Hill Heat

From CQ Greensheets and Detroit News reports on movement on the inter-chamber energy bill negotiating process:

• The controversial standard legislation – fuel economy (CAFE) and renewable fuels (RFS) from the Senate bill (HR 6), and renewable energy (RPS) from the House bill (HR 3221) – “will be worked out behind closed doors between House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid”, with staff-level discussions this week
• Opponents of the CAFE legislation in the Senate bill continue a last-ditch effort to advocate Hill-Terry (HR 2927) and get Senators to switch their votes. The coalition, led by Energy and Commerce chair John Dingell, includes:
  • Alliance of Automobile Manufacturers
  • Blue Dog Coalition
  • American Farm Bureau Federation
  • American Recreation Coalition
  • Associated General Contractors
  • International Professional Rodeo Association
  • Plumbing, Heating and Cooling Contractors Association
  • Small Business and Entrepreneurship Council
• Dingell’s staff is meeting with the leadership staff for the closed-door negotiations, but he is leaving the door open to blocking the energy bill: “I’m not foreclosing any option. I don’t make the jungle. I just live there.” He also said that trying to get a bill completed before the scheduled October 26 recess “is to invite a disaster.”
  From CQ Greensheets:

  Energy Talks to Begin, But Not on 3 Key Issues By Coral Davenport

  Negotiations on a major energy bill begin Monday — but Democratic leaders have already drawn fire for taking the three biggest and most contentious issues off the table. The three issues those leaders cite as their top priorities in crafting new energy policy — raising vehicle fuel economy standards and setting nationwide mandates for renewable fuels and electricity — will not be up for discussion as Energy Committee staffers from both chambers and parties convene to start hammering out a compromise bill.

  Instead, those highly controversial provisions — which, if enacted, would signal a new direction in U.S. energy policy — will be worked out behind closed doors between House Speaker Nancy Pelosi, D-Calif., and Senate Majority Leader Harry Reid, D-Nev., say congressional aides.

  Whatever bill emerges from the staff and leadership talks will then have to be sent back to both chambers for passage.

  Each of those initiatives passed one chamber, but not the other, this summer as part of a larger energy bill. The Senate passed a measure (HR 6) that would significantly raise fuel economy standards for cars and light trucks and would mandate production of 36 billion gallons of biofuels by 2022. The House bill (HR 3221) would require 15 percent of the nation’s electricity to come from renewable sources by 2020.

  But lawmakers question whether one bill containing all three contentious measures could make it through both chambers this year, especially as the fuel economy and renewable electricity provisions have divided Democrats, making a majority uncertain. Analysts say that appears to be the reason congressional leaders are keeping those pieces off the negotiating table, and trying to engineer the bill themselves — a strategy that has drawn plenty of criticism from Republicans.

  “I think the notion of establishing a negotiation framework where the three biggest elements of the plan are off the table is a fraud,” said Chris Tucker, communications director for House Republican Whip Roy Blunt, R-Mo.

  Many Republicans may not even attend the initial negotiations, in order to protest their inability to weigh in on the three key pieces. “At this time it’s unclear if Republicans are going to be attending talks on Monday,” said Matt LeTourneau, a spokesman for Senate Energy Committee Republicans. “One of our sticking points is that certain items are off the table. The issues that took up so much time on the Senate floor and House floor are not open for discussion.”

  Charges of partisan perfidy in energy negotiations are not new: In 2003, the Republican chairmen of the Senate and House energy committees, Sen. Pete V. Domenici of New Mexico and Rep. W.J. “Billy” Tauzin of Louisiana, privately drafted a proposal for consideration by conferees on a major energy bill — a process one Democratic aide called “the illusion of inclusion.” The plan eventually won conference approval amid partisan bickering, but the bill ultimately failed.

  Fuel Economy

  While key issues may be off staffers’ negotiating table, that doesn’t appear to have deterred a major lobbying push on at least one of them: raising corporate average fuel economy, or CAFE, standards.

  Efforts to legislate better vehicle mileage have been stalled for more than 20 years, but this summer’s Senate energy package included a provision that would require manufacturers to raise vehicle fleet averages to at least 35 miles per gallon by 2020 for cars, light trucks and sport utility vehicles.

