Atlantic Examines How Climate Legislation Failed in Senate

Several critical mistakes helped kill climate change legislation in the Senate, wrote Atlantic blogger Brian Goldsmith. According to Daniel Lashof, director of the Natural Resources Defense Council's Climate Center, one element was losing control of the message after climate change legislation passed the House: "Democrats were not prepared, and we [in the environmental community] didn't do enough to explain, why this was good policy."

A second reason was a less than forceful response to Climategate. Senate leaders--and President Obama--had other issues on their mind. Environmental Defense's Tony Kreindler was quoted as saying: "It should be self-evident we haven't seen the level of engagement by the president necessary to seal the deal."

Losing the support of Sen. Lindsey Graham, R-S.C., was devastating. Kreindler said that a lack of support outside the Senate played a part: "We were close with the utilities, not with the manufacturers ... these agreements are important not because of special interest politics and the influence of big money but because having everyone at the table helps make policies that are durable and effective."

If an energy package fails to pass before the August recess, said Goldsmith, senators could try to pass a utility-specific CO2 cap in September, they could go for a comprehensive bill in the lame-duck session after the November elections, or they could wait until the next Congress and attempt to get a carbon cap through.

For now, said Goldsmith, the legislation put forward by Senate Majority Leader Harry Reid, D-Nev., has the support of most environmental leaders. He said the legislation would not "take off the table incentives to approve cap-and-trade at a later date--given that none of the pollution credits and industry subsidies in Waxman-Markey carried over to the Reid bill."

Sen. Lugar Proposes New Energy Bill With No Cap-and-Trade System

Sens. Richard Lugar, R-Ind., Lindsey Graham, R-S.C., and Lisa Murkowski, R-Alaska, have introduced energy legislation that would promote energy efficiency, provide loan guarantees worth $54 billion for new nuclear construction, devise a national renewable energy standard wherein nuclear generation and CCS would be considered renewables and require setting motor vehicle fuel-efficiency standards, E&E News PM reported. Lugar was quoted as saying: "It is time to recast the debate in Congress and match priorities with a practical alternative."

According to Lugar, the ranking Republican member of the Senate Foreign Relations Committee, the legislation would cut dependence on foreign oil by 40 percent and reduce emissions by more than 1.6 billion tons, UPI Energy reported, quoting Lugar as saying: "It targets our dangerous oil addiction by maximizing fuel savings in transportation and increasing domestic production of fossil and bio-based fuels."

Energy Secretary Steven Chu praised the Republican bill, called the Practical Energy and Climate Plan Act of 2010, for its emphasis on energy efficiency, but continued to push for a cap-and-trade system, Environment & Energy Daily reported. Chu was quoted as saying: "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."

Graham said Lugar's bill could possibly get 60 votes in the Senate because it did not cap emissions or expand offshore drilling, Bloomberg reported. The Union of Concerned Scientists criticized the proposal because it would "fail to cut global warming emissions to the level scientists say is necessary to avoid the worst of consequences of climate change," while Frank O'Donnell, president of Clean Air Watch, called it "amnesty for big polluters."

Options Abound as Democrats Struggle to Craft Climate-Energy Bill

Democrats hoping to pass climate change legislation through the Senate were using elements from a variety of proposals in the hope of gaining a 60-vote majority, Greenwire reported. White House Chief of Staff Rahm Emanuel said "there's enough in each" of the proposals to put together "a serious and comprehensive energy bill" that will pass in 2010.

Meanwhile, Energy Secretary Steven Chu welcomed another energy bill backed by Sens. Richard Lugar, R-Ind., and Lindsey Graham, R-S.C., Reuters reported. In a letter to Lugar, Chu wrote: "In particular, I appreciate your ideas for reducing America's oil dependence--which has taken on greater urgency as a result of the BP oil spill."

Senate Environment and Public Works Committee Chairwoman Barbara Boxer, D-Calif., said she expected Senate Majority Leader Harry Reid, D-Nev., to introduce his own bill as an alternative to the Kerry-Lieberman proposal. Reid was to meet with committee leaders today to begin devising a strategy, with a Democratic caucus to follow next week.

