Energy in Washington: Licking our Wounds for Another Fight

by Scott Sklar, The Stella Group, Ltd.

Everyone in the renewable energy community tried to put a good face on it, but let's face it -- we have a second recent Energy Bill with little support for renewable energy and energy efficiency.

Right now, the monied interests are framing the debate and the country is losing.
Now to begin, I was pleased to see an increase in automobile mileage standards, which is obviously needed to cut imports. However, it is embarrassing that not only Europe has surpassed us with such standards, but China as well.

Secondly, the commitment to biofuels was very significant. The Bill included a 36 billion gallon Renewable Fuels Standard of which nearly a third has to be dedicated to next-generation cellulosic biofuels.

Throughout the process, there was also some dark humor, as Field Palmer from Green Chip Review wrote: “I mean nothing — absolutely nothing — could prepare us for the reality of peak oil, the caustic tide of global warming or WWIII over oil like the CAFE Standards. Just imagine the ramifications of our national fleet getting 35 mpg by 2020. I know what you're thinking...Who needs solar, geothermal, or wind power if your truck can get 22.2 mpg? Never mind the average light duty vehicle gets 21.6 mpg right now.”

Over $21 million was invested in ads and high paid lobbyists by electric utilities and the oil and gas industry, which resulted in an Energy Bill with no tax credit extensions and enhancements and no portfolio standards for energy efficiency and renewable energy.

As a 2004 article in the Boston Globe on the 2005 Energy Bill points out, “analysis of tens of thousands of pages of lobbying records shows that entities with a stated interest in energy policy spent $387,830,286 lobbying Washington last year. They also paid tens of millions of dollars in campaign contributions to officials putting together the package at the White House and on Capitol Hill.”

According to The Hill, a leading newspaper that covers Capitol Hill, “Southern Company, by spending huge sums both on lobbying and on political campaigns, is among the biggest power players in Washington. The utility, which reported $14.4 billion in revenues in 2006, helped derail an administration plan to create a national electricity market three years ago.”

Southern’s argument is that the RPS would raise costs for its 4.3 million customers in Alabama, Georgia, and Florida. Other Southeastern utilities, such as Louisiana-based Entergy, have joined Southern in arguing their area doesn’t have sufficient renewable sources of power.

“In fact, they do,” said Leon Lowery, a Senate Energy and Natural Resources Democratic aide. Lowery and other RPS supporters say the regional differences in renewable power are overblown, because there are already 6 megawatts of biomass that would qualify. The Bingaman bill also states that improvements in the efficiency at hydroelectric power plants would count as a renewable, as would landfill gas used to produce electricity, Lowery noted.

Rudy Giuliani is also one of the utility companies’ strongest supporters. Perhaps not surprisingly, his law firm, Bracewell & Giluliani LLP was hired by these groups to lead the intense lobbying against the Senate energy bill, which, according to a December 2007 article from ThinkProgress.org would have forced utility companies to “boost electricity generated by wind, solar and other forms of renewable energy to 15 percent of the U.S. total by 2020.”

Not to be outdone by the electric utilities, the oil and gas industry ran full page ads in The Washington Post for weeks deriding the Energy Bill as a “Tax Bill,” drowning out environmental and advocacy groups who had contrary points-of-view that these industries have had their highest profits in history and the $21 billion in offsets for clean energy tax credits represented a miniscule amount for them.

According to Bloomberg News data from an April 2007 article in the Washington Post:

“Exxon Mobil, the world's biggest oil company, said profit climbed 10 percent to a first-quarter (2007) record after higher gasoline and diesel prices increased refining profit. Profit rose to $9.28 billion from $8.4 billion in the comparable period a year earlier, the Irving, Texas company said in a statement yesterday. Revenue fell 2 percent, to $87.2 billion. Refining profit rose 50 percent, as the company increased fuel output at its 45 plants and as growing demand and breakdowns held back competing producers.”

The Energy Bill included $10 billion worth of taxes over 10 years basically on the five top oil and natural gas companies — BP, ConocoPhillips, Chevron Corp., Royal Dutch Shell, and Exxon Mobil Corp. as part of the $21 billion in “Pay as you Go” offsets for the clean energy tax incentives.

If you're curious, you should look up the campaign contributions of big oil to each of the following senators:

Senator Alexander from Tennessee, Senator Allard from Colorado, Senator Barrasso from Wyoming, Senator Bennett from Utah, Senator Bond from Missouri, Senator Brownback from Kansas, Senator Bunning from Kentucky, Senator Burr from North Carolina, Senator Chambliss from Georgia, Senator Coburn from Oklahoma, Senator Cochran from Mississippi, Senator Corker from Tennessee, Senator Cornyn from Texas, Senator Craig from Idaho, Senator Crapo from Idaho, Senator DeMint from South Carolina, Senator Dole from North Carolina, Senator Domenici from New Mexico, Senator Ensign from Nevada, Senator Enzi from Wyoming, Sentor Graham from South Carolina, Senator Gregg from New Hampshire, Senator Hagel from Nebraska, Senator Hutchison from Texas, Senator Inhofe from Oklahoma, Senator Isakson from Georgia, Senator Kyl from Arizona, Senator Landrieu from Louisiana, Senator Lott from Mississippi, Senator Martinez from Florida, Senator McConnell from Kentucky, Senator Roberts from Kansas, Senator Sessions from Alabama, Senator Shelby from Alabama, Senator Specter from Pennsylvania, Senator Stevens from Alaska, Senator Sununu from New Hampshire, Senator Vitter from Louisiana, Senator Voinovich from Ohio, and Senator Warner from Virginia.

(Search on the names of the PACs and of the top 3 C-level execs of each company in which you’re interested).

Some clean energy advocates have stated “we can win” tax credits next year, but history shows rather conclusively that no major bills pass Congress during a Presidential election year; however, that doesn’t mean short term tax extender packages can’t pass.

Other optimists point out that we did get some programs in the Energy Bill, which is true. So let’s look at the most significant program: Energy Loan Guarantees. The Bill provides $25 billion for nuclear, $10 billion for renewables, $10 billion for coal to liquids, $2 billion for uranium enrichment, and $2 billion for coal to gas. That means $39 billion for iterations of conventional energy and $10 billion for renewables. Even then, these funds have to be appropriated — and I am willing to bet the conventional industries get their full appropriations while the renewables will not. Paying attention to the political subtext, rather than the press releases, is surely in order here.

I want to be clear here about the Congressional Leadership of House Speaker Pelosi and Senate Majority Leader Reid, who had teed-up comprehensive energy legislation that in both legislative language and "spirit" provided energy efficiency and renewable energy the finest blend of public policies. Even at the last minute, they were working to resolve language issues regarding daylighting and inclusion of geoexchange.

I believe Reid’s statement was right on target when he said, “Today, America consumes 21 million barrels every single day, most of it from unstable regions of the world. That’s one billion American dollars going overseas — every day — to pay for our oil addiction. Those 21 million barrels we will use today — and the 21 million-plus barrels more we’ll use tomorrow — has created a three-pronged crisis: It threatens our economy, our national security and our environment.”

In the face of it, lets hope that the national will can be translated into political will. Right now, the monied interests are framing the debate and the country is losing.

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