Reporters Roundtable:

E&E Daily's Berman, Geman preview congressional action on energy

With just two months to go before the elections, will Congress successfully pass an energy package aimed at reducing high energy prices? During today's OnPoint, E&E Daily editor Dan Berman and senior reporter Ben Geman preview upcoming congressional action on offshore drilling, renewable energy tax incentives and high energy prices. They discuss potential obstacles to proposals circulating in both the House and Senate. Berman and Geman also give their take on the vice presidential picks and discuss how Alaska Gov. Sarah Palin (R) may influence the energy discussion.

Transcript

Monica Trauzzi: Welcome to the show. I'm Monica Trauzzi. With us today for a reporters roundtable are E&E Daily senior reporter Ben Geman and E&E Daily editor Dan Berman. Guys, thanks for being here today.

Ben Geman: Thanks for having us.

Dan Berman: No problem.

Monica Trauzzi: So, with the upcoming presidential campaign all of the country's focus seems to be on that, but what headlines might come out of Congress, the next two months, that sort of might pull some of the attention away from the campaigns?

Ben Geman: Well, I think some of the headlines coming out of the campaigns and some of the headlines coming out of Congress are going to be on some of the same things and mainly that's because energy is such a hot topic right now, as prices are high. They've come down, but they're definitely high by historical standards. So, as Congress gets back in this kind of shortened period before everyone goes home again to campaign, you're going to see both chambers, I think, take a run at passing more energy legislation. And whether anything ultimately comes out of it or whether it sort of is more kind of a political prop in that sense, I think remains to be seen. But we're definitely going to see those issues debated on the floor, I think, of both chambers probably before they all go home again.

Monica Trauzzi: Dan?

Dan Berman: Well, both houses have kind of a laundry list of things that they say that they want to get done. It's interesting, you ask whether it will it will draw attention from the presidential campaign, obviously, it's all intertwined. Democrats obviously don't want to give any big victories to Bush and John McCain. Likewise, Republicans have benefited, they think, from selling the Democrats as a do-nothing Congress. A few things that they want to do, Robert Byrd proposed a $24 billion economic stimulus bill. This would be the second stimulus bill this year after the bill that gave the rebates earlier this year. This has money for infrastructure programs for CFTC enforcement of oil markets for renewable energy and efficiency, federal wildfire programs, payments to western counties that a lot of even Republican lawmakers have sought. Whether they can actually get that passed without getting into a fight over oil drilling is a big question. Another thing that they absolutely have to do before they leave is the Continuing Resolution. This is the measure that would keep the federal government in business and spending money likely through the beginning of the next administration. The problem is the congressional moratorium on offshore oil drilling is contained in the Interior Appropriations Bill and has been for 20 years. So, if you're going to extend the Interior Appropriations Bill, you can have a fight over oil drilling. Now, whether Republicans would be willing to force a government shut down, even for one day or two days over this question about a moratorium where even if it's extended for six months, and Ben correct me if I'm wrong, it's not going to make that much of a difference in the long run. It would have to be really out of business for a while.

Ben Geman: Yeah, that's absolutely right. I mean let's say that in theory there is some type of lapse in the existing offshore protections. I mean it's not as if the next day we would see new drilling off the coast of North Carolina, South Carolina, the eastern Gulf, wherever. I think, as Dan points out, we're going to have this big fight over the Continuing Resolution. But the oil companies and of course the Interior Department, for its own leasing analyses and so on, it's going to have to sort of wait to see what ultimate resolution there is of this issue. And Dan mentioned one other thing that sort of jogged my memory, which is when he mentioned the CFTC funding. One thing that's going to attract a lot of attention probably around the middle of this month, a little bit off the topic, is the Commodity Futures Trading Commission is supposed to come out with a report, basically right around the middle of September, on speculation in oil markets. And depending on what they say and what they find, that could sort of set off a whole 'nother flurry of action.

Dan Berman: Yeah, and jumping back to the CR, you know, with the fight over the government, you know, possibly shutting down the government, nobody in the Bush administration, McCain, Obama, wants to have the government shut down one month before the presidential election. Even if the Republicans feel they're on the right side of the issue, they'll spend all month talking about it. They'll make threats. People like Jeb Hensarling have called October 1 Energy Independence Day. But when push comes to shove, they'll sign the CR and they can then frame Democrats as unwilling to take up the issue.

