Prospects remain uncertain for US climate-change legislation

Prospects for US climate-change legislation in 2010 remain uncertain as 2009 enters its final weeks.

Nick Snow
OGJ Washington Editor

WASHINGTON, DC, Dec. 16 -- Prospects for US climate-change legislation in 2010 remain uncertain as 2009 enters its final weeks.

Proposals under discussion, including a bill already passed by the House, include a requirement that US refiners take responsibility for carbon dioxide emissions not only of their operations but also of consumers of their products. Producers argue that the proposals insufficiently emphasize use of natural gas.

Three US senators continue to work on legislation but report little progress. Two more had introduced their own proposal, while backers of bills which cleared the US House and the Senate Environment and Public Works Committee are pressing for their adoption.

Congress clearly feels pressure to act since the US Environmental Protection Agency issued a finding on Dec. 7 that greenhouse gas (GHG) emissions pose a danger to public health and should be regulated under the Clean Air Act. Lawmakers remain divided over whether adopting a domestic carbon cap-and-trade program is the best alternative, however.

Proponents argue that the program would establish a carbon price and a market for trading emissions credits. Critics warn that this new mechanism could encourage speculation and price manipulation without major safeguards.

Congress nevertheless has taken important steps, Senate Environment and Public Works Committee Chairwoman Barbara Boxer said on Dec. 14. Actions range from approval of billions of dollars in spending for clean-energy as part of the economic recovery bill in February to the Senate Energy and Natural Resources Committee’s passage of the American Clean Energy Leadership Act in June and to her own committee and the House’s similar, but separate, climate bills.

Attempts at consensus
Boxer said efforts by Sens. John F. Kerry (D-Mass.), Joseph I. Lieberman (I-Conn.), and Lindsay O. Graham (R-NC) to reach a bipartisan consensus also matter, while a new bill by Sens. Maria A. Cantwell (D-Wash.) and Susan F. Collins’s (R-Me.) represents “a positive development because the more senators involved in discussing the issue, the better.”

Most congressional Republicans remain wary.

“I think [we] have legitimate and serious concerns about this redirection of our energy policy, and we shouldn’t be alone,” said US Rep. Joe Barton (Tex.), ranking minority member of the Energy and Commerce Committee on Sept. 29.

Oil and gas industry association leaders have said the two cap-and-trade bills, HR 2454 and S 1733, pick winners and losers by providing carbon allowances to some businesses while penalizing others. Producers complain that they did not recognize natural gas’s potential contribution in reducing GHG emissions, while refiners said they would drive domestic gasoline and diesel fuel production overseas.

“The fact is that both the House and Senate versions of cap-and-trade legislation would have devastating impacts on American businesses across the economic spectrum, specifically on the domestic refining and petrochemical companies that fuel our economy and power American ingenuity, to say nothing of the adverse effects on their hundreds of thousands of employees and families,” National Petrochemical & Refiners Association Pres. Charles T. Drevna said on Nov. 11.

Kerry, Lieberman, and Graham released a framework for their compromise effort on Dec. 10 which includes provisions dealing with GHG emissions reduction goals, assistance to consumers and businesses in the transition to a lower-carbon economy, incentives for nuclear power and clean coal, and creation of nonfossil-energy jobs. It also contains an energy independence provision which addresses traditional energy producers as well as emerging technologies and processes.

Cantwell and Collins introduced their bill on Dec. 12. It proposes setting up a climate auction to sell “carbon shares” and rebate 75% of the revenue directly to consumers (an estimated average $1,100/year for a family of four) from 2012 to 2030. The remaining 25% would be used exclusively for “clean-energy” research and development, regionally specific assistance for communities and workers making the transition to a “clean-energy” economy, energy efficiency programs, and reductions in non-CO2 greenhouse gases, they said.

It also would establish GHG reduction goals of 20% by 2020 (compared to 17% in the Kerry-Lieberman-Graham framework and the other major climate-change bills) and 83% by 2050. Several environmental leaders and organizations endorsed it immediately.

“Energy is a $6 trillion market opportunity, and green jobs can transform the US economy. But we need a signal so that this can happen,” said Cantwell.

Meanwhile, Sen. Lisa Murkowski (R-Alas.), the Energy and Natural Resources Committee’s ranking minority member, said on Dec. 14 that she plans to file a disapproval resolution to keep EPA from trying to regulate GHG emissions under the Clean Air Act. The administration announced the endangerment finding the week before US President Barack Obama headed for the United Nations climate-change conference in Copenhagen instead of working with Congress to reach a bipartisan solution, she charged.

“EPA has taken these actions despite the fact that Congress is continuing to work on climate legislation. I find that highly counterproductive, especially as our nation struggles to regain its economic footing,” Murkowski maintained.

She said she would file the resolution under provisions of the Congressional Review Act, which Congress incorporated into the 1996 Contract with America Advancement Act that was signed into law by President Bill Clinton. In this instance, a disapproval resolution would be referred to the Environment and Public Works Committee, which Barbara Boxer chairs.

Contact Nick Snow at nicks@pennwell.com.

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