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Weekly Policy Update 7/12/10 - Senators Return to DC


Weekly Policy Update 7/12/10 - Senators Return to DC

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Senators return from the Independence Day recess today with a packed schedule awaiting them. Senate Majority Leader Harry Reid (D-NV) will be working with committee chairs this week to chart a path forward on clean energy legislation in hopes of attracting 60 votes.

Senate Timeline:

  • 7/12-8/6: Four weeks of Senate floor time
  • 8/7-9/12: August recess (according to current schedule)

Senate Climate and Energy Bill

Majority Leader Reid remains committed to working on a "comprehensive" energy and climate bill that includes a price on carbon covering at least the utility sector. According to the Energy Guardian, senators working on pieces of the new bill include Snowe (R-ME), Kerry (D-MA), and Bingaman (D-NM). This week, Senator Reid plans to meet with five Senate committee chairs and present them with a set of policy options in hopes that they will agree on a path forward that can attract 60 votes. The package is thought to include three sections: Gulf response, clean energy regulations, and a cap on carbon covering utilities and other sources of carbon emissions.

August recess continues to loom as an informal deadline for action on major legislation before the November elections. Senators are piecing together climate and energy legislation, but there are other bills to be addressed as well:

  • Passing the final version of Wall Street reform, which already passed the House 224-192.
  • Passing an unemployment package to send aid to thousands of jobless Americans. There are 59 votes in favor of passage, just one short of breaking the filibuster. Senator Reid's political calculus was altered significantly by Senator Robert C. Byrd's (D-WV) death.
  • Confirming Supreme Court nominee Elena Kagan.
  • The vacancy created by Senator Byrd's death is delaying action on a number of issues. Governor Joe Manchin (D-WV) is the key player in determining who will succeed Senator Byrd. Manchin said he would highly consider running for Senate when West Virginia holds an election to fill the vacancy, and is expected to appoint a political ally to fill Byrd's seat in the near-term.

Utilities Fighting for Clean Air Act Loopholes

New EPA rules for non-greenhouse gas pollutants from power plants are beginning to affect the climate bill negotiations. EPA's new Clean Air Interstate Rule (CAIR) requires power plants to further reduce their sulfur dioxide (SO2) and nitrous oxide (NOx) emissions starting in 2012, in an effort to reduce smog, acid rain, and other forms of air pollution. While a utility-only cap is looking likely, many utilities are asking the Senate to weaken existing SO2 and NOx regulations -- a move that is getting major push-back from public health groups. The EPA's new rules would yield more than $120 billion in annual health benefits in 2014, including avoiding premature deaths, heart attacks, acute bronchitis, and asthma according to Gina McCarthy, head of the EPA's air and radiation office. A new report by Navigant Consulting for Ceres found that utilities are already shifting their investments to energy efficiency, natural gas, and renewable energy with or without a climate bill, due to anticipated long-term regulations and the low cost of clean energy technology.

BP Gulf Disaster - Day 84

BP announced efforts to install a tighter cap on the damaged deep sea well head. The current "loose-fitting cap" is only capturing 15,000 barrels per day, while leaking 35,000-60,000 barrels per day. The tighter cap can potentially capture as much as 80,000 barrels per day and improves the chances of successfully plugging the well from the bottom by injecting mud and cement through a relief well. BP says their first relief well will intersect the original well by the end of July, and hopefully plug the leak permanently in August.

The Fifth Circuit Court of Appeals rejected the Obama Administration's appeal to reverse the ruling of Judge Martin Feldman regarding the 6-month ban on deep-water offshore drilling. The Interior Department said that the ban is necessary to implement new safety and environmental regulations for deep-water drilling rigs.

Senator Bernie Sanders' (I-VT) amendment to suspend billions of dollars of subsidies for oil was voted down 35-61 just weeks ago. However, a bill co-authored by Senators Menendez (D-NJ), Merkley (D-OR) and Nelson (D-FL) and another bill by Representative Earl Blumenauer (D-OR) would end $20 billion and $30 billion dollars (respectively) in tax breaks for oil production if passed. The American Petroleum Institute is launching a 10-state TV ad campaign to protect subsidies for the oil and gas industry they fear may be stripped away. In addition to receiving large subsidies, the industry's capital investments are taxed at an effective rate of 9%, far lower than the overall rate of 25% for businesses in general and lower than virtually any other industry according to the Congressional Budget Office (CBO). The oil and gas industry spent over $154 million lobbying Congress last year, a new record for the industry.

Prepared by Jason Kowalski and Gabe Elsner from the 1Sky Policy team. Please direct questions or comments to

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