's forest policy, you're guaranteed to see several challenges in court. The original Clinton rule had nearly double digits in court challenges. For every judge who upheld the Clinton rule there is a judge who wanted to get rid of it. In Congress you'll see congressional Democrats, Jay Inslee has already mentioned that he'll try to do something on it, but the chances of getting something out on the roadless rule, out of the house especially, are slim.

Colin Sullivan: OK. Mary O'Driscoll, turning to you. Also late last week federal agency regulators released their assessment for the upcoming summer. Are we likely to see rolling blackouts again in California this summer?

Mary O'Driscoll: Well, they're hoping not. What this is, is it's a similar assessment that they do for the entire country and they singled out Southern California as an area of real concern because they import so much electricity into California there's tremendous economic growth in California and they don't have enough generation there. They also have a lot of bottlenecks in the transmission and so there's really a lot of concern about whether there's going to be price spikes. They're looking at probably some outages, some emergencies that they call in the state. If it's a hot summer, they're going to have some problems in Southern California.

Colin Sullivan: Now it is largely dictated by whether, but what's the problem specifically in Southern California? Why is Southern California more vulnerable than other parts of the country?

Mary O'Driscoll: Well, because they have, the way that the market operates there, there are some market structure problems and then also the fact that they haven't really built a lot of generation in California over the past several years, particularly in Southern California. They've built, any generation they've built is mostly centered in Northern California and so that means they have to import it into Southern California through the transmission system and they've got a lot of a lot of transmission problems, market design problems, bottlenecks and that kind of thing that they're still trying to work out, so it's a problem. They've been importing a lot of electricity from the desert Southwest and they import a lot of electricity from the Pacific Northwest, but it's supposed to be, apparently according to NOAA, it's supposed to be a very hot summer in the West and so the desert Southwest may need its electric supplies for its own consumers and the Pacific Northwest is in the middle of a six year drought right now. Their water levels, in the rivers in Washington and Oregon, are down considerably, so about 66 percent of levels right now.

Colin Sullivan: Is the Federal Energy Regulatory Commission essentially saying that California is in no better position than it was in 2001, the last time we saw a power crisis?

Mary O'Driscoll: Well, it's interesting, well I don't think they'd go that far, but the California market people, market officials, are talking about implementing the same things that they implemented back then. You know, that if you reduce your electricity use by 20 percent you get a 20 percent credit on your bill. They're starting to recycle a lot of these things that they used back then to be able to avert even worse problems than they encountered at the time. So we'll probably see some emergencies, some electrical emergencies, in California this summer.

Colin Sullivan: Dan Berman, turning to you. Last week we saw a lot of reaction to the recovery of the ivory-billed woodpecker. Can you talk about what happened last week and what's likely to happen going forward with environmentalists trying to get the federal government to do something to make sure that this woodpecker sticks around?

Dan Berman: Well first, let's not get ahead ourselves; it's not anywhere near recovered. What happened was after 60 years of really not being seen the ivory-billed woodpecker was found in the woods in Arkansas and Gale Norton announced it with great fanfare. They had scientists, they've had done research for over a year, they actually had video of the bird. So now the real question is how do, now that they've found this bird they can't, you know, let it go extinct again. So, what's happening is now environmental groups are starting to use the protections in the Endangered Species Act to petition, first they started with the Army Corps of Engineers, an irrigation project in Arkansas, saying, "Well, now you have to go study for any potential impacts on the ivory-billed woodpecker." Obviously, before last week, they didn't know that the ivory-billed woodpecker was out there, so they didn't study for it, but now the environmental groups are afraid that any new projects will have a harmful impact.

Colin Sullivan: But what's the response been from the Army Corps?

Dan Berman: So far there has been none. The environmentalists, last week, filed a petition. It's a $300 million project so they're looking at it.

Colin Sullivan: Well what do you think about the implications for, they're trying to reform the Endangered Species Act on the Hill, especially in the House Resources Committee. Is the resurgence of this woodpecker likely to overshadow that debate in some way or likely to affect it?