  Pelosi has said she strongly supports incorporating that provision in the final energy deal, but it has met with powerful pushback from a broad group of opponents, including The Alliance of Automobile Manufacturers and the influential Blue Dog Coalition, a group of fiscally conservative House Democrats. In the past, these groups have pushed against moves to raise CAFE standards entirely — but now they are pushing instead for a more modest House bill (HR 2927) by Reps. Baron P. Hill, D-Ind., and Lee Terry, R-Neb. Their bill would leave separate regulations in place for cars and “light trucks,” such as sport utility vehicles, while setting the overall fuel economy at 32 miles per gallon to 35 mpg by 2022.

  That has brought along the support of groups that have previously opposed all efforts to tighten fuel economy standards, but who now say they would support a raise with separate standards for cars and light trucks. The push includes influential groups that depend on light trucks to do business, including the American Farm Bureau Federation; the American Recreation Coalition; Associated General Contractors; International Professional Rodeo Association; National Association of Plumbing, Heating and Cooling Contractors; and the Small Business and Entrepreneurship Council. Another key supporter of the Hill-Terry bill is powerful House Energy Chairman John D. Dingell, D-Mich., who has long been a key opponent of any raise in fuel economy standards, but has cosponsored the Hill-Terry measure.

  Counter-lobbying by environmental groups is also in full force. “What this effort really boils down to is nothing more than an 11th-hour attempt by a boatload of lobbyists to scuttle a boosted fuel-economy standard that the Senate already passed,” said Deron Lovaas, a vehicles expert at the Natural Resources Defense Council.

  But staffers say the Democratic leadership’s “off-the-table” strategy will likely keep that proposal out of discussions and the final product. “The chances for Hill-Terry getting into the mix are very slim,” said a Democratic leadership aide.

  From Detroit News:

  Doors close on energy bill

  WASHINGTON – Rep. John Dingell, chairman of the House Energy and Commerce Committee, is disappointed a House-Senate committee won’t tackle legislation to improve the fuel economy of the nation’s vehicles.

  Instead, House Speaker Nancy Pelosi has chosen Democratic leaders to write an energy bill – which would include provisions on fuel economy – behind closed doors, rather than through a conference committee of House and Senate negotiators. She cited Senate Republican opposition to appointing members.

  “We cannot have a situation where if they don’t give us a conference, we don’t have a bill,” Pelosi said. “With or without a conference, we will proceed.”

  However, Dingell, D-Dearborn, said conference committees “frankly work and (have) produced good legislation.” He said conference committees allow legislators of both parties to work together to produce a compromise that will make good law.

  “It ought to be permitted to work, and the speaker has chosen otherwise,” Dingell said in an interview Friday. “I’m not going into this with a chip on my shoulder. I intend to try and work with her to achieve a good bill.”

  In June, the Senate passed a bill 65-27 that hikes corporate average fuel economy, or CAFE, 40 percent – to a combined standard of 35 miles per gallon by 2020. Automakers have argued that bill would cost them billions. Dingell and the automakers have backed a House bill that’s softer than the Senate’s and gives automakers more time to comply.

  In a formal conference committee, Dingell would have more leverage to strike a compromise.

  Now, “Nancy Pelosi can write a bill in a dark room on the back of a napkin,” Rep. Mike Rogers, R-Brighton, said on Friday.

  Dingell wouldn’t divulge whether he would mount an effort to kill an energy bill that was too harsh on automakers. “I’m not foreclosing any option,” he said. “I don’t make the jungle. I just live there.”

  Dingell stressed too that he has not been cut out of the process. His staff will meet today with Democratic leadership staff to discuss the energy bill.

  Drew Hammill, a Pelosi spokesman, said Friday there would be “talks” at the staff level this week and that the House speaker – who supports the Senate measure – hopes to have a bill completed before year’s end.

  Trying to get a bill completed in “two weeks is to invite a disaster,” Dingell said. He said the Senate bill “has serious problems in the House.”