Sen. Joe Lieberman, ID-Conn., contended that introducing his proposal as a bill amendment was "wrong as a matter of policy and what's best for the country," and he called for it to instead "be at the center of the arena" as its own bill. Lieberman and Sen. John Kerry, D-Mass., objected to a cap-and-trade program that would apply only to utilities, with Lieberman arguing that "the moment is right for comprehensive legislation."

Brian Wolff, EEI senior VP of external affairs, was quoted by Greenwire as saying: "What you have is everybody right now is just throwing everything on the table."

Related story also appeared in Bloomberg via BusinessWeek.

Lindsey Graham 'Floating' Utility-Only Bill in Senate

Greenwire reported that Sen. Lindsey Graham, R-S.C., who abruptly dropped out of the tripartite Senate effort to revive a comprehensive climate change bill in late April, was "floating yet another alternative to price carbon emissions by focusing on just power plants." The utility sector is "most in need of a market signal for pricing greenhouse gases," the newsletter reported, adding that leaving other sectors out of a bill could also help win additional Senate votes.

Sen. John Kerry, D-Mass, who along with Sen. Joe Lieberman, I-CT, co-authored the latest draft unveiled in mid-May, was insisting that legislative efforts remain focused around a comprehensive bill. But other senators beyond Graham "also have expressed an interest in a less sweeping plan for controlling greenhouse gases," Greenwire reported.

EEI's Brian Wolff, senior vice president for external affairs, said the Kerry-Lieberman draft has encountered headwinds in overcoming "the gas tax" label, adding that the transportation component of the bill "was really going to be hard for people politically." Wolff told Greenwire that there have not been any discussions with member companies yet about the power plant-only option, adding "it's not been baked at all."

EEI also plans calls to key senators in the coming weeks on the Kerry-Lieberman bill, which was welcomed by the association "because it included valuable allocations that help the industry compensate customers for otherwise higher energy prices," Wolff was quoted as saying. "We've been focused on each legislative effort, whether it's the House effort or the Senate effort, on what we can do to improve it and what we can do to support it," Wolff said.

Sen. Graham Expects Senate to Block Endangerment Finding

Sen. Lindsey Graham, R-S.C., predicted the Senate will approve the resolution sponsored by Sen. Lisa Murkowski, R-Alaska, to block EPA's endangerment finding for GHG emissions, Environment and Energy Daily reported. Graham, who was one of 41 cosponsors of the resolution, said "the majority of the body will say that Congress should set the carbon regulations, not the EPA."

Graham added that he believed emissions limits needed "a more business-friendly framework than Waxman-Markey," including measures to promote "energy independence" for the U.S. He stated that one of his conditions for voting for the Kerry-Lieberman bill was for it to include provisions allowing offshore energy production along the Florida Gulf coast.

In response, Senate Energy and Natural Resources Chairman Jeff Bingaman, D-N.M., was quoted as saying: "I can't keep up with his various conditions." Graham predicted the climate bill will "either going to get 40 votes or probably 70 votes" from senators. Graham was quoted as saying of the bill's fate: "Every week that goes by, if people don't sign up, that's a bad thing. If people show an interest, that's a good thing. The political market will tell us after the modeling is done."

Exelon's Rowe Says Under 25% Chance for Passage of Climate Bill

In a speech to the Resources for the Future Policy Leadership Forum in Washington, Exelon Chairman and CEO John Rowe said that despite growing support, the climate change bill had a less than 25-percent chance of passing Congress this year, in his estimation, E&E News PM reported.

Rowe praised Sens. John Kerry, D-Mass., Joe Lieberman, ID-Conn., and Lindsey Graham, R-S.C., for getting the bill "just about right," but said Graham's departure will hurt its chances for approval. Rowe said Graham "still has his heart in" the bill, and approval "could happen" if Graham returned to work on it. He added that Exelon would not alter its "wait and see" stance on adding new nuclear plants regardless of the fate of the bill, because Exelon needed "to see gas prices and carbon prices actually get a bit higher before we would move."

Rowe supported a position of seeking gradual progress on climate change and energy prices. He also said the government should not make "massive investments" in an array of technologies rather than let the market determine changes in energy. Rowe was quoted as saying: "Your choices of technology change from year to year, and it is very important to know it. This is an argument to say, 'Proceed prudently. What you think is true will not always stay true.'"

