Reporters Roundtable

Climate change and the energy bill, EPA appropriations -- and the nuclear option

The Senate is putting together its comprehensive energy bill. Will it include climate change measures? What about nuclear power and clean coal? Can EPA get more money in its final appropriation? Greenwire and E&E Daily reporters and editors discuss these issues, what the "nuclear option" may mean for pending legislation, and more.


Colin Sullivan: Welcome to OnPoint. I'm Colin Sullivan. Today we're having a reporter's roundtable on climate change, the energy bill and the appropriations process and lots of other things going on on Capitol Hill. With us today are Mary O'Driscoll, Brian Stempeck, and Darren Samuelsohn, all senior reporters for E&E Daily and Greenwire. Thank you all for being here.

Darren Samuelsohn: Thank you.

Brian Stempeck: No problem.

Colin Sullivan: Brian let's start with you. What's the latest on climate change? John McCain caused quite a stir this week saying he was going to add some nuclear provisions into his climate bill. What's going on? What's he trying to do here?

Brian Stempeck: I spoke to Senator McCain yesterday about this. He did confirm that they're working on some nuclear provisions to include looking at things like loan guarantees, production tax credits, various financial incentives. He said they're going to be wrapping up talks on those in the next day or two. They are going to include them in the McCain-Lieberman Climate Change Bill, which is a cap-and-trade bill. He also said he was going to offer that as an amendment to the energy bill when the energy bill goes to the Senate floor.

Colin Sullivan: Now is this is a surprise? Are environmentalists caught completely off guard by this and they are completely opposed to it?

Brian Stempeck: No, there are some environmental groups who have come out and said we realize that in order to get the kind of giant emissions reductions that you're talking about with carbon dioxide nuclear is really something you have to look at. Wind power, solar power, energy efficiency really aren't enough to get you where you want to go. So you have a split developing in the environmental community by people who will say it's time to look at nuclear again and some of those are less willing to do so.

Colin Sullivan: But this really is a political decision. Isn't McCain just trying to win a couple more votes to try to get his climate bill through?

Brian Stempeck: Basically that's the case. I mean he got 43 votes for the McCain-Lieberman bill in 2003. Since then on Election Day he lost about four of those votes, on Election Day 2004, and so now he's about 21 votes short of getting the 60 votes to do that. So he's got to be looking for ways to get this and this is a good way to get some conservatives, some Republicans to say this is something we'd consider.

Colin Sullivan: Now Mary, you're covering the energy bill markup all week. McCain has said he'd like to include his climate bill when they go to the Senate floor. What's the prospect for climate of getting into the bill and do you think that will happen?

Mary O'Driscoll: Well the only way it's ever going to get in the bill is if the Senate puts it in because the House certainly isn't going to do anything on that front. One thing I did want to add about what McCain is looking at doing is it's very interesting that the nuclear items that he's talking about are really nothing more than what Senator Pete Domenici, the chairman of the Energy and Natural Resources Committee has been talking about putting in the energy bill too. So it's very interesting to see that these are kind of the same things that the Energy Committee would be considering in the nuclear title anyway. Although we don't know what's in the nuclear title they're more than likely to get in there that Senator Domenici has really been pushing these separate items for many years and so it's interesting, I don't know if this is some way to try to solidify more support in doing it on the McCain-Lieberman and trying to do it on the floor or what. But it's a very interesting process nonetheless. And another thing, another point you made too about this kind of dividing the environmentalists. It's interesting, you know, once again, 15 years ago the nuclear industry was trying to do this. They were trying to sell nuclear power as an environmental alternative and this did divide the environmentalists, about 15 years ago that this happened. It was an early way of trying to do it and trying to start to get nuclear to be more accepted. It didn't work then, not very far at that point, but the debate has advanced quite, much further now than it did 15 years ago. It's going to be a very interesting process to watch.

Colin Sullivan: Now you mentioned that part of the strategy here is to tie nuclear with climate and that's already been done in the Senate. How is that likely to fly in the House? You did mention the House briefly --

Mary O'Driscoll: Yeah.

Colin Sullivan: Is the House going to consider carbons caps on any level whatsoever?