  More than 170 House members have backed a rival fuel economy bill – dubbed “Hill-Terry” after its sponsors – that would increase fuel economy mandates at least 28 percent by 2022 to between 32 mpg and 35 mpg.

  Auto lobbyists are growing worried that a bill similar to the Senate bill might be passed before the end of the session.

  Privately, they have been lobbying some senators to reconsider their support of the bill that passed in June.

Democratic Senators Bob Menendez (NJ), Jack Reed (RI), John Kerry (MA), Russ Feingold (WI), Chris Dodd (CT) and Dick Durbin (IL) wrote last week to Sens. Joe Lieberman (I-CT) and John Warner (R-VA), the Chairman and Ranking Member of the Environment and Public Works Subcommittee, to weigh in on the draft plan of the legislation the two are developing.

They mirror the previous praise by Democrats on the subcommittee in their letter:

We write today to congratulate you on your leadership in addressing global warming. The outline of proposed legislation that you distributed last month is an important start and your efforts to forge a bipartisan bill and attempt to pass a meaningful climate change bill this Congress deserve praise and recognition.

They go on to express some concerns, though without the vehemence of the Kit Bond’s conservative criticism:

• Calling for a 80% reduction by 2050 with specific and aggressive interim targets, as opposed to the 70% target in the draft
• Reiterating opposition to “safety valve” legislation like that in Bingaman-Specter
• Criticizing the degree to which free allocations of emissions credits are given to the fossil fuel sector
• Calling for more emphasis on energy efficiency and renewable energy: “take some of the considerable resources generated by the auction process and devote them to further research and incentives for renewable energy . . . make the bill more balanced by devoting a larger share of the allowance value to public purposes, including support for energy efficiency and renewables”

Toyota is now responding to NRDC’s challenge to drop its opposition to the Markey-Platts CAFE standard increase (since echoed by UCS and Ed Markey, and written up by Tom Friedman):

There are various bills before Congress that would mandate a new target of 35 mpg by 2020 and require both cars and trucks to meet that standard. Our engineers tell us the requirements specified by these proposed measures are beyond what is possible. Toyota spends $23 million every day on research and development but, at this point, the technology to meet such stringent standards by 2020 does not exist.

Toyota has long supported an increase in the Corporate Average Fuel Economy (CAFE) standards. Moreover, Toyota has always exceeded federal fuel economy requirements. We are continuously striving to improve our fuel economy, regardless of federal mandates.

Toyota currently supports a proposal known as the Hill-Terry bill, HR 2927, that would set a new standard of up to 35 mpg by 2022 (up to a 40% increase) and maintain separate categories for cars and light trucks. Although this won’t be easy, we believe it is achievable.

House Energy Independence and Global Warming Committee chairman Ed Markey responds: “Apparently the only thing that separates Toyota from the ‘impossible dream’ of 35 miles per gallon here in the U.S., is a flight across the Pacific Ocean,” as Toyota meets Japan’s (and Europe’s) fuel efficiency standards of greater than 40 MPG, according to the International Council on Clean Transportation.

As he previously announced he would, Energy and Commerce’s Energy and Air Quality Subcommittee chair Rep. Rick Boucher (D-Va.) released the first of a series of white papers on climate legislation today, Scope of a Cap-and-Trade Program.

Based on the hearings earlier this year, the Committee and Subcommittee Chairmen have reached the following conclusions: The United States should reduce its greenhouse gas emissions by between 60 and 80 percent by 2050 to contribute to global efforts to address climate change. To do so, the United States should adopt an economy-wide, mandatory greenhouse gas reduction program. The central component of this program should be a cap-and-trade program. Given the breadth of the economy that will be affected by a national climate change program and the significant environmental consequences at stake, it is important to design a fair program that obtains the maximum emission reductions at the lowest cost and with the least economic disruption. The Subcommittee and full Committee will draft legislation to establish such a program.

Oddly, the white paper fails to mention a baseline for emissions reductions; the scientific consensus for the 80 percent reduction is from 1990 emissions levels.

The white paper makes no recommendations on how credits should be allocated, though Boucher has stated his resistance to auctions in the past. Nor does it discuss interaction with foreign carbon markets or how to deal with imports from unregulated entities.

