Climate Bills and a Green Economy

Q+A: Obama's Speech and U.S. Energy Legislation

June 16, 2010

Reuters - President Barack Obama used a national address on Tuesday to review steps he has taken to deal with the BP oil spill in the Gulf of Mexico and to encourage Congress to come up with ideas on how to revamp energy and environmental policy.

Obama did not lay out specific actions he is seeking from lawmakers. But Congress is likely to debate energy and environmental legislation in coming months.

The fate of such legislation this year will hinge on some of the questions posed here:

WHAT WOULD THE LEGISLATION DO?

It is still very much a work in progress with scores of proposals coming from members of Congress, congressional committees, the White House, lobbyists and environmentalists.

Among the likely components of what could be the largest rewrite of U.S. energy and environment policy in a generation are:

• Removing a $75 million cap on what individual companies have to pay in the aftermath of an oil well leak or other disaster;


• Imposing tougher rules on the way new offshore oil drilling sites are leased by Big Oil and more stringent safety standards for both the planning and implementation stages;


• Reforming government agency oversight after years of its cozy relationship with industry. Obama already has announced he is revamping the Interior Department's Minerals Management Service. But Congress might decide to legislate some additional changes. One idea -- to create a totally new, independent agency -- has some significant opposition in the Senate;


• Requiring electric power utilities to use more alternative power sources, including wind and solar energy, so that there is less reliance on dirty coal-burning plants that contribute to global warming. Government aid for building more nuclear power plants too;


• Encouraging the development of more fuel-efficient cars, thus reducing U.S. reliance on foreign oil;


• Possibly imposing a new "cap and trade" pollution permit system on utilities to further encourage the use of cleaner-burning fuels. During his speech late on Tuesday, Obama praised the House of Representatives for passing a "strong" climate change bill last year that is much broader than a utilities-only bill. But he did not say the Senate should approve the same bill or even a similar one.

WHAT DID OBAMA SAY?

He complained that China was investing in clean energy jobs and industries "that should be here in America" and that the United States sends nearly $1 billion a day to foreign countries for their oil.

While he urged a "national mission" to unleash U.S. innovation and "seize control of our destiny," Obama did not vow an all-out battle this year to pass comprehensive climate control and energy legislation, as he did with his successful healthcare reform initiative.

Instead, Obama said he'd listen to ideas lawmakers might have and listed some of the less ambitious proposals circulating on Capitol Hill, such as raising energy efficiency standards in buildings and setting alternative energy standards to encourage more electrical power generation from wind and solar power. These are important ideas for reducing carbon dioxide pollution but experts say they fall far short of what's needed to effectively combat global warming.

WHAT ELSE DOES HE HAVE TO DO?

The president has made four trips to the Gulf Coast to get a first-hand look at the disaster, inspect cleanup activities and reverse a perception that he was slow to act or too detached. His national address aimed to stir up public support for energy and environmental legislation.

It's unclear whether he will now launch a less public effort to convince lawmakers to pass legislation.

WOULD A BILL PASS CONGRESS?

In the wake of BP's massive oil spill in the Gulf of Mexico that began April 20, Republicans would have a hard time -- especially in an election year -- voting against a bill that gets tough on multinational oil companies. But they might if it is coupled with initiatives they do not like and do not have broad public support.

Such legislation also is likely to be sweetened with additional aid to Gulf Coast communities hurt by the BP spill.

Democrats, who hold majorities in the Senate and House of Representatives, might want even tougher actions against Big Oil and more progress on reducing greenhouse gas emissions. But given that they are facing the loss of some seats in November's elections, they could see this year as the optimal time to pass a compromise bill, as they still have strong majorities in the Senate and House.

WHEN WOULD CONGRESS DO IT?

If the Senate manages to pass a huge bill in July, it would then begin negotiations with the House, which passed a climate change bill a year ago. The goal would be to meld the two together in a way that a compromise bill would have enough support to pass both chambers. But the final deal might not come until after the November 2 elections, and the vote could complicate the bill's passage.

WHAT IMPACT WOULD IT ACTUALLY HAVE?

