Five-Ring Circus on Capitol Hill

Now that the President’s healthcare bill has passed (in what turned out to be a cliffhanger of a vote) and as mid-term elections approach, Democrats have begun a courting ritual of sorts in order to enlist Republican support for a climate bill.

South Carolina Senator Lindsay Graham is leading the Republican dialogue that seeks to bring offshore oil and gas drilling (for which The White House has recently shown its support) and intense support and subsidy for nuclear energy into the eventual bill. Senator Graham threw a wrench in the works last month when he pulled out of the climate bill dialogue because the Senate is moving immigration reform ahead of Climate.

The White House changed its stance on oil drilling presumably to woo Republicans on the Climate Bill.  The change prompted, Bob Dinneen, president of the Renewable Fuels Association to publicly declare, “Relying on 20th century energy sources to address 21st century challenges will not solve the problem. He added that “Oil and other fossil fuels are finite resources. While we cannot ignore their contributions, neither can we ignore the reality that reliance on them is simply unsustainable.”

The Kerry-Graham-Lieberman Bill, which is the new ‘bipartisan’ climate bill, was not going to include a renewable electricity standard, but Congressional Quarterly Today suggests otherwise in its recent article “Nuclear Role in Climate Bill is Unresolved.” The article implies that the discussion about an RES (or clean energy standard) is ongoing and also says that Graham suggested there could be a way to work out a hybrid renewable and nuclear standard on the Senate floor.

Energy prices and security are driving Congressional action on yet another energy bill. In the April 13th issue of Politico, none other than T. Boone Pickens penned his plea “To Compete with China, the US Must Tap Natural Gas“. Now I don’t agree with everything T. Boone promotes (which happens to be his own self-interest vis à vis his natural gas holdings) but even with all that baggage, his thesis deserves attention.

He asserts that given the current growth rates of China (and India) as the world begins to enter economic recovery, oil demand will exceed what producers can supply. And he says, “One hundred dollars a barrel of oil is not out of the question.” That’s also true globally for natural gas, so we will again see the global prices rise.  He further supports use of natural gas for trucks to offset diesel fuel explaining that one-third of the oil America imports goes to diesel fuel for 18-wheelers.

On the tax side, The Energy Efficiency Community has been rallying around a proposal called BuildingSTAR: Job Creation through Retrofits of Commercial, Institutional and Multi-Family Buildings (PDF).  The proposal would increase the Energy Efficient Commercial Tax Deduction from $1.80 to $3.00 per sq ft.  These would be for retrofits for more efficient windows, insulation, hvac equipment, duct testing and sealing, interior and exterior lighting, control and monitoring equipment and systems, and audits.

In early March, Senators Merkley (OH), Pryor (AR), Mr. Brown (OH), Stabenow (MI), Sanders (VT), and Cardin (DE) introduced a bill (S.3079) that would focus on incremental efficiency improvements of existing technologies.  The bill irked the ground-coupled (geothermal) heat pump and solar industries because their “appliances” out-perform those that use traditional technologies. As a result, Senators Feingold (D-WI) and Ensign (R-NV) introduced S.3021  to incorporate ‘direct use’ renewables geothermal heat pumps, solar daylighting, and renewable energy heating and cooling (primarily solar, geothermal and biomass) as eligible for the RPS. The bills have been referred to the Committee on Energy and Natural Resources.

Earth Day co-founder Dennis Hayes threw a political bombshell in his April 28th article in the Huffington Post. Wrote Hayes,

In recent weeks, the rich assortment of tax incentives, federal guarantees and loans, and pure pork in the Kerry-Graham-Lieberman bill had begun to tempt so much of corporate America to the trough that they might have whipped the reluctant Republicans into passing it. It would actually have made things worse. It would have eliminated the regulatory backstop the EPA can exercise under existing law.

It would have eliminated the ability of states, cities and regions to continue to experiment with the innovative programs that to date have been the source of all climate progress in the United States.

It would have permitted a tradeable derivatives market vastly more complicated than the mortgage scams that nearly brought down western civilization two years ago. Worse, it would have transferred vast federal wealth to companies that like the American South in 1850 have a vested interest in ensuring change does not happen.

Hayes, like me, supports the Cantwell Collins alternative.  He states:

The Cantwell-Collins bill is not unflawed but has the basic structure right. It caps carbon “upstream” at the 2,000 places ports, pipelines, mine mouths, etc. where it enters the economy. It auctions carbon permits each year up to the limits of the cap so, unlike with KGL, we will know precisely how much carbon will be emitted to the atmosphere each year from all fossil fuels. Cantwell-Collins returns 75 percent of the revenue collected to the public on a pro rata basis. Because the rich spend more (directly and indirectly) on energy than the poor, more than 80 percent of the public will be made richer by this progressive revenue measure. All the money will be returned to taxpayers and invested in technologies designed to reduce carbon — not to enrich coal companies and oil companies and pay for their lobbyists.

The spring Congressional sessions will be juggling a Supreme Court nomination, a restructuring and re-regulation of the financial community, and a Climate Bill, which will all become intensely partisan. Add to that, parallel actions on an Energy Bill and on a Tax Bill including energy provisions, and you have five-ring circus.

It’s far too early to tell whether the intense partisanship will grind the process to a halt, or whether some of these parallel efforts will be aggregated into larger legislative packages. A Climate Bill can grind to a halt or include energy and energy tax issues in a more omnibus fashion to attract votes and bipartisan support.

No one can determine now if all these events will move or stall legislation. But what I can tell you for sure is that there will lots of grandstanding, more proposals introduced, increased tension among parties, industries and advocacy groups, as well as some great political theater.

I can’t tell you how much global climate change will raise average global temperatures, but I can guarantee you that temperatures in Washington, DC can only go steeply up.

Scott Sklar runs The Stella Group, Ltd., a strategic marketing and policy firm advancing the utilization of clean, distributed energy applications. His coauthored book The Forbidden Fuel: A History of Alcohol Fuels was just updated and re-released by the University of Nebraska Press, and his other coauthored book, A Consumer Guide to Solar Energy, was re-released for its third printing. Sklar is an Adjunct Professor at the George Washington University teaching a multi-disciplinary sustainable  energy course beginning September 2010.

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Scott, founder and president of The Stella Group, Ltd., in Washington, DC, is the Chair of the Steering Committee of the Sustainable Energy Coalition and serves on the Business Council for Sustainable Energy, and The Solar Foundation. The Stella Group, Ltd., a strategic marketing and policy firm for clean distributed energy users and companies using renewable energy, energy efficiency and storage. Sklar is an Adjunct Professor at The George Washington University teaching two unique interdisciplinary courses on sustainable energy, and is an Affiliated Professor of CATIE, the graduate university based in Costa Rica. . On June 19, 2014, Scott Sklar was awarded the prestigious The Charles Greely Abbot Award by the American Solar Energy Society (ASES) and on April 26, 2014 was awarded the Green Patriot Award by George Mason University in Virginia.

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