The white paper argues that complementary measures are necessary:

“Even with a broad-based cap-and-trade program, complementary measures (such as a carbon tax or other tax-based incentives, efficiency or other performance standards, or research and development programs) will also be needed. For example, funding for research, development, and deployment of new technologies would assist industries that will need to adopt new technologies. In addition, efficiency or other performance standards might be appropriate for some economic actors that would be inappropriate to include directly in a cap-and-trade program, but that should contribute to an economy-wide reduction program in some other way.

Proposed measures range from Dingell’s carbon tax, increased CAFE standards, appliance and lighting efficiency standards, a federal renewable energy standard, to carbon sequestration funding.

Further notes are below.

Forwarded to Hill Heat (as always, I’m reachable at cunctator@hillheat.com):

A Message from Irv Miller

Dear Associate:

Toyota is currently the target of a campaign by the National Resources Defense Council (NRDC) that accuses us of opposing increases in the Corporate Average Fuel Economy (CAFE) standards for cars and light trucks. The assertion by this group that we are actively lobbying against increased fuel economy standards is just flat wrong, and we want you to be aware of the company’s position on this important issue and the facts.

FACT: Toyota has long supported an increase in the CAFE standards. Moreover, Toyota has always exceeded federal fuel economy requirements. We’ve never waited for federal mandates. Under the current CAFE standard, an automaker’s average miles per gallon for cars must exceed 27.5 and light trucks must exceed 20.7. Trucks weighing less than 8500 lbs. must average 22.5 mpg for model year 2008, 23.1 mpg in 2009 and 23.5 mpg in 2010.

FACT: There are various bills before Congress that would mandate a new target of 35 mpg by 2020 and require both cars and trucks to meet that standard. Our engineers tell us the requirements specified by these proposed measures are beyond what is possible. Toyota spends $23 million every day on R&D but, at this point, the technology to meet such stringent standards by 2020 does not exist.

FACT: Toyota supports a proposal known as the Hill-Terry bill, HR 2927, that would set a new standard of from 32 to 35 mpg by 2022 (up to a 40% increase) and maintain separate categories for cars and light trucks. That won’t be easy, but we believe it is achievable.

To help set the record straight, I have posted a message on this topic on the company’s blog. To learn more, visit the blog by clicking here—> http://blog.toyota.com/2007/09/irvs-sheet-a-ca.html

Toyota, maker of the 46 MPG Prius*, is lobbying against the Markey-Platts fuel-economy bill (HR 1506), which calls for 35 MPG by 2020, and for the significantly more industry-friendly Hill-Terry (HR 2927) as part of the Alliance of Automobile Manufacturers. (An AAM rep has even commented on this site).

NRDC is challenging Toyota on its blog and with its How Green is Toyota? campaign, which asks people to email the Toyota North America president and stop opposing Markey-Platts.

Irv Miller, Toyota North America’s VP of corporate communications, promoted Hill-Terry on the Toyota blog in July and fired back at NRDC in September.

Today, from Thomas Friedman in the New York Times:

Representative Edward Markey, the Massachusetts Democrat who heads the House Select Committee on Energy Independence and Global Warming, said to me that Toyota could meet a 35 m.p.g. standard in Japan and Europe today, “but here — even though they bombard Americans with ads about how energy efficient Toyota is — they are fighting the 35 m.p.g. standard for 2020.”

Mr. Markey said he has tried to persuade Toyota that “a lot of people have bought Priuses or Camry hybrids to fight global warming and reduce our dependence on foreign oil” and “they would be shocked to find out” that Toyota is lobbying against the highest m.p.g. standards for America.

CQ.com reports:

Senate Finance Chairman Max Baucus is contemplating changes to the ethanol tax credit, Social Security taxes and property taxes to help pay for a bill that would give farmers new tax breaks. . . .

Reducing the 51-cents-per-gallon ethanol tax credit by 5 cents would save about $854 million over 10 years. The provision would take effect only after annual ethanol production reached 7.5 billion gallons. Last year, about 6 billion gallons were made.

While the provision could irritate corn state lawmakers who say current law is helping boost rural economies, biofuel advocates say they won’t fight the provision.