The U.S. is already making some progress on controlling carbon dioxide emissions through the use of more energy-efficient appliances. Meanwhile, Obama is moving ahead with higher fuel efficiency requirements for vehicles. U.S. carbon pollution also has dropped as a result of the economic recession that slowed factory orders.

While new legislation would add to those carbon reductions, it still would disappoint many foreign governments, which think the United States, as the biggest carbon polluter among developed countries, ought to do more to battle global warming.

But there will be opportunities in the future for Congress to build on climate control laws.

As for the clampdown on offshore oil drilling, Congress will want to show it is protecting the environment from future disasters, but it doesn't want Big Oil to abandon drilling.

WHAT'S NEXT IN CONGRESS?

On Thursday, Senate Democrats huddle in the Capitol to gauge sentiment for coupling climate change legislation with alternative energy and offshore drilling initiatives.

Leaders in both chambers want all ideas submitted by the start of the July 4 recess.

WHAT DO VOTERS WANT?

This might be the toughest question of all. The one thing that's clear is that voters are angry with Congress, angry with big business and angry with the growing size of the federal debt. So, it could be tough to sell legislation that includes a new scheme for trading pollution permits, even if it's just aimed at one sector -- utilities.

But a poll just published by the Pew Research Center for People and the Press indicates shifting attitudes that likely are related to the BP oil spill. Fifty-six percent said it was more important to protect the environment, while 37 percent said it was more important to keep energy prices low.

COULD IT ALL FALL APART?

That's always a possibility. There are enough political and procedural hurdles to doom major legislation, especially during an election year.

While a full-scale legislative attack on global warming might fall short this year, Congress is likely to at least pass legislation clamping down on offshore oil industry practices and encouraging more alternative energy use.

Analysis: Obama speech short on energy, climate details
Factbox: Lawmakers' reaction to Obama speech

Obama to Meet Senators on Energy Bill Next Week

June 16, 2010

Reuters - U.S. President Barack Obama will meet key Republican and Democratic senators on June 23 to discuss a way forward for energy legislation currently stalled in the Senate, a White House aide said on Wednesday.

The meeting, which will include Republican Lindsey Graham (see story below), one of three original authors of the bill in the Senate who later dropped support for it, takes place as the president pushes for energy reform in the aftermath of the Gulf of Mexico oil spill.

"Next week he will be reaching out to senators on both sides of the aisle to chart a path forward," the official said.

In his Oval Office address late on Tuesday, Obama said he was willing to take ideas from both political parties in order to advance the legislation.

"The tragedy in the Gulf underscores the need to move quickly, and the president is committed to finding the votes for comprehensive energy legislation this year," the aide said.

Senator Joe Lieberman, an independent, said on Wednesday he thought Obama was pushing for comprehensive legislation and his support could make a big difference for the bill that many doubt can pass ahead of November's mid-term congressional elections.

"The president is not asking that the Congress pass another ordinary energy bill as we've done twice in the last five years, that hasn't really changed our dependence on foreign oil or on fossil fuel generally," Lieberman told reporters. "He's asking for something so big that he compared it to the mobilization for World War Two and the moonshot program."

Democratic Senators Barbara Boxer and John Kerry and Republican Senators Susan Collins and Richard Lugar will also be involved in the meeting, among others, the White House aide said.

Kerry and Lieberman unveiled the Senate bill last month which would require U.S. industries and utilities to cut their output of carbon dioxide pollution, which many scientists blame for global warming.

In a move to attract Republican votes in the divided Senate, the two senators also included incentives for expanding nuclear generating capacity, oil and gas drilling and research on how to cut pollution at coal-burning utilities and factories.

After BP's massive spill, the bill would also likely include measures to strengthen oversight of offshore drilling, while allowing it to continue.

Obama Pushes Congress on Financial Reforms, Oil Spill

June 10, 2010

* U.S. needs financial regulation, Obama says
* Pushes for energy legislation
* Promotes small business agenda

Reuters - U.S. President Barack Obama pushed congressional leaders on Thursday to pass energy, financial reform and jobs measures, even as they grapple with the devastating BP (BP.L) oil spill in the Gulf of Mexico.

He said he and the Republican and Democratic leaders had discussed the Gulf crisis, and all had agreed on the importance of considering how to update U.S. law to ensure victims of the spill are protected.