Monica Trauzzi: Okay, so Senator Reid has signaled that he'd like to move quickly on a floor vote of the "Gang of 10" energy proposal. What are the most contentious issues within that package and how do you see that debate going?

Ben Geman: Well, the most contentious things are in fact not all that far removed from the issues surrounding the CR, the Continuing Resolution, which is that the "Gang of 10" command is this bipartisan Senate proposal that would sort of expand, at least modestly, depending on your view maybe more than modestly, offshore drilling by allowing drilling in the eastern Gulf where it's currently banned, as well is off the coast of some Southeastern states. You know, more drilling offshore is a big Republican priority. On the other side it would remove some pretty big oil industry tax breaks and that would help offset the costs of a bunch of other stuff in the bill, which is extended sort of renewable energy and conservation programs. And so Reid has said he was going to go forward with this bill. You know, I don't sense, I'm still sort of reporting this out, I don't sense a huge amount of enthusiasm for this on the part of the Republican leadership because one of the big things in the bill, as I mentioned, is repeal of oil industry tax breaks, especially something called the 199 deduction, which is pretty valuable. And efforts to do that in the Senate under various forms have always fallen short over the last year, year and a half. So it's really hard to sort of say how far that bill is going to get. I suspect not super far, but it's pretty recently that Reid said he would put it out there on the floor for sure. So that's still sort of a developing story.

Monica Trauzzi: OK and across the Hill, on the House side, Speaker Pelosi has sort of a bit of a strategy planned. It's being called the "All of the Above Strategy" and what's involved there and is that going to work?

Ben Geman: Well, you know ...

Monica Trauzzi: And didn't the Republicans have something called "all of the above," too?

Ben Geman: Yeah, that's just what I was going to say. You know, for a long time the House Republicans have been saying, look, give us a straightforward, up or down vote on removing the offshore drilling restrictions. And Pelosi has basically said that she hasn't allowed that to go forward to the point where energy bills they have brought to the floor, they've brought them under these special, expedited rules that kind of prevent the Republicans from being able to offer those kinds of amendments. But that has also basically meant the bills failed because under those rules it's a higher threshold to pass it. Anyway, Pelosi shifted a little bit over the last few weeks and here's what she said. She said, "OK, you want to vote on expanding drilling? Fine, but I'm going to wrap that around, there's going to be some type of modest expansion of offshore drilling, but wrapped around that is going to be a whole bunch of stuff, the other Democratic priorities." And this is like removing oil industry subsidies, perhaps the renewable electricity standards. She sort of put that out there and the Republican reaction has been pretty tepid. No, that's an understatement. They have sort of attacked the idea. So, that bill could pass the House, it wouldn't surprise me at all, but whether something like a renewable electricity standard, for example, would get by the Senate where it's sort of faltered last year, hard to say. So there's a lot of stuff kind of kicking around. Whether it all sort of congeals into a bill that makes it across the finish line, in this climate, it would be a little bit hard to say. I mean one thing though that would be working in its favor is that if this Continuing Resolution fight starts to look sufficiently terrifying to everybody, then some type of modest OCS deal could sort of perhaps preempt that a little bit. But that's hard to predict and, like I said, I'd be a little surprise.

Monica Trauzzi: It remains to be seen, yeah. But with oil prices steadily declining in recent days, is there really that much incentive as there was say before the August recess to try to move on drilling or ways that they feel could help bring prices down?

Dan Berman: Well, that's a really interesting question because oil prices and gas prices are still markedly higher than they were last year. I mean the airlines and a lot of other industries are still definitely feeling the heat, not to mention the average gasoline buyer. But the problem is, you're right, as they've declined from the high of over four dollars during the summer, people kind of feel the impact a bit less and in their mind gas prices are going down. I mean the problem is, and Ben has kind of alluded to this, it's really a fight over who gets the credit for addressing this. The Democrats don't want to give Bush and McCain a big signing ceremony where they can say they're going to address drilling, they're going to address renewable energy, and when John McCain is in the White House they'll do even more. I mean that will be their absolutely worst nightmare. At the same time, the Democrats don't want the Republicans to be able to keep saying they haven't even allowed a vote. They haven't been able to address it. That's why they've had these kind of series of votes where they've needed two-thirds of the House to pass and knowing they wouldn't get it, they can still get a majority and say, look, the Republicans are the ones who are blocking it because we had a majority and enough to do this. So they can't say just wait till next year. So they kind of need to find a way to keep busy for the next three weeks. I mean they've managed to do it for the last two months of keeping busy, keeping on the subject, but nothing has come close to passing and I really don't think anything will. But that doesn't mean everyone isn't going to try and put their best effort forward.

