Will President Bush's "Clear Skies" initiative be reborn as part of the energy bill? Which of the climate-change bills has the best chance? What will be the effects of the Supreme Court's decision rejecting state control of Alaska's Glacier Bay waters? And what does the ethanol debate mean for fuel prices, clean air, and greater energy independence? E&E Daily and Greenwire reporters and editors tackle these and other energy and environment issues in an OnPoint reporters roundtable.
Colin Sullivan: Welcome to OnPoint. I'm Colin Sullivan. With us today in our reporter's roundtable are Dan Berman, Darren Samuelsohn and Mary O'Driscoll, all reporters for E&E Daily and Greenwire. Thank you all for being here.
Dan Berman: Thank you.
Darren Samuelsohn: Thank you.
Mary O'Driscoll: Thank you.
Colin Sullivan: Mary, let's start off with you. Congress is back this week and we're getting right back into the energy bill negotiations. Can you give our viewers an update on where the energy bill process is in the Senate?
Mary O'Driscoll: OK, well, the Senate Energy and Natural Resources Committee has finished its work and now the ball is in the court of the Environment and Public Works Committee, which claimed jurisdiction over some significant portions of the nuclear title of the energy bill and so they'll be having a markup on that this week on Wednesday. Next week we anticipate that the Senate Finance Committee will be working on the tax package that will be capped at $11 billion over five years. So it's moving with pretty good speed and we expect that sometime during the week of June 20, they will start considering the bill on the Senate floor.
Colin Sullivan: Now there's been a lot made of this turf battle between the Energy and Natural Resources Committee and the EPW. What do you make of that turf battle and do you think that's going to be a problem for some of the provisions going forward like ethanol and nuclear?
Mary O'Driscoll: Well I don't think it will be a problem with the nuclear because if you look at the bills that they're going to be marking up on Wednesday they're very much like what was in the energy bill itself. It was like they had taken those bills and just transplanted them into the energy bill draft that Senator Domenici had. So I don't think it will be a problem there. I do think though the problem is going to be with ethanol because the Energy and Natural Resources Committee has put, the ethanol title includes the mandatory 8 million barrel market for ethanol. The Environment and Public Works Committee, in March, passed a bill that calls for a 6 million barrel market for ethanol and so there can be a problem, there's going to be a problem. Senator Inhofe, the chairman of the Environment and Public Works Committee, sent a letter to Senator Domenici, chairman of the Energy and Natural Resources Committee, saying, "If you can come up with the 8 million barrel market, this could slow down the energy bill." So they really have to get that resolved.
Colin Sullivan: So sort of a turf battle in name only?
Mary O'Driscoll: It is, but I think that it's also an issue because ethanol usually goes before the Environment and Public Works Committee, it usually has been because of the Clean Air Act implications of what they do. What the Energy and Natural Resources Committee did was take the ethanol provisions and put them all under the Department of Energy so that it becomes a part of something that goes to the energy committee itself.
Colin Sullivan: I want to come back to the tax portion of it, but first I'd like to go on to Darren and talk about Clear Skies.
Darren Samuelsohn: Right.
Colin Sullivan: There's some big rumblings now that Clear Skies may end up in the energy bill. That Joe Barton may try to do it on the House side. That someone may bring it up on the Senate side. What are you hearing? Do you have confirmation that there's going to be an attempt to put Clear Skies in energy?
Darren Samuelsohn: No confirmation yet from Senator Inhofe or Senator Voinovich, but I mean you can't really expect them to confirm that they're going to do this until the debate is actually happening on the Senate floor. I talked to Senator Inhofe's staff director today and he said, "We're not planning to do this right now, our focus has been on transportation and that kind of thing." But, this is something that's definitely, when the energy bill is on the floor and they're debating the climate titles, these climate amendments that are coming from Bingaman and McCain, there's going to be a possibility that Inhofe or Voinovich might pull out Clear Skies and that's something that a lot of industry, you know, people who are watching this are saying, there's no reason why they shouldn't be ready at that point in time.
Colin Sullivan: Wouldn't this be something of a poison pill for the entire energy bill if this happened?
Darren Samuelsohn: That's the Democrats reaction right now, that's what environmentalists are saying, is you're going to just bring the whole thing down if you try to bring up Clear Skies. But if you think back, Bush has wanted this bill by the end of this year, is his most recent statements as he's been going around talking about Clear Skies. So it ran into that 9-9 deadlock in March. This would be an opportunity where they could bypass the committee and they might have the 50 votes to actually pass this in the Senate as an amendment to the energy bill in the Senate, which sets up, as Barton is saying, if the Senate can pass something, he's willing to move something and he does have the votes, he says he has the votes to move Clear Skies. Then you get a conference and who knows what will happen.