U.S. pollution legislation was written before the industry developed ultra-deep water exploration and ought be brought up to date to ensure the people of the Gulf "are made whole," the Democratic president said.

"That was a prominent part of the discussion, and I was pleased to see bipartisan agreement that we have to deal with that in an aggressive, forward-looking way," Obama said.

But he said he wanted Congress to pass during its current session his measures to boost the economy, generate jobs and aid small businesses and his sweeping financial regulatory reform bill.

"The financial markets I think deserve certainty, but, more importantly in my mind, consumers and the American people deserve to know that there's a regulatory framework that is in place," Obama said.

Obama met with House of Representatives Speaker Nancy Pelosi and Senate Majority Leader Harry Reid, the two Democratic leaders in Congress, as well as House Republican leader John Boehner, Senate Republican leader Mitch McConnell and Steny Hoyer, the No. 2 Democrat in the House.

McConnell said Senate Republicans -- and some Democrats -- were happy to work on legislation directly related to the spill in the Gulf, but would resist efforts to use it as a rationale for a comprehensive energy bill that would include an emissions trading mechanism.

"What most of my members, if not all of them, and a substantial number of Democrats in the United States Senate will not be interested in is seizing on the oil spill in the Gulf and using that as a rationale ... for passing a national energy tax," McConnell told reporters after the meeting.

Obama pushed for passage of his sweeping energy bill, which would fight climate change and ramp up production of renewable fuels.

"Although obviously our immediate task is to deal with a crisis that is affecting millions of people down in the Gulf, we can't keep our eye off the importance of having an energy policy that meets the needs of the next generation and ensures that the United States is the leader when it comes to energy policy," Obama said.

Boehner said he felt both the Obama administration and BP should be held accountable "for their various failures" related to the spill.

Obama said the leaders had also talked about how to deal with debt and deficits, and control spending.

Chu Reiterates Support for Carbon Price as Competing Bill Emerges

June 10, 2010

Platts - Just hours after a senior Republican US Senator introduced climate-change legislation to compete with a Democratic measure, Energy Secretary Steven Chu--in a letter to that minority party lawmaker--reiterated his support for the Democratic approach.

Earlier Wednesday, Senator Richard Lugar, Republican-Indiana, introduced a bill, the Practical Energy and Climate Plan Act of 2010 (H.R. 3464), that seeks to cut greenhouse-gas emissions through energy efficiency measures, the increased use of nuclear power and other measures.

The bill is meant as an alternative to a climate bill proposed by senators John Kerry, a democrat, and Joseph Lieberman, an independent, which unlike the Republican bill contains a measure to put a price on carbon.

While Chu lauded Lugar's emphasis on energy efficiency, he echoed the Obama administration position that a price on carbon was crucial to encouraging the adoption of new energy technologies, such as nuclear plants, low-emissions coal plants and renewable sources of energy.

"I continue to believe that to fully capitalize on these opportunities we need comprehensive legislation that puts a price on carbon and makes clean energy the profitable kind of energy," Chu said.

The letter to Lugar comes a day before Chu is to meet with President Barack Obama to discuss the Kerry-Lieberman bill and the ongoing oil leak in the Gulf of Mexico, a senior DOE official said Wednesday.

Chu has been in Houston assisting BP in its efforts to stop the flow of oil from its Macondo well.

Also on Thursday, Senate Majority leader Harry Reid, Democrat-Nevada, will meet with the heads of committees to discuss how to go forward with the Kerry-Lieberman climate legislation in that chamber. Last week Reid asked committee heads to finish their work on the bill by July 4, with the intention of bringing it to the floor for debate later that same month.

Also last week, Obama said that the oil spill underscores the need for clean energy, and pledged to put his weight behind finding the votes needed to gain the 60 needed to pass a Democrats' climate bill.

Those votes may be hard to find. Lugar's bill has already attracted support from fellow Republican Lindsey Graham of South Carolina. Graham originally worked with Kerry and Lieberman on their bill, but pulled out over another issue.

Over 200 Department of Energy scientists and other experts, including Chu, a Nobel Prize winning physicist, have been deeply involved in many aspects of the leak in the Gulf, including the effort to cap the leaking well head and attempts to determine the rate that oil is leaking from the well.