INSIGHT: New Senate climate bill facing odds and time

15 April 2010 17:41  [Source: ICIS news]

By Joe Kamalick

Time runs short for US climate billWASHINGTON (ICIS news)--New Senate climate legislation is expected next week along with an unprecedented parliamentary plan to speed the measure to a floor vote as time and odds for passage of the controversial bill continue to narrow.

Under development for months, the measure is to be announced on or before the 40th anniversary of Earth Day next week, 22 April.

Sponsored by Senators John Kerry (Democrat-Massachusetts), Lindsey Graham (Republican-South Carolina) and Joe Lieberman (Independent-Connecticut), the bill’s centrepiece is a cap-and-trade mandate that will be applied sequentially to various industries over a five-year period.

The bill would seek to cut US emissions of greenhouse gases (GHG) to a level 17% below the nation’s 2005 output, chiefly by making traditional fossil fuels - coal, oil and natural gas - more expensive, thereby making alternative and renewable energy sources more cost competitive and forcing producers and consumers into fuel shifting.

According to reports, the cap-and-trade mandate - in what has come to be known by its sponsors’ initials as the “KGL bill” - first would be applied in 2012 only to the electric utilities industry.

It is that sector of the US economy that produces the most greenhouse gas emissions and where GHG-rich coal fuels almost 50% of the nation’s electric power.

The US transportation sector reportedly would next fall under a GHG reductions mandate, also as early as 2012, through a new tax on gasoline and diesel fuel, perhaps at the refining stage but ultimately to be paid by consumers in higher costs at the pump. 

Revenues from the fuels tax would be used to further subsidize alternative and renewable fuels and to spur more research and development and funding of those cleaner energy sources.

The broad manufacturing sector, including chemicals production, would become subject to the cap-and-trade mandate beginning in 2015 or 2016.

In hopes of attracting at least a few Republican votes in the Senate, the KGL bill also is expected to provide for more offshore oil and gas exploration and development and incentives to accelerate permitting processes and private funding for nuclear power.

While the exact details of the KGL bill remain to be seen, its timing obstacles, opposition roadblocks and amendment hurdles already are apparent and numerous.

 With the November national elections only six months away - and full-bore campaigning set to begin during the Senate’s month-long break in August, only three months off - there are at best 13 weeks or barely 50 legislative days available for Senate consideration of what surely will be a controversial climate bill.

It would be a significant legislative and parliamentary clock challenge, even if the climate bill were the only major matter before the Senate.

But it is not, and it probably stands well behind higher priority issues that will occupy senators’ time and attention over the next three months.

Among other pressing business, the Senate soon will begin consideration of a new Supreme Court nominee that President Barack Obama is expected to name within days. 

Sitting Supreme Court Associate Justice John Stevens announced last week that he will retire, and he asked Obama to get a replacement seated before the next High Court session begins in October.

To meet that deadline, the Senate - which must approve presidential appointments to the Supreme Court - will have to rush to hearings on and with the nominee, beginning perhaps as soon as May.

Senator Graham, one of the three authors and primary sponsors of the new KGL climate bill, sits on the Senate Judiciary Committee, which has primary responsibility for vetting the president’s nominee. That crucial job will pretty much take Graham out of the climate bill fight for many weeks, limiting his ability to lure other Republican senators to the climate cause.

In addition, in the wake of last week’s coal mine disaster in West Virginia that took 29 miners’ lives, the Senate is moving to consider new legislation on mine safety - an issue that will command the interests and attention of senators from as many as 25 US coal-producing states.

Further, the Senate is already hip-deep in work on comprehensive financial and banking reform, itself a highly contentious issue that might face a Republican filibuster and other delays.

With US unemployment still stuck at 9.7% despite the developing recovery, Senate Democrats - already feeling election year heat over the economy - want to push through another stimulus bill. Although chances of passage look dim, the debate will nonetheless eat up time.

The Senate also must devote time to Obama’s fiscal year 2011 budget proposal and work on passing several spending bills for the current fiscal year.