Colin Sullivan: Well what's he going to do in the meantime? Is he going to hold a mark up? Is he going to try to move Clear Skies or is he just going to wait and get to conference and see what the Senate does?
Darren Samuelsohn: I'm getting the sense that Barton's focus is staying to energy and if the Senate actually does start to move or show any interest then Barton can move and I'm sure he can move pretty fast. It would be controversial and I'm sure Waxman, Dingell would throw up a lot of roadblocks and complain about data and all the stuff that over on the Senate side, that Senator Carper has been complaining about, and there'd be a carbon fight, but you have the carbon fight on the Senate floor, it gives Barton the opportunity to move it. But right now, no plans for a mark up.
Colin Sullivan: OK. Dan Berman I'd like to go to you. Moving off Capitol Hill for a minute, you wrote a big story this week talking about a Supreme Court decision in Alaska relevant to Glacier Bay National Park. What did the Supreme Court rule on? What did they decide? Can you just give us a summary?
Dan Berman: Well, what happened was, on Monday morning the Supreme Court decided in the case where Alaska had sued the federal government. Alaska was trying to get control of a lot of submerged lands along the coastline and especially in Glacier Bay. They cited the Alaska Statehood Act and a major 1980 law that also allows for drilling in ANWR, incidentally, but the Supreme Court, in a split decision, rejected Alaska's complaint. They sided with the U.S. saying that the federal government essentially will maintain control of these submerged areas.
Colin Sullivan: Now are there implications beyond just applying to Alaska and can you just talk about why Alaska brought the suit in the first place?
Dan Berman: Well, I'll answer the second question first. Alaska brought the suit essentially because they were upset with, in Glacier Bay, how the National Park Service was managing the area. In 1998, during the Clinton administration, the Park Service instituted a plan to phase out commercial fishing which upset the state and a lot of commercial fishers there obviously. Also they've been limiting cruise ships that have been passing through the area. There's a maximum of two per day. They usually don't reach that, usually they get one per day and the state with Governor Murkowski wants to increase tourism through that area and increase fishing in that area and since the Park Service controls the land they can't do that. So they figured, well, if the state can get control of it the state can manage it differently than the Park Service does. As for national implications, it's really too early to tell. There's probably not much national implication actually, because the case was based on a law specific to the state of Alaska and in his dissent, Justice Scalia actually noted that national parks offshore of Minnesota and offshore California have areas that are controlled by the state and not controlled by the federal government. However, the Alaska laws don't apply to those other areas.
Colin Sullivan: Darren, I'd like to turn to you. I'd like it back to the energy bill and appropriations process on Capitol Hill in a second, but staying off the Hill, there was a story that sort of flew under the radar while Congress is out of session. President Bush has a new EPA nomination that's a little bit controversial. Can you talk about what the story was --
Darren Samuelsohn: Sure.
Colin Sullivan: And why it's controversial?
Darren Samuelsohn: Well, it's that the EPA deputy administrator, so the No. 2 person at the U.S. EPA and Bush nominated Marcus Peacock, or at least he said he intends to nominate him. The paperwork hasn't yet gone up to Capitol Hill. Marcus Peacock is a senior White House office of management and budget official who's in charge of environmental spending. I think it's like $140 billion of federal spending every year for environment and energy agencies across the government. The reason he's controversial is because, among other things, he was a co-author of a memo back in 2001 that kind of laid out the groundwork for how President Bush flip-flopped on his campaign pledge to regulate carbon dioxide from power plants. And this sort of spells out the public relations strategy and also just sort of the broader strategy of how the administration would eventually go forward with their climate change policy for the next four years. It's a really interesting memo to read, it's linked to, on Greenwire, last week.
Colin Sullivan: OK. From the outside looking in, why is it important that he might, he was a signatory on this letter? Can you explain that a little bit?
Darren Samuelsohn: Well, I mean it's that he's definitely setting policy or he played a role in influencing how President Bush made a decision and it was one of the most controversial decisions, if not the most controversial decision, right there at the start of the Bush administration. It would give Democrats an opportunity to raise this issue again in his nomination hearings, if they want to. I can't imagine that they won't. This is something that Christie Whitman, after she left EPA, she cited this as one of the problems that she had or one of the things, you know, when this happened, she was over in Italy talking about President Bush's campaign pledge on CO2 and then Bush reversed it right in her face and she wrote about in her book. Other people, Paul O'Neill wrote about it in his book, so it was something that was well documented and now here you have this memo, you know, that we got our hands on, that shows that this particular EPA nominee, among other things, he was instrumental in one of the decisions.