Mary O'Driscoll: I think it's unlikely. It all depends on what happens. Senator Bingaman, the ranking Democrat on the Energy and Natural Resources Committee, is looking at offering his own amendment on climate change, which is a cap-and-trade program that is more moderate I guess than what McCain and Lieberman have. So there's hope that McCain and Lieberman probably, may not get through because it hasn't gotten the votes through before and so that Bingaman, especially if he's able to get a Republican to cosponsor it with him, that he would be able to come in with this one that's from the National Commission on Energy Policy, that he would be able to come in with this and get this through in the Senate. But where that goes in a House-Senate conference is very difficult to tell. I haven't seen Joe Barton in, the chairman of the House Energy and Commerce Committee, in a conference process before, but people I've talked to have said he's very stubborn. And the House is going to be running the energy conference this year and so it's going to be very difficult, it's going to be very difficult at best to see how they're going to get climate change in.

Colin Sullivan: Darren to bring you into the conversation, she mentioned the House-Senate energy conference, but in all likelihood we might not even get there this year because of this big meltdown that's about to occur in the Senate. What's going to happen there? Is that going to stop the energy bill altogether? Is this just an academic discussion at this point?

Darren Samuelsohn: Well, it's the other nuclear thing that's going on right now, is this potential nuclear option that Senator Frist and Senator Reid seem to be taking the Senate toward. The moderates right now, I think Senator Nelson from Nebraska, Lieberman from Connecticut, Trent Lott, I don't know if you'd call him a moderate but he's certainly one of the people trying to orchestrate some way to get out of what could eventually be a meltdown of the entire Senate process. And I think the House, I've heard, you know in a show of solidarity, is talking about going along with the Senate, the House Democrats going along with the Senate Democrats in trying to just slow things down. I mean with the Senate you do need, you know, one senator, you need unanimous consent to move so many things through. I mean if Senator Reid is so upset with the way that the judicial nomination vote thing that goes, he could bring everything to a halt and the energy bill that is moving through committee might never get a chance to come onto the floor. And we would see that with a lot of other things that are moving through committee in the Senate, you know, would they have a chance of even getting the floor, if nothing's coming up on the floor. Then we might be sitting back on our, you know, on our seats and enjoying a couple of months without much work to do.

Colin Sullivan: Does this also mean that Clear Skies is completely off the table? I mean if you're going to try to move climate within the energy bill and there's been talk about trying to move Clear Skies within the energy bill, but if you're going to deal with some sort of carbon cap-and-trade scenario there, does that mean Clear Skies is gone out of the picture?

Darren Samuelsohn: This was a theory. I mean I was, I guess, maybe bouncing around in my own head in the last couple of days, wondering if all the things that we're hearing about with this carbon title trying to move things that Lieberman and McCain are talking about, does that not free up Senator Inhofe to try and move Clear Skies after the CO2 debate has happened? That's something that Inhofe was saying when Clear Skies was in committee, was let's give the supporters of CO2 caps their vote, their debate, when they see that it loses then we'll bring in, push Clear Skies through. Remember there's a bunch of other things that are controversial about Clear Skies though. There's a lot of changes to the Clean Air Act that we're talking about here that Democrats and people who are in support of the 1990 Clean Air Act amendments and want to keep that going, aren't going to just let it go through just based on allowing a CO2 vote.

Colin Sullivan: Brian moving back to you, you've been writing a series of stories lately for Greenwire, talking about how the private sector is moving towards doing something about climate change on its own. So why do we need a climate change bill at all if companies like GE and Exelon are starting to take their own initiative and do something about global warming?

Brian Stempeck: The real problem is that you have these companies coming out and saying they're going to do something on climate change. GE is pledging a certain reduction in its greenhouse gas emissions and other companies have done that as well, but it's nowhere near the kind of thing you need to, say, meet what the Kyoto Protocol requires or any kind of other national reduction type plan. Emissions are going to basically continue to grow. You have plenty of companies who aren't doing anything on climate and then even some of the companies who are reducing, well, they're doing a thing that says we're going to reduce, say, a percentage of emissions per unit of sales. So their actual emissions are going up, but they're claiming kind of PR credit for what they're doing on climate change. It's not really making much of a difference.

Colin Sullivan: So there's still need, mandatory carbon cap to get them to take real action essentially?