Sens. Boxer, Graham Still See Prospects for Energy Legislation

Congressional efforts to enact energy legislation "might survive" the Gulf of Mexico oil-rig disaster that killed 11 workers and has caused environmental damage along the southeastern coastline, the Associated Press reported. Sen. Barbara Boxer, D-Calif., who chairs the Senate Environment and Public Works Committee and has been an opponent of offshore exploration, was quoted as saying that the spill "has definitely changed the equation but not necessarily in a negative way." Backers of more offshore drilling, she said, "understand they're going to need to work with us in making it safer. In some ways, it opens up that door."

The AP reported that there was significant political fallout, particularly for former Alaska Gov. Sarah Palin and ex-House Speaker Newt Gingrich. The conservatives, who were eyeing a possible 2012 presidential bid against President Obama, have promoted the "drill, baby, drill" mantra or the "drill here, drill now" refrain. The AP wrote that these phrases "suddenly don't seem so clever or wise."

Erich Pica, president of Friends of the Earth, was quoted as saying: "All the political winds are blowing in the direction of no additional oil drilling." The Gulf disaster, he said, "has given us a political-policy timeout."

The AP asked Sen. Lindsay Graham, R-S.C., the key Republican voice on the bipartisan team shaping energy legislation, how the political winds will blow. He said the Gulf spill does not necessarily rule out passage of a comprehensive energy bill this year, although he noted it's always difficult to round up 60 votes to overcome filibusters in the 100-member Senate.

Wrote the AP: "Praising Obama's approach to the oil spill, Graham said, 'We should be cautious, we should let this settle out, get this spill under control, find out what happened, but realize that America's energy dependency is a national security threat. Our choices all involve risk,' Graham said. The risk of having Middle East countries set oil prices for America, 'and this money getting into the wrong hands that we send overseas, to me, is much greater than the risks of domestic exploration for oil and gas'."

Kerry Says Industry Likely to Back His Climate, Energy Bill

Sen. John Kerry, D-Mass., speaking at the Good Jobs Green Jobs conference in Washington, said he expected electric utilities, chemical companies, and Big Oil to offer support for the climate and energy legislation he has been working on with Sens. Joseph Lieberman, I-Conn., and Lindsey Graham, R-S.C., Greenwire reported.

Sen. Barbara Boxer, D-Calif., chairwoman of the Environment & Public Works Committee, said Kerry and Lieberman planned to release their climate and energy legislation as soon as next week, whether or not Graham would return to the fold, E&E News PM reported. Kerry said the three senators continued to talk behind the scenes: "He's standing by the work product, and he's standing by the bill, no matter what."

The bill was expected to include a 17-percent cut in GHG emissions below 2005 levels, with staggered start times for different sectors of the economy, and to support increased nuclear power generation and expanded offshore oil and gas drilling, E&E News PM reported. Kerry said that within a few years almost all revenues from emission allowances would go back to consumers.

Democratic leaders have pushed Kerry and Lieberman to advance the legislation and to work on finding more Republicans to support it. Chris Miller, top climate aide to Senate Majority Leader Harry Reid, D-Nev., was quoted as saying: "The only real chance we have to get it done this year is to make sure it is bipartisan. And to date ... we've seen little to any public interest by very many Republicans."

The only Senate Republicans supporting the bill to date were Graham and Sen. Susan Collins, R-Maine, with Sens. Olympia Snowe, R-Maine, Scott Brown, R-Mass., George LeMieux, R-Fla., Judd Gregg, R-N.H., and George Voinovich, R-Ohio, seen as possible supporters, E&E News PM reported. Miller said Reid would not be likely to try to move the legislation forward unless he had 60 votes.

Energy Information Administration Analyzing Senate Climate Bill

The Energy Information Administration has received a detailed enough version of the climate-change legislation Sens. John Kerry, D-Mass., Lindsey Graham, R-S.C., and Joseph Lieberman, I-Conn., were working on to begin its analysis of the bill, Reuters reported. EIA spokesman Jonathan Cogan was quoted as saying: "We received details. It's not a copy of legislation, but it was specific enough to allow us to go forward with our modeling efforts."