Colin Sullivan: Now do you expect any problems in the Senate? Have you talked to anybody in the Senate that they might try to raise this?
Darren Samuelsohn: I brought the memo up originally. So I think people are still trying to get a sense and this was something that was done over the course of a week when Congress was on recess. So they're still trying to get back. The other thing about him is, as I said, he's the lead budget guy. So he's responsible for five years of EPA proposed budget cuts. How is Congress going to react to somebody like that? We'll find out. I mean you know, he's going to be going through the Environment and Public Works Committee, which is the authorizing committee for EPA. It's not the Budget Committee, or the Appropriations Committee, but there clearly will be some questions I'm sure.
Colin Sullivan: OK. Mary, if we could turn to another sort of often maligned individual in Washington, D.C., circles these days, Pat Wood, the outgoing chairman of the Federal Energy Regulatory Commission, has some sort of the negative things to say about the energy bill. Can you talk about what that is?
Mary O'Driscoll: Well, he's negative just in the sense that, it's very interesting, the LNG title of the energy bill, the LNG language, that there's a lot of debate about whether the state should more authority over siting LNG import terminals. And Pat Wood told some reporters, yesterday that, he said, if they pass that, it's really not going to have much of an effect on anything right away because essentially FERC is working on all of these projects, we expect to complete all of the LNG projects that are up by the end of the year so it won't effect them. It will effect may be the ones that come up later, the second wave, but he doesn't expect those to come up for awhile, so all of this angst over the state's ability to have any say in the citing process is really not going to play out for a couple more years.
Colin Sullivan: Are you surprised to see a FERC chairman so frank, so blunt in his assessment of an energy bill, that by all intents the administration supports?
Mary O'Driscoll: Well, yes, in a sense, but he's also been very critical. I mean he was just very nonchalant about saying that he didn't like the House language on LNG. That he thought it wouldn't work. He thought it was too complicated and really voiced some strong objections to it. You know, whether anybody on the Hill listens to him or not is unclear. He's only got about 21 days and counting left on the commission, but it's just a very interesting point. And another thing that he also said too, is that there's a lot of talk about PUCHA, the Public Utility Holding Company Act, and whether to repeal it and if you repeal it, then you give the Federal Energy Regulatory Commission more merger authority. He says, he's told people that it's fine if you take merger authority away from FERC. He says, you know, go ahead and give it to the Department of Justice. He said he was speaking for himself, not necessarily for the entire commission, but he thought that that's fine, which is a little surprising because that's actually someone saying, "I'll give up some of my turf in Washington." You don't get to hear that very often.
Colin Sullivan: Any indication on who the next chairman might be?
Mary O'Driscoll: No. We are expecting a nominee to be named sometime this month. I pointed out to Chairman Wood that the White House seems to fill other chairmanships pretty quickly, the SEC, as soon as Donaldson announced he was leaving the SEC, Chris Cox was right there named as the new chairman. Pat Wood announced he was leaving FERC, and we haven't heard a word from the White House. However, the thing is, is that we expect that there will be two nominees. The lead candidate right now is Becky Klein, from the Texas PUC, to become chairman. She's the leading candidate at this point and she would take the Republican seat, there's an open Democratic seat and that will probably go to John Wellinghoff, the former consumer advocate from the state of Nevada. He's Senate Minority Leader Harry Reid's candidate.
Colin Sullivan: So Bush is sticking with Texas mostly?
Mary O'Driscoll: It's Texas and he knows it well.
Colin Sullivan: Big surprise. Dan Berman, in keeping to our theme of staying all over the map, let's go to the Interior appropriations process.
Dan Berman: Right.
Colin Sullivan: There's a mark up in the subcommittee this week, in the Senate, going to full committee mark up. Any surprises on the Interior side of that bill?
Dan Berman: There really aren't too many surprises. It's going to look for the Interior Department and public lands part, it's really going to look a lot like last year, where the House last month zeroed out new spending for land acquisition and land conservation programs. The Senate is expected to restore some of that, if not all of the administration's request for those programs. Also, the Senate bill is likely to have the same rider that the House passed last month that would ensure that snowmobiles are allowed in Yellowstone National Park. It's a very controversial issue and several lawsuits going back to the Clinton administration. As subcommittee Chairman Burns put the rider in the omnibus bill last year, the same rider is likely going to be in the spending bill this year.
Colin Sullivan: So you expect the snowmobile language to survive?
Dan Berman: Yeah.
Colin Sullivan: Through conference? Darren, turning to you, the same bill, but funding EPA Interior and environment spending bill. Any surprises in store for EPA?