Brian Stempeck: Yeah, if you want to get serious on this thing, I mean, you have the McCain-Lieberman plan which is basically like a cap-and-trade type effort, it's pretty strict and then you have something like what Bingaman is talking about, the National Commission on the Energy Policy, which is basically a more moderate cap-and-trade plan. It would kind of slow emissions throughout 2010, 2015, eventually get to the point where you reduce, but try to do it with less of a cost to the economy, which is why that plan is somewhat popular.

Colin Sullivan: One more thing, what about the Hagel bill? What would the Hagel bill do? What's the difference there?

Brian Stempeck: Senator Hagel's going to have a hearing on one of his, he has three bills in total, basically looking at more technology, working with developing countries, getting some clean coal type technology into China. The problem is it's really not that much different from what the White House is already doing, it's just kind of codifying what we already have in place. The administration is very pro technology, spending billions of dollars on research and development and science and Hagel's bill has really just taken that same approach.

Colin Sullivan: Mary let's turn to the rest of the energy bill. There's a lot going on this week. You're covering a big markup process in the Senate Energy Committee. Can you talk about, I know that the first three easy titles have already passed, can you talk about what the most contentious issues are going to be going forward? First of all, to get out of committee and then to get out of the Senate.

Mary O'Driscoll: Right. Well, they've got some contentious issues coming up. They've got this week the electricity title, which is going to be very contentious. Then next week they'll have the oil and gas title which it contains a lot of possibilities for debate, I guess, with offshore drilling, LNG, facility citing, things like that. And then of course the nuclear title, we're not quite sure what's going to be in that yet and so there's a lot of opportunity for some interesting debates. Senator Domenici was telling reporters this week that there will be some interesting debates. There could be some surprising debates going on. There should be some interesting things too in the renewables section where there's probably going to be a fight over the renewable portfolio standard. Democrats and some of their allies are saying, particularly, I think it was Ken Salazar, Senator Salazar from Colorado, was saying that he has quite a few votes, over 60 votes to support a 10 percent renewable portfolio standard by 2020. The thing that's very interesting now is that Senator Alexander is coming out and saying, you know, if you have a renewable portfolio standard for the nation plus the extension of the production tax credit for renewable energy, it's a little extravagant. That was the word that I heard that they were calling it, extravagant and then I think he's starting to get some support among Republicans, that they may not go for the renewable portfolio standards. So there's going to be a fight for that because that's an important issue for Salazar, for Senator Bingaman and for many other Democrats on the committee.

Colin Sullivan: Now we're likely to see that fight in committee, but a lot of these fights are going to be withheld over to the Senate floor.

Mary O'Driscoll: Yeah, that fight will likely come in the committee. Another fight that will come in the committee, that we thought was going to be brought on the floor probably in conference, is in electricity, but Senator Domenici is saying now that he'll probably try to bring it up in committee and it's the repeal of the Public Utility Holding Company Act, which governs utility holding company operations. And there's a fight between whether they should allow the Federal Energy Regulatory Commission to have expanded review authority of utility mergers, there's been a fight over that. So it was pulled from the bill at the last minute, from the electricity title at the last minute, but Senator Domenici says he is determined to get that in, in committee. He wants that done in committee.

Colin Sullivan: What else? Brian and Darren either one of you want to jump in here on MTBE versus ethanol. I know you've covered that issue. Is there any glimmer of hope that the House and Senate, if a bill passes out of the Senate, can figure out this MTBE issue and get some sort of compromise?

Darren Samuelsohn: Well I mean Senator Judd Gregg said last week that a bill could come to the Senate floor, he would not expect to see a bill come out of the Senate to the floor that had a MTBE liability waiver, but, and he would have the support to make sure that doesn't happen. But when it came from conference he was a little bit less sure because of just the momentum of moving an energy bill through conference. If it had the MTBE liability issue in it, at that point, I don't know if Gregg still has the votes. There was an interesting story in The Boston Globe the other day about MTBE and the Saudi family having some connections down in Tom DeLay's district. So I'm wondering what kind of effect that will have and that story just ran a couple of days ago so we'll see where that goes.

Colin Sullivan: What about the ethics investigation or inquiry or whatever is going on with Tom DeLay these days? Is that likely to affect the process at all?