“This is . . . the natural evolution of the industry,” said Matt Hartwig, spokesman for the Renewable Fuels Association.

At the same time, Jon Doggett of the National Corn Growers Association says he has “some real misgivings” about the proposal. Any change in the tax credit should be hashed out in the energy bill, he said.

As he announced he would last month, Rep. John Dingell (D-Detroit), chair of the House Energy and Commerce Committee, unveiled draft legislation for a carbon emission fee and related elements.

Dingell is soliciting comment online.

The elements:

• A $50 tax per ton of carbon (approximately equivalent to a $14 price on CO2, not the $100/ton CO2 reported by CNSNews) to be phased in over five years and then indexed to inflation
  • Revenues will be apportioned to Medicare and Social Security, universal healthcare, SCHIP, conservation, renewable energy research and development, and LIHEAP
• A $0.50/gallon gasoline tax to be phased in over five years and then indexed to inflation
  • Diesel would be excluded from this tax because “the fuel economy benefits of diesel surpass even its emissions benefits; it provides about a thirty percent increase in fuel economy and a twenty percent emissions reduction,” figures basically in line with the Union of Concerned Scientists report, The Diesel Dilemma “on an energy-equivalent basis, each gallon of diesel fuel results in about three percent more heat-trapping gas emissions than gasoline.”)
  • Biofuel blends would only be taxed on their petroleum content
  • Revenues go to the highway trust fund, with 40% going to the mass transit and 60% going to roads
• A $0.50/gallon jet fuel tax, with revenues going into the airport and airway trust fund
• McMansion provision: Phases out the mortgage interest deduction on primary mortgages on houses over 3000 square feet, going to zero for homes 4200 square feet and up
  • Exemptions for historical homes (prior to 1900) and farm houses
  • Exemptions for home owners who purchase carbon offsets to make home carbon neutral or own LEED certified homes
  • Budget savings will go to pay for an increase in the Earned Income Tax Credit

Panel I

• Olafur Ragnar Grimsson, president of Iceland

Panel II

• Alexander Karsner, assistant secretary of Energy for energy efficiency and renewable energy
• Mark Myers, director, U.S. Geological Survey

Panel III

• Susan Petty – AltaRock Energy
• Lisa Shevenell – Mackay School of Earth Sciences and Engineering, University of Nevada
• David R. Wunsch – New Hampshire Geological Survey
• Kenneth H. Williamson – geothermal consultant

At last week’s American Meteorological Society Hurricanes and Climate Change panel, Greg Holland highlighted the importance of the National Hurricane Research Initiative Act of 2007 (HR 2407, S 931).

The bill, introduced by the Florida delegation in the spring, would establish a multi-agency board to set strategy and make grants for hurricane research. From CRS:

Requires the Under Secretary for Oceans and Atmosphere of the Department of Commerce and the Director of the National Science Foundation (NSF) to establish a National Hurricane Research Initiative and to cooperate with other specified federal agencies to carry it out. Requires such Initiative to set research objectives (based on a National Science Board report on the need for such Initiative) to: (1) make recommendations to the Board; (2) assemble the expertise of U.S. science and engineering capabilities through a multi-agency effort focused on infrastructure, the natural environment, and improving understanding of hurricane prediction, intensity, and mitigation on coastal populations; and (3) make grants for hurricane research, including regarding hurricane dynamics, modification, and observation, air-sea interaction, relationships between hurricanes and climate, predicting flooding and storm surge, coastal infrastructure, building construction, emergency communication networks, information utilization by public officials, and sharing computational capability. Directs the White House Office of Science and Technology Policy, through the National Science and Technology Council, to coordinate U.S. activities related to the Initiative as a formal program with a well-defined organizational structure and execution plan. Directs the Under Secretary and the Director to: (1) establish a National Infrastructure Database to catalog infrastructure, provide information to improve information public policy related to hurricanes, and provide data to improve researchers’ abilities to measure hurricane impacts in order to improve building codes and urban planning; and (2) develop a National Hurricane Research Model to conduct integrative research and facilitate the transfer of research knowledge to operational applications