Kerry said the bill was released to agencies for analysis despite the delay in its official release caused by Graham's withdrawal from final negotiations last weekend. Kerry's move could help speed up lawmakers' work on the legislation when it finally reaches the Senate floor, possibly in July, said Reuters. The Congressional Budget Office is expected to analyze the bill also.

Sen. George Voinovich, R-Ohio, has called for an ongoing analysis of the anticipated costs of the Senate climate and energy legislation, E&E News PM reported. Voinovich said in a letter to Senate Majority Leader Harry Reid, D-Nev.: "Modeling of similarly styled proposals shows us that the policy options that may be employed to regulate various sectors of the economy are sufficiently intertwined that even small changes to the bill can have significant effects on other regulated sectors and the cumulative economic impacts."

EPA and the Energy Information Administration estimated their work would take up to eight weeks unless the Senate asked for additional modeling to analyze changes in the legislation. Voinovich asked that EPA and EIA also analyze the cumulative impacts from state and regional GHG programs as well as from federal statutes that would not be pre-empted by the legislation and for an analysis of the cost of implementing federal climate policy using existing laws. Supporters of Voinovich's requests include Senate Minority Leader Mitch McConnell, R-Ky., and Sens. Judd Gregg, R-N.H., Olympia Snowe, R-Maine, and Susan Collins, R-Maine.

President Clinton Expects Senate Work on Climate Bill to Resume

Former President Bill Clinton expressed confidence that the Senate will return to work on climate change legislation despite the current dispute over immigration, Politico reported. Clinton said Congress will "probably get it back on track," although he acknowledged the possibility that an energy-only bill will emerge in place of a climate bill. Clinton cited the support for pricing GHG emissions from "big manufacturers" and industrial consumers who "want a deal very badly."

Meanwhile, Senate Majority Leader Harry Reid, D-Nev., reiterated his belief that the Senate can move on climate as he criticized Republicans for their "very unreasonable and illogical" position that Congress cannot pass an immigration bill as well in 2010. Democrats did not grant the request by Sen. Lindsey Graham, R-S.C., for Reid to put off consideration of immigration, and the party was said to be now seeking a new Republican sponsor for the bill.

Graham asserted that Democrats showed they were "not serious" about climate by turning their attention to immigration instead. Graham was quoted as saying: "I'm convinced that what was once a sincere effort to solve the problem of cap and trade, to replace it with a better product, has now become 2010 politics. Maybe I'm misreading the tea leaves? But that's what I believe."

- Related stories also appeared in Climate Wire via the New York Times, Greenwire via the New York Times, and the New Republic.

Sen. Reid Open to Putting Climate Ahead of Immigration

Senate Majority Leader Harry Reid, D-Nev., said he was willing to move the climate bill ahead of immigration reform legislation, the Wall Street Journal reported. However, Sen. Lindsey Graham, R-S.C., maintained his vow to absent himself from work on the bill even if the Senate took up immigration after climate. Reid said he was "going to go to" the climate bill if it was "ready to go" ahead of unfinished immigration. He criticized Republicans for failing to work with Democrats on immigration and rejected the possibility of moving immigration through Senate committees while putting the climate bill on the Senate floor.

Sen. John Kerry, D-Mass., said he, Graham, and Sen. Joe Lieberman, ID-Conn., were "working very hard and constructively to pull pieces back together." Kerry said of the possibility of leaving Graham out of work on the bill: "I don't want to even consider that at this point in time." Energy Washington Week [subscription required] reported that a source said Kerry had struck an "optimistic tone" on the bill last week, including his expectation that EEI would back it at its scheduled unveiling on Monday. Sources were now looking at potential alternatives to the bill in the attempt to pass energy and/or climate legislation in 2009.

- Related stories also appeared in the Washington Post, Bloomberg, and Politico.

Gulf of Mexico Oil Spill Threatens Support for Climate Legislation

The oil spreading from the Gulf of Mexico rig destroyed by a recent explosion has become the latest controversy dogging climate and energy legislation being readied by Sens. John F. Kerry, D-Mass., and Joseph I. Lieberman, ID-Conn, the New York Times reported today. The bill's third co-author, Sen. Lindsey Graham, R-S.C., continued to insist he would stay on the sidelines if the legislation were not scheduled for consideration ahead of immigration reform.