Dan Berman: I think it's definitely going to shine a light on the debate because this is one of the most exciting things for the environmental and conservation community in a long time. There were several comments from reporters at the press conference, a couple weeks ago when they announced this thing, that there was finally good news out of the Bush administration, you know, for the environmentalists, for the first time in awhile. So it's gathered a lot of people paying attention that wouldn't have paid attention to Endangered Species Act reform before and now all the sudden Congressman Pombo and others in the House Resources Committee might have to be a little more careful with what they're doing.

Colin Sullivan: Darren, turning to you, I'd like to bring you into the conversation.

Darren Samuelsohn: Sure, love to come in.

Colin Sullivan: It was a relatively light week on Capitol Hill last week with the Senate out, but the House was in and House appropriators started moving on their appropriation bills. One of the first bills they've already marked up, in subcommittee anyway, is the Interior bill which now funds the U.S. EPA. Can you talk about what that bill has done? There's some cuts to the EPA and where are they?

Darren Samuelsohn: Sure. U.S. EPA now would be getting, under the House bill, $7.71 billion. The president proposed $7.52 billion, so it's a slight increase over what President Bush proposed, but it is a cut from what the Congress proposed, I'm sorry what Congress enacted in 2005, which was $8.02 billion, so it's about a $320 million cut overall. The full appropriations committee is supposed to mark that bill up, I think, tomorrow.

Colin Sullivan: OK and what are these cuts exactly? Where did you see the most significant cuts?

Darren Samuelsohn: The biggest cut right now goes to the Clean Water State Revolving Loan Fund, which is the largest program in the U.S. EPA's budget, I guess, it's one of the largest programs within the U.S. EPA budget. That's grant money the goes out the states, I'm sorry, loan money that goes out to states for wastewater projects. There's a huge gap in terms of the amount of money the federal government provides for states as they try to improve their wastewater infrastructure in cities and counties and towns across the country. So the cut to the Clean Water SRF, it goes down to about $850 million is what the House bill called for. Last year was just over $1 billion. Democrats are complaining because this thing used to be at $1.25 billion, so it's been dropping steadily from year to year. It's now down about $490 million from two years ago.

Colin Sullivan: Is this going to be a big fight when we go to conference? Is the Senate likely to restore these funds?

Darren Samuelsohn: That's the thing, every year administrations have proposed cutting this program and in Congress, because it's so popular with every local district, it gets restored. Last year was the first time when Congress didn't restore it after the administration proposed the cuts. So it'll be interesting to see this year, in these tight fiscal times where they're always talking about post 9/11 with money going toward defense and homeland security. Will there be money for the Clean Water State Revolving Loan Fund and for EPA as a whole? We're going to find out and I mean senators have traditionally tried to go above what the House has done. We'll find out what happens later on.

Colin Sullivan: Dan Berman, you cover the Interior Department. You cover the appropriations process for Interior, which is included in the same bill now as EPA. There's some cuts to Interior also. What are the cuts specifically?

Dan Berman: Well, for the record, EPA is included in the Interior now. With the Interior bill, for the second year in a row the subcommittee, under Congressman Charles Taylor of North Carolina, decided to completely zero out any new funds for land acquisition and conservation under the federal water conservation fund. Again, they tried to do it last year, the Senate restored a lot of the money, not as much as the administration had asked for or conservationists wanted. So that's going to have to be the same game this year, but the problem is, for the conservation community, the administration already chopped off $90 million off of their request. So the Senate is unlikely to add back all of the money that they had wanted. So by doing this every year, even though the Senate continues to add back money over the House version, the overall allocation goes down.

Colin Sullivan: Now I'm sort of wondering here, when the Interior and the EPA bills were combined, a lot of environmentalists said, "We're concerned here that Interior will have to compete with the EPA and will have to compete with other environmental programs." Do you think that we're seeing that? I'll just throw this out to the whole table, do you think Interior is going to have to compete with the EPA? Darren?