Darren Samuelsohn: You know, as I said before on this show, I mean I don't think that Tom DeLay's ethical issues necessarily are going to affect the House energy bill just because Joe Barton is also very much a supporter of the same things that Tom DeLay is, unless there starts to become an ethical investigation of Joe Barton, which there's nothing like that going on at this point.

Brian Stempeck: There's also a survey that came out yesterday from the Pew Foundation looking at what the public is paying attention to. No. 1 on the list was gasoline prices. Tom DeLay was at the bottom of the list. People just aren't really following that issue, perhaps as closely as Democrats would hope they would.

Colin Sullivan: OK.

Mary O'Driscoll: I wanted to make, just want to add one thing to the MTBE comments that you were making, is that the whole MTBE resolution revolves around the ability to get a compromise of some sort and people that I talked to in the Senate, the staff, do not believe that there, they don't see any chance for a compromise at this point.

Brian Stempeck: Just to throw one more thing out there, I mean, they're talking about a trust fund and there is a trust fund that exists already in the U.S. EPA's budget every year, the Leaking Underground Storage Tank trust fund and I've been wondering about that. Why not just increase the funding for that? And we'll get to this in a second I guess, with the EPA spending bill but there's no movement to try and drastically increase the Leaking Underground Storage Tank trust fund this year in EPA's appropriations.

Colin Sullivan: So Mary you don't make much a Judd Gregg's comments then?

Mary O'Driscoll: Well, I think that there's always the threat, but I don't, I really don't see, there's always a lot of talk from the, but you hear it from the House side, that oh, we're going to get it. We're going to get a compromise, but it's in their interest to promote that and I really don't see how you can compromise, especially when the House's position is there has to be liability protection for the producers of MTBE period. That is their bottom line and that's where the Senate really runs into problems.

Colin Sullivan: Darren, turning back to you I know you've been looking at the coal title pretty closely in the Senate energy bill. Can you talk about what's in the coal title that you've looking at?

Darren Samuelsohn: Well, it's got $2 billion over 10 years, 2006 through 2014. It's not a lot of money per year, it's about $200 million per year for clean coal projects and 80 percent of it in the Senate bill has to go every year to gasification. So some of the cleanest, ultra-clean technologies that are being developed right now, which has a possibility for sequestering carbon dioxide eventually if that technology can be developed.

Brian Stempeck: Yeah, that has a big tie to climate change. The technology they're talking about in that bill is IGCC, which is a basically a kind of, the Holy Grail when it comes to clean coal technology. This is the kind of technology you can put on a coal plant, that someday, I mean even today you can outfit it to sequester the carbon, take that and store it underground, which is basically the White House's approach to the best way to deal with CO2 but still use coal plants going out to the future.

Colin Sullivan: Isn't there also language on technology improvements and whether or not states and local regulators would have to enforce new technology improvements on power plants?

Darren Samuelsohn: Right. This has been here, it was there last year. It's there again this year and it does throw up a hurdle where you're spending all of this money on this technology, and this is what environmental groups are saying, but it doesn't mandate through the Clean Air Act that states when they are permitting new power plants or modifying existing plants, they don't have to use this technology. It actually, explicitly says that through the Clean Air Act you don't have to go through and look and use these new gasification technologies. So there's some question, is this hypocritical? You know, you're spending all this money on clean coal technology, but you not mandating where the rubber hits the road, that these plants actually have to use it.

Colin Sullivan: That language was in the conference report last year that never made it through and it's also in the House energy bill this year, correct?

Darren Samuelsohn: Correct, correct.

Colin Sullivan: OK, if we can move onto appropriations. You're also tracking the EPA spending bill on the House floor this week. Can you talk about some of the major amendment fights that are likely to happen on the floor?

Darren Samuelsohn: Well, we've got a $7.7 billion EPA spending bill and overall it's a $26.1 billion bill for the Interior Department, the Forest Service and EPA. The biggest amendment I'm tracking on the EPA side is the Clean Water State Revolving Loan Fund, the big catchall wastewater account, and there's a cut of $250 million from last year. Last year was cut from the year before. Overall, two years it's been cut by $500 million and this year we're hearing that Congressman David Obey, the ranking member from the House Appropriations Committee, is going to offer maybe one, maybe two amendments. One I'm hearing is a $500 million amendment trying to boost it all the way back up, but I'm hearing that the offsets on that are not going to be anything that the parliamentarians going to rule in order. So he might try come back with something a little bit less, $100, $200 million of an increase to the Clean Water Fund. But again, he's actually having, from one I'm hearing, a hard time trying to find an offset to that and that comes into the bigger picture debate of EPA is now in an appropriations bill with the Interior Department and the Forest Service and EPA. So if you want to take money from EPA, you're basically cutting out at the Interior Department.

