Washington Post

By Steven Mufson
Washington Post Staff Writer
Monday, June 15, 2009

Democratic allies remain at odds over provisions of a House climate bill and a Senate energy bill, even as congressional leaders and Obama administration officials are pressing to complete work on the legislation.

The latest rough patch came late Thursday afternoon when House Agriculture Committee Chairman Collin C. Peterson (D-Minn.) met with the two chief sponsors of a climate bill to hash out differences in the office of House Speaker Nancy Pelosi (D-Calif.). After more than an hour, they emerged without an agreement, gave reporters curt expressions of optimism and left without taking questions.

"There's no deal, but I'm optimistic," said Henry A. Waxman (D-Calif.), chairman of the House Energy and Commerce Committee and co-sponsor of the bill. Peterson, who earlier that day said he would oppose the bill, said only that "we made good progress."

Peterson wants to make the bill more favorable to farmers and agricultural businesses. For example, he wants the Agriculture Department to have the authority to decide whether environmentally friendly actions by farmers would qualify for lucrative benefits under a system in which allowances to emit greenhouse gases would be bought and sold. Under the bill drafted by Waxman and Rep. Edward J. Markey (D-Mass.), the Environmental Protection Agency would have that authority.

The Peterson problem is just one of many that stand between the Waxman-Markey bill and the ultimate adoption of a climate bill.

Democratic lawmakers also differ over provisions in an energy bill being drafted by the Senate Energy and Natural Resources Committee, which would open up the eastern Gulf of Mexico to oil and gas drilling and would water down an Obama campaign proposal setting minimum requirements for the use of renewable energy.

The differences over touchstone issues in the bill could jeopardize its chances of passage by the full Senate, where Sen. Bill Nelson (D-Fla.) is threatening to filibuster it over the provisions for drilling off the Florida coast. Major environmental organizations are also leaning toward opposing the bill. In addition, executives from companies in the wind turbine business are lobbying hard for stiffer renewable energy requirements, arguing that they would be better off with requirements that have already been enacted by 28 states.

"The current legislation does not create jobs and, more importantly, does not effect the sea change that President Obama sought," said Don Furman, president of the American Wind Energy Association and senior vice president of Iberdrola Renewables. Obama has said that he wants to double the amount of renewable energy use over three years and that he wanted to make renewables 25 percent of U.S. energy sources by 2025.

Sen. Jeff Bingaman (D-N.M.), chairman of the Senate Energy and Natural Resources Committee, is trying to craft a bill that would satisfy a majority on his diverse committee, but Josh Dorner, a Sierra Club spokesman, said the bill had already "suffered death by a thousand cuts" and had "ended up in a disturbing place."

One key issue has been offshore drilling. On Tuesday, the committee approved an amendment by Sen. Byron L. Dorgan (D-N.D.) that would permit drilling in the eastern Gulf of Mexico 45 miles or more from the coast of Florida. It would allow drilling closer to shore in the Destin Dome, an area about 25 miles off the coast of the Florida panhandle where companies discovered natural gas years ago. (Though longstanding presidential and congressional restrictions on offshore drilling were lifted last year, the eastern Gulf of Mexico remains under special protection that was part of a 2006 energy bill.)

The muddled politics of offshore drilling cross party lines. Five of the committee's 13 Democrats voted against Dorgan's amendment, including Sen. Robert Menendez (D-N.J.), who is concerned about potential drilling off his home state, but Republicans supported it. Sen. Mary Landrieu (D-La.), a strong supporter of offshore drilling, also voted against Dorgan's amendment but only because she wanted some of the federal royalties diverted to state coffers. Her own earlier effort to direct a portion of royalties to the states failed, in part because the committee's Democratic majority won the backing of Sen. Sam Brownback (R-Kan.), who believes that the federal Treasury needs the money from drilling in federal waters.

Sen. Lisa Murkowski (R-Alaska), meanwhile, won support for an amendment that would require the Interior Department to lease areas 180 days after environmental approvals are given for offshore drilling.

Democrats, environmental groups and wind industry executives are also sparring over a provision known as the renewable electricity standard, which would require electric utilities to use renewable energy sources for 15 percent of their power generation by 2021. But critics argue that the standard has been severely weakened by special exceptions. Utilities can use energy-efficiency measures to meet 4 percentage points of that amount. States could petition to get credit for more energy-efficiency measures and lower the renewable requirement further.

Because of an amendment by Sen. Evan Bayh (D-Ind.), whose state relies heavily on coal-fired power, utilities would also be able to pay a relatively modest fine for failing to comply. The money would go to individual states, which could return the money to the utilities or subsidize nuclear power or carbon capture and storage projects. The amendment passed with strong Republican support.

Murkowski, the ranking Republican on the committee, also inserted an amendment that would remove new nuclear power generation from the total energy used to calculate renewable minimums. Nuclear power is not considered renewable, but its supporters note that it does not emit greenhouse gases.

The draft measure would also ease restrictions on the use of crude from Canadian oil sands, which produce more greenhouse gases than ordinary petroleum and which could face obstacles under the renewable fuel standard adopted last year. The amendment passed by voice vote. The "committee correctly recognized the importance of Canadian oil to our nation's energy and economic security," said Jack Gerard, president of the American Petroleum Institute. He said oil companies would expand and upgrade refineries to handle the Canadian crude and would create thousands of new jobs.