Darren Samuelsohn: Well, it's a $26.2 billion bill that the agencies underneath the Interior and the environment bill now are dealing with. So it's EPA, which gets about $8 billion per year, it's Interior and it's the Forest Service. You are definitely seeing, in terms of these offsets, if they want to increase the Clean Water State Revolving Loan Fund they've got to find a cut somewhere else in that bill. Previously they would find the cut in something like NASA, which was in the old EPA spending bill or it could come out of like housing, a whole bunch of things that were available. Now it's they've got to find a cut somewhere, it could be at EPA or it could be at the Interior Department of the Forest Service. I know, Dan, you don't represent the Forest Service, but looking over at you, the thing that could be cut, that could come out of your bill.

Dan Berman: Right and the Forest Service had over a $400 million cut in this bill. The Bush administration request was down as well, but if there's a bad wildfire season they have to find money to pay for fighting wildfires. There are going to be a lot of conflicts and I think we may see some of the ideological influences of the Interior subcommittee affecting what actually happens at EPA for the first time.

Darren Samuelsohn: It'll be interesting to watch and see. I mean, do they decide wildfires are more important than wastewater funding? Those kinds of debates are going to be probably had as this is going forward.

Colin Sullivan: Mary, let's turn really quick to the appropriations bill. You covered the energy and water bill. What do you think the big fight this year is going to be in the energy and water bill? DOE is not likely to be cut in the way that EPA or Interior are being cut.

Mary O'Driscoll: Right.

Colin Sullivan: What are you going to be looking for when you track the energy and water bill this year?

Mary O'Driscoll: What they proposed in the, what the White House proposed were some cuts in some oil and gas research and development, hydro research and development and that kind of thing. I think you'll see some token fighting for that, but I think that pretty much those cuts will remain intact. Largely because the oil and gas industry has been doing so well, profits are just astronomical, prices are high and so they seem to be doing very well. I think you'll see some opposition, because mostly those cuts affect the very small real independent little guys who need help in doing their exploration and production. But in the larger scheme of things, I think you're going to see the traditional fight over funding for Yucca Mountain. That's not going to end anytime soon, that project, you know, I know even with the setbacks that DOE has experienced over the past several months with the project, with the falsification and that kind of thing, that they're still going to be pushing very hard for that, pushing very hard to get that license application into the Nuclear Regulatory Commission and they'll be pushing very hard to be able to get, to start the transportation program and all of that. So they really need to keep all that funding on track. The nuclear industry is really getting, rallying people around for this. They're getting groups from all walks of life to try, you know, to get their support for the Yucca Mountain project. There's also an effort under way to do the full funding of it. To, you know, tweak the budget process so that they can use more of the Yucca Mountain, the nuclear waste trust fund that will go to it. This is the trust fund that consumers pay into; that they pay an extra surcharge on their bills to the utility and that goes right into this trust fund. It's a multibillion-dollar trust fund that really hasn't been tapped because of the budget and appropriations restrictions on it.

Colin Sullivan: Another budget issue that you're tracking is actually a policy issue, is whether or not to drill in the Arctic National Wildlife Refuge. Now the budget resolution passed Congress before the Senate went out of session prior to last week. Although the was a little bit of controversy over whether or not ANWR drilling actually made it into the budget resolution. What's your take on that? Is ANWR in the budget resolution?

Mary O'Driscoll: Well, I guess, technically yes, but technically now, but that's really kind of beside the point because what they're really trying to do is that they're going to do the ANWR drilling, they want to do it in the budget reconciliation, which will come up in September. They were trying to do that through the budget and it's not necessarily has to be explicitly stated in there and it is not and some people are making some big hay out of that. But the thing is, is that where the real rubber is going to hit the road is in the reconciliation process, when they take that up in September.

Colin Sullivan: So when is that going to happen and are we likely to see any difference? We had an environmentalist on our show last week, Bill Meadows from the Wilderness Society, who said, "This fight's not over. We can still pick off a couple of votes in the Senate." How likely do you think that is and when is that going to play out?

