THE VINE JULY 13, 2010
How many times in the past year have journalists written some variant of, "Hey, we should be getting an energy bill sometime in the next week"? Too many to count, right? So it's probably unwise to make any bold predictions this time around. But Senate Democrats do seem to be getting closer to unveiling a brand-new energy bill, with the aim of getting it passed before the August recess. What's going to be in it? Well, that's the tricky part. No one knows for sure. Harry Reid's office is trying to cobble something together this week, and there's a lot of guessing. But here are four big-picture questions swirling about:
1) Are the clean-energy provisions going to be too weak? Let's start with what we know. Most observers predict the bill will almost certainly contain the following: a renewable standard for electric utilities, upgrades for transmission lines, various efficiency measures (such as new regulations for household appliances), plus provisions to help electrify the transport sector and reduce our oil use. Much of this will be based on the ACELA legislation passed last year by the Senate energy committee. (One key difference: This new bill probably won't contain incentives for new offshore drilling.)
Now, as I've written before, that's a problem. ACELA is awfully weak in places. Its renewable electricity standard, in particular, wouldn't achieve any more than what states are already doing. Now, this part could be strengthened; Amy Klobuchar has a proposal to do just that. The hurdles are: a) most green groups are too focused on pushing for caps on carbon emissions (see below), and b) it's still hard to get 60 votes for a robust renewable electricity standard. Most southern senators hate it, because they're convinced that the South doesn't have any renewable resources. One possible compromise would be to allow utilities to build nuclear plants to meet the standard—but then liberals get upset. All very tricky.
2) How will the oil spill affect the vote? On top of the clean-energy measures, the bill will also have a variety of items related to the Gulf spill. The Senate energy committee has been working on this piece, which will include restructuring the Interior Department and stricter regulations for deepwater drilling. Oil companies will also likely face more liability for spills (currently their liability is capped at $75 million, a figure that pales beside the damage BP has already inflicted on the Gulf).
Most of the oil stuff is uncontroversial, and the point of folding it in will be to make it uncomfortable for Republicans to oppose the energy bill. Take Florida's George Lemieux, who's serving out the remainder of Mel Martinez's term. The rumors are that Lemieux wants to challenge Bill Nelson for the Florida Senate seat in 2012. But Florida doesn't have an oil industry—it just has tarballs washing up on its beaches. So it'll be tough for Lemieux to vote against stricter oil regulations if he wants to stay viable. But then again, he saw how the Tea Party dominated Florida's GOP primary this year, so it's not like voting for a clean-energy bill will be easy, either.
3) Will cap-and-trade survive? The other big question is whether the final energy bill will have a cap on carbon emissions. Right now, say staffers, the big environmental groups (EDF and NRDC) are leaning hard on Reid to include this. But Reid also wants a bipartisan bill that can pass, and conservatives have spent a lot of time making "cap-and-trade" a dirty word. So the big economy-wide limits on greenhouse gases proposed by John Kerry and Joe Lieberman won't make it into this new bill. The question is whether a more modest cap that only applies to electric utilities could work.
Earlier today, Andrew Restuccia of The Washington Independent got his hands on a draft from April of a utility-only bill that was written by Jeff Bingaman (D-NM) and Olympia Snowe (R-ME). It's not clear whether this legislation is viable; Bingaman has already said he doesn't think a utility-only cap can get 60 votes. And it's not clear how serious Snowe is about working on a cap. Kerry has spent a lot of time pressuring her to work on a climate bill, especially after Lindsey Graham pulled out of talks. And you can see why she'd like the idea of a utility-only bill—after all, Maine doesn't have much coal-fired electricity, but it does use a lot of heating oil, which would be untouched by a utility-only cap. Plus, Snowe has voted for climate legislation before. But, then again, Snowe was "working" on health care reform right up until the very end, only to oppose the whole thing.
Still, for those interested, Michael Levi has a good analysis of the draft. The utility-only approach under discussion would do a lot less to cut emissions than a full cap-and-trade program, although it does allow the president to fold in manufacturers and other polluters into the program if he sees that the top five developing countries are taking similar actions. (It's unclear how this would play out in practice, though: In 2009, that top five would've included China, Brazil, Singapore, India, and Venezuela.)
4) Why isn't the White House leading on this issue? Later this week, Reid will meet with the relevant committee chairs—that's Boxer, Baucus, Lincoln, Bingaman, and Rockefeller—and hash out what to do. Right now, though, it looks like he has to steer this ship himself. According to a variety of sources, President Obama has remained fairly aloof from the whole process. True, the White House has held meetings with various senators, but they've generally been listening meetings—at no point has the president said, look, here's what we need to do and we're not leaving until we figure out how to get it done.
Now, there are plenty of theories as to why this is. Maybe the White House doesn't think it has the power to pressure individual senators. Or maybe it doesn't want to risk failure. A few weeks ago, after all, Obama tried to meet with Scott Brown about climate, and Brown came out of the meeting loudly announcing that he wouldn't support cap-and-trade. It was embarrassing. Yet without a clear leader, the energy bill seems to be drifting, and it's hard to see a strong piece of legislation emerging in the next month.