Monica Trauzzi: That's very hopeful of you, Dan.

Dan Berman: It's going to be fun.

Ben Geman: Yeah, Dan's absolutely right. I mean I do think some of the pressure may have come off. I mean gasoline, you know, prices at the pump, on an average basis are almost half a buck lower than they were in mid-July. But, for example, I was talking to one lobbyist recently and this person's view was that this makes it less of an absolutely red-hot issue than it was perhaps a few weeks back, but it's still a pretty big issue. I mean people, when they're paying $3.00, $3.50, $3.60, it's still up there, but, yeah, I think the pressure may have come off a little bit. I think that's a good point.

Dan Berman: And the presidential race may affect this because if, let's say John McCain is able to win points attacking Obama on this, Democrats could say, hey, let's do some sort of bill and take the issue off the table before the election.

Monica Trauzzi: I want to shift the focus to climate really quickly, because it's getting a lot of traction on the campaign trail, but not really expected to hear a whole lot about climate in the next couple months in Congress, maybe some committee action. How important is this? How far do you think it's going to go?

Dan Berman: At this point, I mean after the Senate debate over the summer, it's really all positioning for next year. In the House, the Energy and Commerce Committee, the Democrats, are writing a greenhouse gas emissions bill. You know, they're going to kind of put that out there either this week or next week as a marker it could address. So, it's about a 60 to 80 percent reduction in greenhouse gas emissions. Everyone has ideas, I mean the industry is floating ideas, various committees are floating ideas. People are essentially waiting to see who wins and waiting to see if a President Obama pushes the EPA to write regulations that would maybe scare the industry into saying, hey, we have to work with Congress. The same may be true with the President McCain, but President McCain has introduced greenhouse gas emissions legislation before. He didn't like the bill that came out of committee last year, but it's something he'll still be very active on.

Monica Trauzzi: Alright, I need to talk to you guys about Sarah Palin for a minute, because we know what to expect sort of from Obama and McCain and Biden in terms of energy and climate. And she's sort of come in, she's from an oil state, how does she influence the storyline when it comes to energy issues?

Ben Geman: Well, she has a couple of fairly stark differences with McCain. One is that she supports drilling in the Arctic National Wildlife Refuge and McCain hasn't. So, for opponents of that, even though McCain, to some extent, has taken off the table by opposing it, it's a way for opponents of that to say, look, you elect the Republicans and that's on the table.

Monica Trauzzi: Right.

Ben Geman: And she also knows a lot about energy. I mean if you're a major political figure in Alaska, then you basically have to. And so I think she can say she's tried to sort of shepherd and has made some progress in shepherding through an Alaska natural gas pipeline. Another issue that's kind of interesting is that, unlike McCain again, she has basically downplayed or even denied the influence of humans on the temperature and on the climate. And so that's going to be an area where I think she's going to sort of be attacked, because that puts her pretty far outside the mainstream.

Dan Berman: What's also interesting, and this question really hasn't come up yet, is what kind of role will she actually have in the McCain administration? Dick Cheney, as vice president, had a major role from the beginning in 2001 on crafting the Bush administration's energy policy. He had that famous task force that environmental groups are still upset with. But so far we haven't really seen any details from the McCain campaign over what role Sarah Palin will have, whether she would be kind of the point person on energy or what influence she would have on policymaking. So at the moment, you know, she does have those policy differences with McCain, but McCain and Obama are still the top of the tickets.

Monica Trauzzi: OK, this is going to be interesting to watch. We have to end it there. We are so over time. Thanks again guys for coming in today.

Dan Berman: Thanks Monica.

Ben Geman: Sure.

Monica Trauzzi: This is OnPoint. I'm Monica Trauzzi. Thanks for watching.

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