Darren Samuelsohn: Well, I think in the Senate we're going to see Conrad Burns, the Senate Appropriations Committee chairman for the subcommittee, try and increase the Clean Water State Revolving Loan Fund to what it was, current levels, this year, like $1.09 billion, which will be an increase over what the House cut it down to, of $850 million. So it will set up an interesting contrast when they go to conference on that. Other than that, we don't really have a look yet at the numbers to know. We do know that down the line, I think, we're going to see some floor amendments related to testing of pesticides on humans. Senator Boxer is talked about to be a possible candidate as an amendment on that. Trying to match it up with the House bill, other things we might see, try to see an increase in Superfund funding. Who knows where that will come from, maybe an environmental Justice amendment, but we don't know until this debate gets a little bit more --
Colin Sullivan: A lot of critics of the organizational change that made the Interior and EPA bill come under same bill said that we'd have Interior Department and EPA funds competing with each other. Are we seeing any indication is that would bear that out at this point?
Darren Samuelsohn: We absolutely did. We saw that on the House floor when they were trying to find room for amendments and offsets and it was a problem, there was a Superfund amendment, for example, where Congressman Lee Terry wanted to increase funding for EPA and he was just going to, he was actually going to offset it with something else in EPA's budget and everybody said, you know, no chance whatsoever. Let's just keep the bill as it is. So we're seeing that and I think you're seeing money being competed, at least at a staff level where they're trying to find increases here or decreases there and it's just not working out.
Colin Sullivan: OK. If we could go back to the Senate energy bill real quick, sorry to be all over the map yet again, what do you think is going to happen with climate change? There's a lot of rumors going around that there's going to be three big climate amendments when the bill comes to the Senate floor, if it comes to the Senate floor. What's your prediction on what's going to happen? How is this debate likely to unfold?
Mary O'Driscoll: Well, I think what some of the, I think particularly Bingaman supporters, Senator Bingaman who is going to offer essentially a kind of cap-and-trade program along the lines of what the National Commission on Energy Policy offered. Is that they're counting on there being a lot of opposition to the McCain Lieberman measure and they're counting on people not liking that. Seeing that his is a little more measured, his is a little less ambitious, a little more realistic to some people eyes and that they will go to his. That's what they're counting on. I know that they're meeting with some people from the industry trying to get industry support on that. They're trying to get and bring people in this week. So it's going to be an interesting process to see how that comes out and then once you start bringing in Clear Skies into the mix, I think, boy, it's anybody's guess as to how that's going to turn out when the dust finally settles.
Colin Sullivan: So it looks like there's any number of issues right now that could completely derail this bill.
Mary O'Driscoll: Oh, yes.
Colin Sullivan: You can talk about ethanol, MTBE, climate, what --
Mary O'Driscoll: You name it, well there's more. There is renewable portfolio standards, once again Senator Bingaman, it's very clear that Senator Bingaman's really trying to put his stamp on this energy bill. He's getting ready to offer a renewable portfolio standard amendment on the floor. There will also be amendments on the LNG citing. The California Democrats are not happy with the way FERC has acted, so you can bet they're going to be acting on that. There will be any number of amendments. I think there is going to be quite a bit of debate and it may not finish, they're looking to finish it up before the Fourth of July recess. I think there's a very good chance that they will not finish it before then.
Colin Sullivan: Darren, what's your take on the climate debate?
Darren Samuelsohn: I think, I mean, the climate debate clearly when it kicks back over to the House, they're not going to be interested in doing anything. So that's going to be a very interesting thing to watch, is if the Senate shows any interest in tacking something on, whether it be the National Energy Commission's language, which is definitely more aggressive than what was tried two years ago, a reporting system was what they tried two years ago. So this would definitely be more, whether or not the House bites is another question.
Mary O'Driscoll: Well, and what's going to be very interesting is when the House and the Senate get together in the conference, the chairman of the conference is Joe Barton from the House, so he will be directing everything and he will have a huge say in what gets put in what does not. So I think is going to be a long list of things that the Senate Democrats want and they're probably going to get just a few of them if they get anything. Joe Barton, you know, he can be very stubborn and he runs a pretty tight ship on these things. So everyone is looking for him to toe the line on PUCHA repeal and toeing the line on climate change, renewable portfolio standards. If they try to get CAFE standards, that's another one, the corporate average fuel economy standards, in the Senate, it's not going to fly in the House.
Colin Sullivan: Well, I've got a feeling this bill is not going away anytime soon.
Mary O'Driscoll: Full Employment Act, that's what I say.
Colin Sullivan: OK, Mary O'Driscoll, Darren Samuelsohn, Dan Berman, thank you all for being here. I hope you come back, I guess you have no choice but to come back. Join us tomorrow for another edition of OnPoint. Until then I'm Colin Sullivan for E&ETV.
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