The legislation, which had been set for a public unveiling on Monday, but was delayed by Graham's shift, was said to include expanded offshore drilling for natural gas and oil. As a result, Florida Gov. Charlie Crist has backed away from his support for offshore drilling, the Miami Herald reported today. After a flight over the oil spill, Crist said: "Clearly it could be devastating to Florida if something like that were to occur. It's the last thing in the world I would want to see happen in our beautiful state."

The Herald wrote: "He said there is no question now that lawmakers should give up on the idea of drilling off Florida's coast this year and in coming years. He had said previously that he would support drilling if it was far enough from shore, safe enough and clean enough. He said the spill is proof that that is not possible."

Sen. Bill Nelson, D-Fla., said a "thorough investigation of the industry's safety practices" was necessary, the Times wrote, noting that he had pressed the Obama administration to "extend the coastal buffer zone off Florida to 125 miles from 75 miles. Now he said he was not certain that even that was enough margin for safety." Nelson was quoted as saying: "The tragedy off the coast of Louisiana shows we need to be asking a lot more tough questions of Big Oil. We need to look back over 10 years or so to see if the record denies the industry's claims about safety and technology."

The Times wrote that "several other coastal-state senators whose votes could be crucial to passage of climate legislation have expressed concerns about the safety and environmental impacts. The Times named Sens Sheldon Whitehouse, D-R.I.; Frank R. Lautenberg, D-N.J.; Benjamin L. Cardin, D-Md., Barbara A. Mikulski, D-Md.; Mark Warner, D-Va.; Kay Hagan, D-N.C.; and George LeMieux, R-Fla. Sen. Robert Menendez, D-N.J., was quoted as saying: "I have been an advocate of climate change legislation, but I'm going to have a real problem if we have drilling as I've heard it. Unless there is the ability for neighboring states to have some type of veto in the process, unless there's some serious environmental consideration before any drilling takes place, unless there are very significant buffer zones, I'm going to have a hard time at the end of the day supporting this legislation."

Kerry said EPA would study the possible economic impacts in a draft of the legislation he was sending the agency, Reuters reported. Kerry was quoted as saying: "We are sending the bill to be modeled now with Lindsey Graham's consent." Asked if the bill would be unveiled without Graham, Kerry said: "We're not even thinking about that."

EEI's Kuhn Says Climate Bill Needed for Investment Certainty

EEI President Tom Kuhn, on National Public Radio, said that the climate bill squabble on Capitol Hill was a distraction to the goal: "We all know that there is an objective to move to lower carbon fuels in the future, and it is extremely important to us when we are making billions of dollars worth of investments to have the certainty."

On Capitol Hill, a maneuver by Senate Majority Leader Harry Reid, D-Nev., to bring forward an immigration bill, brought a rebuff from Sen. Lindsey Graham, R-S.C., the key Republican partner in the triumvirate bringing the climate legislation forward. The other senators, John Kerry, D-Mass., and Joe Lieberman, I-Conn., stalled their expected announcement of a final version of the climate bill on Monday, looking for a compromise with Graham. Politico reported that Graham said the effort by Reid "dooms everything" because it was "breaking faith."

On American Public Media's Market Watch, EEI spokesman Jim Owen noted that utility CEOs "see a lot of challenges going forward in terms of what kinds of power plants to build and where to build them," and the continued uncertainty over the climate bill was creating problems for planning investments in new generation. Exelon spokeswoman Judy Rader was quoted as saying: "We are disappointed by this temporary setback. We remain hopeful that the issues will be resolved quickly, and that the U.S. Senate will make passage of an energy and climate bill an urgent priority."

Graham noted that the immigration bill "has no chance" to pass and the issue had come "out of left field" just before the planned unveiling of the climate bill. Graham disavowed speculation by White House Press Secretary Robert Gibbs that he withdrew because of pressure from other Republicans. Graham added: "I've made it perfectly clear that if you bring up immigration you're breaking faith with me. The faith was broken when immigration was interjected in the 11th hour."