Last but by no means least, Senate Majority Leader Harry Reid (Democrat-Nevada) announced last week that he wants to introduce a bill for comprehensive reform of US immigration law.

He wants it moved through committees and onto the Senate floor for a vote before the elections in November - a goal that many on Capitol Hill think unrealistic at best and at worst foolhardy.

But Reid is in a tough race for re-election, perhaps the toughest fight of his Senate career, and is said to be desperate to chalk-up significant legislative victories - never mind which ones - to aid his campaign.

Whatever the specifics of the imminent KGL climate bill, senators of both parties are lining up to bombard the measure with amendments they consider essential but which are likely to be seen as poison pills by other members of the upper chamber.

Some senators want to push amendments to protect the coal industry - remember there are 25 coal-producing states - from being virtually shut down by harsh greenhouse gas limits.

Other industries - agriculture, livestock, trucking, rail and chemicals among them - will have their own Senate champions pressing for changes in the KGL measure.

Among other likely amendments, senators are seeking a carbon or so-called border tax on imports from countries lacking climate controls, support for high-speed rail, mass transit and intermodal rail, language to pre-empt state-level climate laws, a ban on greenhouse gases regulation by the Environmental Protection Agency (EPA) ... and so on.

Because of time constraints and a likely barrage of amendments artillery, Senators Kerry, Graham and Lieberman and Senate Democrat leaders are said to be considering an unusual ploy, one that is unprecedented for such a major piece of legislation.

Although the three senators are to publicly reveal their climate legislation next week, apparently they will not formally introduce it in the Senate. Instead, the measure will be handed off to Majority Leader Reid, to be worked as a leader’s mark.

In theory, Reid and the bill’s principal sponsors will then make whatever back-channel deals might be needed with other senators - adding this, cutting that - to improve the bill’s appeal. When Reid has the bill in a form he thinks passable, he will send it straight to the Senate floor for a vote.

This process would avoid weeks if not months of complex hearings, debate and amendment bids in multiple Senate committees. But even talk of such an unprecedented approach has already stirred the ire of many senators of both parties who insist that their committees be allowed their traditional and jealously guarded roles in crafting legislation.

And why all the rush to get a climate bill pushed through Congress in just a few months? Because it is widely held that this will be the last chance, perhaps for several years, to get it done. In the coming November elections, Republicans are expected to gain a significant number of seats in both the House and Senate, perhaps enough to even win back majority control in the House.

Even if Republicans do not retake majority control in either chamber, the elections will alter the congressional power balance enough to make climate change legislation an even bigger challenge in 2011-2012 than it is now.

Bill Allmond, vice president for government relations at the Society of Chemical Manufacturers and Affiliates (SOCMA), thinks that even now the Kerry-Graham-Lieberman climate bill is facing a formidable storm front of procedure and delay.

“Even if KGL introduce their bill in late April, it will take the Congressional Budget Office [CBO] and EPA six weeks or more to review it before it is ready for congressional action,” he noted. The CBO and EPA would have to evaluate, respectively, the costs and environmental effectiveness of the bill before senators could vote on it.

“The window of opportunity is closing quickly,” he added.

Jennifer Scott, spokeswoman for the American Chemistry Council (ACC), also sees major time problems for Senate action on a climate bill.

“The Supreme Court nomination, the fall elections, and the difficulty the Senate has faced thus far in reaching consensus on climate legislation are all challenging factors,” she noted.

Still, climate bill sponsors in the Senate may have one ace up their sleeves.

Enough senators might settle for a climate bill they otherwise would oppose, if only to pass a measure that would bar the EPA from proceeding with its own unilateral controls and limits on greenhouse gases - a regulatory nightmare more terrifying to many than anything Congress might enact.

To discuss issues facing the chemical industry go to ICIS connect
Paul Hodges studies key influencers shaping the chemical industry in Chemicals and the Economy


By: Joe Kamalick
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