N.D. could be the badlands for cap and trade

The fate of major climate legislation in Congress could rest with North Dakota.

The sparsely populated state in the upper Midwest, noted for its badlands and bone-chilling winters, wields as much clout as regions three times its size in the global warming debate. Its two Democratic senators possess crucial swing votes on Capitol Hill.

Sens. Byron Dorgan and Kent Conrad also sit on several of the committees that are holding court on the just-passed climate bill from the House.

"In the march to 60 [votes], losing the two North Dakotans could be what tips the balance on negative side," said Chelsea Maxwell, an analyst at the Clark Group and a former climate adviser to now-retired Sen. John Warner (R-Va.). "They have a state that is not only uniquely situated but represents what everyone seems to need on climate. You have coal and you have agriculture."

Yet gaining the support of either one is turning out to be a challenging quest for Democrats searching for the magical 60 votes in the U.S. Senate to stop a filibuster. Meanwhile, advocates for capping greenhouse gases are swinging back at the two North Dakotans in blogs and newspaper editorials.

In a just-published op-ed in the Bismarck Tribune, Dorgan says "cap-and-trade is the wrong solution and I don't support it." He expresses concerns about the potential for wild speculation on Wall Street if such a trading system is established and lays out the energy needs of his state, which contains a unique mix of coal, oil and gas reserves and wind resources.

Those comments followed a lengthy floor speech on July 16 criticizing the House legislation co-sponsored by Reps. Henry Waxman (D-Calif.) and Edward Markey (D-Mass.). He urged the Senate to take up a bill passed by the Energy and Natural Resources Committee as an alternative, since it would spur renewable energy development without the complications of a new carbon trading market.


Visions of 'unbelievable speculation'

"Do we want to sign up for a future in which we consign our ability to constrain carbon and protect this planet by creating a carbon securities market that, in my judgement, would likely subject us to the same vision of the last decade with unbelievable speculation?" he asked.

Conrad has been less strident in his remarks about cap and trade, which would set an overall ceiling on greenhouse gases and force businesses to buy and sell allowances to meet emission cuts. In an interview, he expressed similar concerns to Dorgan about the Waxman-Markey proposal, which passed the House 219-212 last month.

"I'm very concerned about speculators getting a hold of the pricing of carbon. So there's got to be serious protection against that," he said. He listed agriculture and coal as his top issues for climate legislation, considering the dominance of those two sectors in his state. The bill is not something he could vote for in its current form, he said, adding that "he has no idea" if it has a chance for passage.

In the House, the state's only congressman, Earl Pomeroy (D), joined 44 Democrats in voting against a carbon cap.

North Dakotans rely on coal for more than 90 percent of their electricity. The state is home to the United States' only large industrial carbon capture project. A plant in Beulah, N.D., gasifies lignite coal, then separates and captures the resulting carbon dioxide and pipes the gas through a 205-mile pipeline to a Saskatchewan oil field.

The state's per capita energy consumption ranks among the highest in the nation, largely because of high demand for heat during the winter and the number of energy-intensive industries.

Wind and coal are powers to be heeded

The state ranks seventh in the amount of its land in farms, according to the U.S. Department of Energy. It has some of the best wind in the country, making it a potential target for renewable developers.

The two senators are highly respected among their colleagues and are very comfortable speaking out on the Senate floor, said Manik Roy, a congressional expert at the Pew Center on Global Climate Change, a think tank.

"Oh god, they're absolutely important, " he said.

During the Senate debate last year over a cap-and-trade bill, Conrad did not vote to end debate and move to a vote. Dorgan voted no.

Political scientists in North Dakota who know the senators' careers well say that it will be tough for them to back a cap-and-trade bill. Pressure from agriculture and coal interests worried about energy costs, combined with a generally conservative population, makes the concept a tough sell.

According to recent polling data, the state's population is "divided" about climate change, according to study author Rebecca Romsdahl, an assistant professor at the University of North Dakota. She found that nearly half -- 48 percent -- "are not concerned or neutral" when asked whether they are personally worried about the issue.

Voters smell 'a hoax'

"There are a lot of people here who think the whole thing is a hoax," said Robert Wood, an assistant professor of political science at the university who has worked with Romsdahl about global warming. The negative impression of Washington, D.C., politicians, combined with strong ties to energy industries among most of the state's residents, will make it very difficult for Dorgan and Conrad, he said.

Dorgan also faces a potential re-election challenge in 2010 from current Republican Gov. John Hoeven, who testified earlier this week in Congress that the Waxman-Markey plan would have a negative impact on the economy. Hoeven is popular and one of the few GOP members who could defeat the senator, Wood said.

He added that it would be near political suicide for Dorgan to slam cap and trade so dramatically in a newspaper editorial and then backtrack via a yes vote.

"He has dug himself a hole. It seems to me he's already decided," said Wood.

A 'sit down' with the White House

Other analysts are more optimistic. Roy said it is a positive development that Dorgan is calling for some sort of cap on greenhouse gas emissions, even if he doesn't like the House bill. Similarly, Conrad expressed concern about climate change.

Roy compared the situation to the initial stages of the U.S. Climate Action Partnership, a coalition of businesses and environmental groups backing a greenhouse gas cap. Just like the Senate, many companies came into the discussions in the beginning calling for a carbon tax or other mechanisms to control emissions, and then compromised and got behind one main idea, he said.

In his editorial blasting Waxman-Markey, Dorgan said he would be willing to cap carbon if various conditions were put in place, including recycling of revenue back to "those who would otherwise increase energy costs."

Meanwhile, Senate Environment and Public Works Chairwoman Barbara Boxer (D-Calif.) has announced that she plans to beef up oversight of carbon markets, one of Dorgan's chief concerns, in the Senate version of a climate bill (E&ENews PM, July 21). Commentators like Paul Krugman of the New York Times and Joseph Romm, a senior fellow at the Center for American Progress, also wasted little time in writing opinion pieces challenging Dorgan's arguments.

"If Dorgan really supports the aim of Waxman-Markey but has problems with one aspect of the approach, well, that is precisely what the legislative process is designed to address. Perhaps someone from the White House could sit down with him," Romm said.

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