Reid spokesman Jim Manley saw "no reason why we can't do climate change first" and then work on the immigration bill, and said it was "difficult to understand why we have gotten this reaction to Reid demonstrating his commitment to the issue." Lieberman said "we're working really hard to get" the climate partnership with Graham "back together," and he asked for Obama administration support in that effort.

- Related stories also appeared in the Wall Street Journal, Boston Globe, Los Angeles Times, Politico, and National Journal.

Winners and Losers Emerging in Senate Climate Legislation

As the proposed climate change legislation being crafted by Sens. John Kerry, D-Mass., Lindsey Graham, R-S.C., and Joseph Lieberman, ID-Conn., nears completion, Sens. Lamar Alexander, R-Tenn., and Scott Brown, R-Mass., expressed their willingness to give the proposed bill an open-minded review, Reuters reported.

Alexander was quoted as saying: "A sector-by-sector approach [to reducing CO2 emissions] makes a lot more sense for dealing with carbon." He also said he would "consider a cap on utilities only if we could figure out the right way to do it that didn't drive costs up substantially over the short term." Brown was quoted as saying: "I'm open to reading anything."

On the other side, Sens. Frank Lautenberg, D-N.J., and Robert Menendez, D-N.J., said expanded offshore gas and oil drilling provisions in the legislation could cost their votes.

Several issues in the legislation still needed to be ironed out, reported Reuters, including the allocation of future carbon pollution permits for electric power companies. A possible gasoline tax in the range of 15 cents a gallon, conceived with the input of some oil companies, Shell, BP and ConocoPhillips and favored by Graham, could also prove controversial, the Los Angeles Times reported. Oil companies, said the Times, had signed on to the proposal because they believed it would cost them less than other schemes to reduce GHG emissions. Resistance to the tax has come from some Democrats, and no other Republicans have stepped forward to support it.

Wrote the Times: "Proponents call the tax approach under consideration a 'linked fee,' because it links the extra cost for gasoline to the average cost of greenhouse gas emission permits created through a so-called cap-and-trade system for electric utilities." Backers of the tax proposal said they hoped it would help convince oil companies and the American Petroleum Institute to endorse the bill, or, at the least, not mount an ad campaign against it. Scott Segal, a lobbyist for the Bracewell & Giuliani, was quoted as saying: "It's not clear that a linked fee creates a path to 60 votes."

Key Senators Might Unveil Latest Climate Change Bill Within Days

Sens. John Kerry, D-Mass., Lindsey Graham, R-S.C., and Joseph Lieberman, ID-Conn., may unveil their revamped climate change bill early in the week, Reuters reported. Aides to the senators spent the two-week Easter recess working on the legislation, which will feature the goal of cutting 2005 GHG emissions levels 17 percent by 2020. A Senate source added: "We are working to address and reconcile all of the concerns raised by particular members about particular provisions."

Wrote Reuters: "Kerry is being hit with an array of other competing concerns: Industry wants the federal legislation to pre-empt state climate control efforts and U.S. Environmental Protection Agency regulation, an idea many state officials oppose. A dizzying number of other concerns were still being addressed too, according to government and private-sector sources. They include how oil industry tax revenues would be used, how pollution permits would be allocated to utilities and the shape of a border tax to protect steelmakers and other energy-intensive industries from unfair foreign competition."

Columnist: Utilities Would Be Hurt if Energy Legislation Stalls

National Journal columnist Ronald Brownstein said President Obama and the three senators readying a compromise energy bill--Sens. Lindsey Graham, R-S.C., John Kerry, D-Mass., and Joe Lieberman, ID-Conn.--"are making extraordinary efforts to address the concerns of energy interests and legislative moderates on both sides who have resisted action on climate. If those incentives can't break the logjam, the result could be a sustained stalemate that prevents the United States from advancing in any direction on energy."

The "grand bargain" the trio is work on features "more incentives for nuclear power and greater domestic production of oil and gas in return for limits on the carbon emissions linked to climate change." If this version of climate and energy legislation does not make it through Congress, Brownstein wrote, "stalemate would force more-severe carbon-emission reductions later on. It would also shroud the energy sector in uncertainty. That could especially hurt the utility industry." Duke Energy Chairman, President and CEO James Rogers was quoted as saying: "If you are going to modernize the fleet, you want to know what the carbon regime is."