Bitter climate puts energy ideas on ice

Sep 27 - McClatchy-Tribune Regional News - Jennifer A. Dlouhy Houston Chronicle

For two years, energy industry leaders and environmentalists have implored Congress and the Obama administration to deliver on promises to wean the U.S. off foreign oil.

But plans to expand offshore drilling, cap greenhouse gas emissions and use federal dollars to spark a nuclear power renaissance have collapsed on Capitol Hill amid partisan bickering and entrenched regional disputes.

The window for passing any sweeping energy proposals now has closed -- and those big ideas aren't likely to go anywhere during Obama's first term in the White House.

"Congress is going to tiptoe through this issue more than they have the last few years," said Jim DiPeso, policy director for Republicans for Environmental Protection, an advocacy group. "There will probably be more piecemeal attempts to deal with energy issues, rather than an all-encompassing magnum opus."

Major political obstacles will be standing in the way. The House and Senate will inevitably be more evenly divided -- with a narrower ratio of Democrats and Republicans on influential committees, reflecting the expected results of theelections.

That also means congressional leaders will have a tougher time lining up enough votes to pass anything significant -- much less controversial energy plans.

The anticipated election of some tea party-backed candidates -- and the surge of anger from voters concerned about federal spending -- also will be a roadblock for expensive plans to subsidize nuclear power, renewable energy sources and so-called "clean coal" technology.

And that's even before presidential election politics start getting in the way leading up the 2012 election.

"The more time you take, the closer you are to the colossal distractions of the 2012 election cycle," DiPeso said. "Time will be a luxury that Congress does not have because you'll start to see the early moves of the presidential dance begin sooner rather than later."

The administration's plan for an economywide cap-and-trade system for reining in greenhouse gas emissions is completely off the table, said Kevin Book, an analyst with the Washington, D.C.-based research firm ClearView Energy Partners.

"The notion of a big climate bill ... is over for as far as we can see," Book said.

In its place: legislation that would bar the U.S. Environmental Protection Agency from regulating those emissions, at least for a few years.

"It's difficult to imagine passage of global warming legislation in the next Congress," said Daniel J. Weiss, of the liberal Center for American Progress Action Fund.

"It's much more likely there is a pitched battle about whether to block EPA from setting limits on global warming pollution."

Offshore drilling

Even with expected Republican gains in the House and the Senate, initiatives to expand offshore drilling also are dead in the water. The idea had been advanced this year as part of a potential compromise in a global warming package. Even if the oil spill in the Gulf of Mexico hadn't made the issue politically treacherous, supporters would have a tough time overcoming opposition from drilling foes in the Senate -- especially if they couldn't wedge the plan into a broader energy bill.

Sen. Susan Collins, R-Maine, said Congress is better off trying to pass separate energy proposals instead of struggling to enact "a complex bill."

Congress has been trying "to bite off too many issues," Collins said. "We don't do comprehensive well. We should make progress in the areas where there is bipartisan consensus."

Funding problems

One of the top candidates is a proposal for a government-run "clean energy bank" that would help finance projects to commercialize alternative energy technology.

Other possibilities include proposals that would give a boost to electric cars and help pay for the infrastructure to support natural-gas-powered vehicles.

There also is growing bipartisan support for legislation that would force power utilities to slash their emissions of three pollutants: mercury, sulfur dioxide and nitrogen oxide.

But even if Congress can agree on those ideas, the lawmakers would still have to find a way to pay for them.

Failed cap-and-trade plans would have funded some clean energy programs using the revenue raised by selling emissions permits. Without that dedicated revenue stream, Congress will have a tough time footing the bill, Weiss said.

Lawmakers will be focused on cutting the budget, not paying for ambitious new energy programs, he said.

"They're going to be competing with every other program that's on the chopping block," Weiss predicted. Supporters of the energy proposals "will have no way to pay for them at a time when they're going to be cutting not just fat, not just muscle (but also) cutting federal government bone."

When climate change proposals collapsed, so did the chance of using the plan to pay for -- and leverage -- other energy initiatives, Book said.

"The funding for high-cost sources, as well as the political incentives to make some of the difficult trade-offs, are all gone," Book said. "The fiscal conservatism future means there's less opportunity for big spending."

DiPeso predicted that some newcomers to Congress -- especially Republicans who have benefited from the tea party movement -- will be reluctant to open the purse strings for new alternative energy programs.

"You're going to have a lot of new members coming in who aren't going to want to spend anything on subsidies for business -- or anybody else for that matter," DiPeso said. "If those veterans in Congress want to do something to gin up new nuclear power or push electrification of transportation, which will cost money -- or do anything that puts numbers on the federal ledger -- then they're going to have to make the argument that this is very important."

Lame-duck plans

Sensing the looming blockade, lawmakers and lobbyists have been setting the stage for a flurry of action on energy issues when Congress returns after the November elections for a lame-duck session.

Sen Jeff Bingaman, D-N.M., and retiring Sen. Sam Brownback, R-Kan., are leading a last-ditch campaign to pass legislation that would mandate that power utilities generate 15 percent of their electricity from renewable sources by 2021.

Under their proposal, wind-generated electricity and solar power would count toward the mandate, but nuclear power would not -- a major obstacle for many Republicans.

Lawmakers are laying the groundwork for a plan to get rid of some tax incentives used by the oil and gas industry. One plan backed by the Obama administration would change the rules for so-called dual-capacity taxpayers -- effectively restricting the credit that they can claim on their U.S. returns for taxes paid to foreign governments.

jennifer.dlouhy@chron.com