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CLIMATE: Carbon cap looking like a long shot July 19, 2010

Posted by Laura Arnold in Emissions Trading/Cap and Trade, Federal energy legislation.
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(07/19/2010)

Josh Voorhees, E&E reporter

Senate Democrats hoping to negotiate a scaled-down carbon cap on power plants are facing increasingly long odds to make that happen.

They have at most until the end of next week to convince Majority Leader Harry Reid (D-Nev.) that they have the votes needed to pass the bill, something Reid has said is a prerequisite before he includes it in the broader energy bill expected on the floor this month.

The latest blow to reaching the 60 vote threshold came Friday afternoon when the Senate’s newest member said he would not support any of the cap-and-trade proposals currently on the table.

“With regard to cap and trade, I will say this: From what I’ve seen of the Waxman-Markey bill that passed the House of Representatives and other proposals pending in the Senate, they simply are not right for West Virginia,” said Carte Goodwin, the West Virginia Democrat who will officially be sworn in tomorrow to replace the late Sen. Robert Byrd (D-W.Va.).

While Byrd was not a certain “yes” vote on climate legislation, his recent criticism of the coal industry and mountaintop mining gave hope to advocates that he could be persuaded to support the bill.

Goodwin’s announcement came the same week that Sen. Ben Nelson (D-Neb.) said that he would not support a cloture vote on an energy and climate bill that included the utility-only cap.

Nelson has long been an opponent of pricing carbon but his announcement highlights the difficulties facing Sens. John Kerry (D-Mass.) and Joe Lieberman (I-Conn.) and their like-minded colleagues in their push to round up the needed votes.

Making matters worse for the carbon-capping effort is that many other moderate Democrats who Kerry and Lieberman would need to win over doubt that a deal can happen in time.

“I don’t think there is a whip count at this point to evaluate what is achievable or what can or cannot be done on climate change, but I think it’s very hard to see 60 votes on the floor of the Senate,” Sen. Byron Dorgan (D-N.D.) said Thursday. “I’d imagine we’ll know that in short order.”

Sen. Jay Rockefeller (D-W.Va.) sounded a similar note. “As I say, I’m skeptical with a cap-and-trade utilities-only bill,” he said. “I don’t think it will get the votes.”

Finance Chairman Max Baucus (D-Mont.), who is helping Reid craft some of the energy tax provisions expected to be included in the bill and is seen by many as more likely to vote for a carbon cap than Dorgan and Rockefeller, said that the odds were against the utility-only effort.

“I’m not going to handicap the different provisions, but I think there is a higher probability that we’ll have energy legislation pass,” Baucus said.

Once Goodwin is sworn in, the Democratic caucus will return to 59 votes, meaning that Democrats would have needed to win over at least one Republican even if they could have kept their own party united in the climate push. But with Goodwin and Nelson out of the running, Democrats will now need to convince at least three, and likely several more, moderate Republican to back a utility-only approach, something most have so far shown little support for.

“Everybody knows it’s not going anywhere,” Sen. Judd Gregg (R-N.H.) told reporters Thursday. Gregg, one of a handful of Republicans that Democrats have courted to join them in their climate efforts, said that the Senate ought to shift its focus to an energy-only bill immediately.

“I mean, this is a political exercise, not a substantive exercise,” Gregg said of ongoing efforts to craft a bill that would cap greenhouse gas emissions. “It’s Harry Reid trying to placate a couple of constituencies.”

With the notable exception of Sen. Olympia Snowe (R-Maine.) — who remains open to a utility-only approach but has not committed to voting for one — many other moderate Republicans appear to share Gregg’s doubts.

Sen. Lindsey Graham (R-S.C.), who has said he could support a utility-only cap but likely not this year, believes that regardless of whether Kerry can strike a deal, a utility-only plan would still be branded by Republican leadership as a tax increase.

“This is a pretty tough environment to get people to take difficult votes because no matter what you do on the climate side, it’s going to be called cap and tax,” Graham said.

Sen. George LeMieux (R-Fla.) said last week that he has spoken with Kerry and Lieberman multiple times about their efforts but that he won’t commit either way until he sees the final product. “The devil is in the details,” he told reporters.

But in responding to questions about the climate talks, LeMieux appeared to indicate that he would rather Reid move forward without the carbon provisions. “Look, there is a way we can do something where we could get 70 or 80 votes that would promote clean energy and more domestic energy without falling afoul of other things,” he said.

Utility industry

Kerry has conceded that he faces an uphill battle but nonetheless is pressing on with his efforts, focusing first on attempting to persuade the utility industry to support the scaled-down carbon cap. He held a number of closed-door meetings last week with industry representatives and has scheduled additional meetings for this week.

But last week’s discussions apparently made little progress in winning industry support.

The National Rural Electricity Cooperative Association’s chairman, Glenn English, described his Tuesday meeting as a “getting acquainted session” for the rural co-ops and the Massachusetts senator, who has no such electric co-ops in his home state.

“I think it’s fair to say that our membership has to be comfortable, particularly if anything is done along the lines of supporting it, we have to be comfortable,” English said upon leaving the meeting. “We have to be comfortable that we understand it, we have to be comfortable that it’s going to work for our members.”

English stressed that Kerry and his staff did not provide specific legislation and that the two sides “never did get down to those type of specifics.”

Negotiations over U.S. EPA air pollution rules have emerged as a critical step as Kerry and other lawmakers attempt to win industry support for the utility-only language.

Members of the utility industry say they will need to see concessions on pollutants like soot- and smog-forming pollutants and mercury in order to back any legislation that caps just their industry. But many environmentalists say they are fiercely opposed to any provisions that would weaken existing federal pollution rules.

After meeting with the Edison Electric Institute on Thursday, Kerry said that he is willing to rethink the pollution rules but stressed an unwillingness to “roll back” any portion of the Clean Air Act.

“Personally, I’m happy to include conventional, providing it’s at a level that’s appropriate,” he said.

However, Kerry added, “I’m not going to roll back any Clean Air Act requirements. If we put those requirements into a different form so that we’re still adhering to them, that’s a different issue, those are two different choices. But there’s not going to be a rollback of current requirements.”

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