Mary O'Driscoll: Well it will play out over the summer and, as we all know, four months is a lifetime in politics, especially in Washington. Things can change in the course of four months. So between now and then you know the environmentalists are going to be working very hard against it. This is their bread and butter issue and a loss, a real final loss. They've suffered a couple of losses in this so far, but a real final loss that actually allows for opening up ANWR and produces the money that allows the committees to authorize it, is going to be huge blow to them. So they are going to fight that with everything they've got. Now they, you know, passing the budget, it was a party line vote in both the House and the Senate and there is a chance that they might be able to pick some off, but it's questionable. But I think that whole picture will kind of start developing as the summer wears on, as we get closer to September.

Colin Sullivan: Darren, sticking to the budget resolution, there were some other language in there that wasn't noticed that would affect how the president is able look at federal agencies and how they're conducted and whether or not, some people have said that this language might enable the president to eliminate federal agencies if they're involved in wasteful spending. Can you talk about that provision and what it is?

Darren Samuelsohn: Sure. They're called the sunset and they're called the result commissions, so the sunset commission and the result commission, and these are things that have been kicked around on Capitol Hill for a long time, for about eight or 10 years. What it will ultimately, some people think do, is call for the elimination of the U.S. EPA or at least allow Congress the ability to vote on the elimination of government agencies, EPA, maybe programs in EPA, maybe programs in the energy department, the Army Corps of Engineers, things where this commission, that would be created by Congress or the president, that they could look and look for waste, fraud and abuse or things where they're not producing results. Because part of this whole good government, eliminate waste sort of movement and the president proposed these ideas in his budget resolution that was offered in February, I'm sorry, in the budget proposal offered in February, and the Congress actually did include a sense of the Senate in the budget resolution, kind of buried toward the end, and it called on the creation of, it called for the creation of one of these. Now to actually have it happen you're going to need a bill to be signed into law and the president's White House office and management budget is working on a bill and they're having congressmen and senators, Senator Brownback in the Senate, in the House it's Congressman Brady from Texas and Tiahrt from Kansas, who have also been cosponsors of bills in the past who are working on bills again this year. So we might see, we're probably going to see some bills introduced. We're going to see hearings probably, if, you know, if they really want to try and do this in the House Government Reform committee and Senate Governmental Affairs Committee and then go from there.

Colin Sullivan: So what kind of teeth doesn't have though? I mean, does the sense of the Senate that's in the budget resolution, which is nonbinding --

Darren Samuelsohn: Right.

Colin Sullivan: Does this have any teeth and how is it likely to affect this process?

Darren Samuelsohn: It adds momentum to the process. The budget resolution, in a sense of the Senate, has no teeth, but it does add momentum. This is something that, like I said, has been talked about for eight years, but now you've got these congressmen and these senators, a whole bunch of them who've been trying to get this done and now you have the president who called for it, now it's included in the budget resolution. If they actually now will go forward and try and move this bill, it very well could help their process, help is movement along.

Colin Sullivan: Mary O'Driscoll, we're just about out of time, just really quick, what's going on with the energy bill? What are we likely to see this week?

Mary O'Driscoll: I was wondering when we were going to get around to that. The energy bill, the ball's in the Senate's court. We expect to see something probably by the end of this week from the Senate Energy and Natural Resources Committee. Some people are thinking that there will be a quick mark up next week followed by some sort of a mark up by the Senate Finance Committee. The budget resolution, what I also didn't mention, was that it allows for $11 billion to be included in the tax provisions. So the energy bill can go up to about $11 billion, which is considerably higher than the $6.7 billion that the White House called for and the $8 billion that was in the draft or in the House bill that was passed a few weeks ago.

Colin Sullivan: Which isn't very surprising, but are we likely to see the president veto an energy bill over tax provisions or is that just not going to happen?

Mary O'Driscoll: I think he wants an energy bill so bad that he'll take anything at this point.

Colin Sullivan: He'll take the $11 million. OK, Mary O'Driscoll, Darren Samuelsohn, Dan Berman thank you all for being here. Join us tomorrow for another edition of OnPoint. Until that I'm Colin Sullivan for E&ETV.

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