Colin Sullivan: A lot of environmentalists say when they decided to combine the EPA and Interior Departments under a single spending bill, that those two departments would have to compete with each other for funds.

Darren Samuelsohn: Yeah.

Colin Sullivan: Are we seeing any evidence of that? Are we seeing --

Darren Samuelsohn: This thing right here. Yeah, this thing right here, the Clean Water State Revolving Loan Fund is the first example. It's a big example, I mean, it's one of the biggest things in EPA's spending bill and to cut it, I mean I think the Republicans knew that they were going to put the Democrats on the spot and they're having a hard time, they've been having a hard time for about the last two weeks trying to find a place where they could find $200 million, you know, from something else. And if you do take $200 million, you're going to make somebody else upset. A constituent is going to be very upset.

Colin Sullivan: Mary, turning to the energy and water appropriations bill, what big fights are we're going to see this year? We're going to the full committee this week and the House Appropriations Committee. The process and the Senate is moving a lot slower. What kind of fights do you see in energy and water this year?

Mary O'Driscoll: Well, it's, once again, I feel like a broken record, Yucca Mountain. Chairman Hobson, David Hobson of Ohio and the chairman of the Energy and Water Subcommittee, is proposing to have interim storage or just storage on-site or some sort of another storage site, other than Yucca Mountain. So that to kind of accelerate the process because some people are saying, well, it's clear he's thinking Yucca Mountain's not going anywhere, so that something has to be done soon. Others are saying, you know, we need to do something right away because Yucca Mountain is going to be delayed even further than it has been delayed. But he's also, interestingly, put money in there also for reprocessing, directing them to start looking at reprocessing, which scares the pants off of a lot of people in the nuclear industry because that brings in the anti-proliferation people who are very, very organized and that really raises the stakes for the nuclear industry in trying to get some sort of resolution to the nuclear waste problem.

Colin Sullivan: Well, we're just about out of time, but I just wanted to cover one more thing. Now do you think that, the House is moving much faster in the appropriations bill process this year. The Senate hasn't even scheduled its markup, sort of waiting to see what happens with this fight over judicial nominations.

Mary O'Driscoll: There's nothing, there's no allocations, no nothing. They're just in a holding pattern from what I understand.

Colin Sullivan: So are they just waiting for the end of the year to do a CR at the start of the next fiscal year? Is that what we're going to see across-the-board?

Brian Stempeck: Another omnibus, yeah.

Colin Sullivan: So, another omnibus, another, everyone's prediction of another omnibus?

Brian Stempeck: Another omnibus, I mean, you know Lewis is now the new chairman of the House Appropriations Committee and he wants to get all the bills done by July 4th and he says that the point is to not have an omnibus. I think it all comes down to the nuclear option and I think, from what I'm hearing, you know, Senator Cochran, the new chairman of the Appropriations Committee over there, is not scheduling markups in the Senate for the appropriations bills until the nuclear option thing is finished so we know what's going to happen.

Colin Sullivan: Why wouldn't they just go ahead and mark up the bills even if they can't go to the floor?

Brian Stempeck: He says he doesn't want them, or his staff aides are saying that they don't want the bills hanging out there for a week or two without going to the floor because you do need a significant amount of time on the Senate floor. The House can deal with an appropriations bill in a day, but in the Senate it takes a week or more sometimes for some of these bills.

Colin Sullivan: So once again we'll see another train wreck in the appropriations subcommittee.

Brian Stempeck: Certainly will.

Mary O'Driscoll: I think it's built that way.

Colin Sullivan: Mary O'Driscoll, Brian Stempeck, Darren Samuelsohn thank you all for being here.

Mary O'Driscoll: Thank you.

Colin Sullivan: Join us tomorrow for another edition of OnPoint. Until then I'm Colin Sullivan for E&ETV.

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