California Construction Trucking Association (CCTA)

Josh Voorhees – E&E News – July 26, 2010

Senate Majority Leader Harry Reid spent the weekend putting the finishing touches on a small energy and oil spill response package he plans to unveil today and appears to be holding firm against a renewable electricity standard despite a late lobbying blitz.

The Nevada Democrat said Saturday that the inclusion of an RES would threaten the fate of the entire legislation. "I don't think I have 60 votes to get that done," Reid said at the progressive Netroots Nation conference in his home state.

A group of environmentalists and clean energy advocates had sent a letter to Reid on Friday asking him to rethink his decision to omit an RES.

Reid made the decision last week to abandon a larger energy and climate bill that would have capped carbon emissions from power plants and established an RES in favor of the pared-down package, believing it is more likely to garner the bipartisan backing needed for passage by the end of next week.

Reid said last week that he was confident he would be able to find the needed votes to pass his narrow package. But Republicans have expressed concerns about several of the provisions that remain in his proposal, meaning bipartisan support is not necessarily a foregone conclusion.

A crowded congressional calendar will only make it more difficult to pass the bill before lawmakers head home for the August recess in two weeks. Democrats also want to vote on the Supreme Court nomination of Elana Kagan and still hope to pass a small-business jobs bill.

Reid has so far provided only a rough outline of the legislation, suggesting that it will raise the $75 million spill-liability cap for oil companies, create a "Home Star" energy-efficiency retrofit program, provide tax breaks for natural gas vehicles and infrastructure, and boost money for the Land and Water Conservation Fund.

Of those four provisions, at least three have drawn GOP fire in the past. While none appears destined to be a deal breaker, the concerns -- and Reid's expected decision to limit amendments -- could easily cause a series of procedural hurdles that would eat up most, if not all, of the remaining summer floor schedule.

The spill response provisions are likely to prove the most heavily contested, as highlighted by GOP leadership plans to offer their own spill bill as a counterproposal to Reid's legislation (E&ENews PM, July 23).

Democrats suggested last week that the spill title in their bill would be based on legislation from Sen. Robert Menendez (D-N.J.). But it was not immediately clear if they were speaking of his original bill, which would raise the $75 million cap to $10 billion, or the one that ultimately came out of the Environment and Public Works Committee, which would eliminate it completely.

At the time, EPW Committee ranking member James Inhofe (R-Okla.) offered an amendment to allow the president to set such caps on a spill-by-spill basis, but it was struck down in a 13-6 vote (Greenwire, June 30).

"We reached out to Democrats," Inhofe spokesman Matt Dempsey said Friday. "They rejected our compromise out of hand."

The Republican counterproposal -- which was introduced Thursday by Minority Leader Mitch McConnell of Kentucky and other GOP leaders -- includes language similar to Inhofe's amendment. It also would quickly lift the deepwater drilling moratorium on rigs that meet new inspection criteria, create a 10-member bipartisan commission to investigate and evaluate the BP PLC oil spill and response, and formally reorganize the Interior Department agency that oversees offshore drilling, the former Minerals Management Service.

The GOP proposal also would provide more flexibility in using the Oil Spill Liability Trust Fund to pay for the government response to spills and would allow the fund to borrow up to $10 billion from the Treasury. The measure would also share royalty revenue with states and communities that agree to allow drilling off their shorelines, sending 37.5 percent of oil and gas revenues their way. It also would extend revenue sharing to Alaska and would begin royalty sharing for Gulf Coast states in 2010 instead of 2017.

Reid has declined to say what, if any, additional spill or drilling provisions will be in the final draft of his bill.

Energy provisions

The GOP alternative does not include any of the energy provisions Democrats plan to include in their bill, indicating a possible line of attack for Republicans who have already accused the majority of trying to use the BP spill as an engine to push an unrelated energy agenda.

"Republicans have been pretty consistent in saying that we should be focused on dealing with the spill and fixing the MMS," Robert Dillon, a spokesman for Sen. Lisa Murkowski (R-Alaska), said Friday, explaining the Republican decision to focus their legislation only on the spill. "There's bipartisan agreement on doing those things, just some difference of opinion on how best to go about it. We should do what's possible now --- actually accomplish something -- and then address a more contentious energy bill later."

Republicans could also raise specific objections to the "Home Star" program and the natural gas vehicle tax incentives, although both of those have Republican co-sponsors in Sens. Lindsey Graham of South Carolina and Orrin Hatch of Utah, respectively.

Some Republicans have expressed concerns that the home retrofit rebates would be caught up in Energy Department bureaucracy, dampening its job-creating impact. The Congressional Research Service has cautioned against possible bottlenecks the program could encounter -- echoing problems DOE's weatherization program had after receiving $5 billion in stimulus funds.

"Home Star is simply a cash-for-clunkers," said Dillon, referring to last summer's federal program that paid consumers to scrap old cars and trucks for newer, more fuel-efficient ones. "It's just a jobs bill that doesn't create any jobs, it just gives money to unions." While the provision mandates spending for efficiency, Dillon said no one is overseeing it to make sure the money is being spent well or that improvements are being made.

The final provision in Reid's four-part package -- boosting the Land and Water Conservation Fund, which uses oil royalties to pay for federal and state acquisition of park and recreation lands -- could cause trouble within Reid's own caucus.

At an Energy and Natural Resources Committee markup of offshore drilling reform legislation last month, Sen. Mark Udall (D-Colo.) withdrew an amendment to fully fund the program because of opposition from several Democrats on the energy panel.

Still, despite the short schedule and possible partisan conflicts, many observers believe that Reid -- who has already ushered controversial health care and financial reform bills through his chamber -- has what it takes to squeeze out a small Senate victory on energy.

"Reid's a very good vote counter, and I assume his selection of these issues demonstrates that there is some consensus to move forward," said Joe Stanko, an industry attorney at Hunton & Williams and a former GOP counsel to the House Energy and Commerce Committee, in an interview last week.