Democratic Leaders Poised to Sabotage Hope for Renewable Energy
Last Thursday, Democratic leaders Nancy Pelosi and Harry Reid said that they would jettison the renewable energy provisions in both the House and Senate versions of the 2007 energy bill in the interest of passing a bill before the Thanksgiving recess begins on November 17.
Republicans have been holding up action on the bill for months now, refusing to participate in conference committee meetings to reconcile the House and Senate versions. The big sticking points for Republicans have been support for renewable energy and ending billions of dollars in subsidies for oil companies. Democrats would like to use the oil subsidy money to support solar and wind power.
Representatives of the renewable energy industry were dismayed by the Democrats' abandonment. "This is basically Congress delivering an early Christmas present to the American public -- and it's a lump of coal," said Rhone Resch, president of the Solar Energy Industries Association (SEIA). "We are feeling disgusted because this energy bill goes right back to maintaining the status quo."
The renewable energy provisions in the bill come in two forms: a Renewable Electricity Standard that requires utilities to supply 15 percent of their electricity from renewable sources like solar and wind, and tax provisions, including a production tax credit for wind power and a tax credit to encourage investment in solar power equipment.
While the Renewable Electricity Standard would be a new federal program (31 states already have some kind of renewable mandate), the tax incentives for solar and wind would continue programs already in place. Losing these tax breaks would be devastating to the renewable energy industry, said solar lobbyist Scott Sklar of the Stella Group: "It will cause sales and investment to implode."
By giving up on renewable energy, lawmakers are losing an opportunity to increase energy security and strengthen the economy. Last week the American Solar Energy Society released a report on the economic benefits of investment in renewable energy, finding that major investments in renewables and energy efficiency retrofits could produce 40 million jobs and generate $4.5 trillion in US revenue by 2030.
The latest turn in the energy bill would actually force the country a few steps backward. Scott Sklar said that unlike in past years, there is little chance that the renewable tax incentives will be attached to another bill for passage this year.
If those tax incentives are lost, Americans will feel the pain quickly. Randall Swisher, head of the American Wind Energy Association said that the rapid growth of the American wind industry would go into a stall. "Getting into 2008, we will start to see uncertainty creep in in terms of getting projects financed and, even more importantly, attracting manufacturers to this country, bringing with them the jobs that are a critical part of what this industry can deliver for the future of this country," said Swisher.
The Renewable Electricity Standard (RES) was one of the provisions that passed only in the House version of the energy bill. Some Republicans, along with President Bush, have strongly opposed the mandate. Senator Domenici, ranking member of the Senate energy committee, cited complaints from utilities in the Southeast that they lacked renewable resources required to meet a 15 percent standard, but renewable energy experts say it won't be that challenging.
Domenici and some other Republicans want to keep the current state-by-state approach. They say it makes the most of regional differences in renewable resources. Scott Sklar warns that a strictly regional approach would shrink the potential of renewable energy.
"If the goal is to build a national, sustainable set of clean energy industries, the entire US market needs to be included," Sklar said. "Blending tax credits, an RES and national interconnection standards is the core government tool box to accelerate and enhance these technologies and build these industries. With energy imports increasing, prices increasing, climate change emissions increasing, our electric infrastructure aging, now is not the time to balkanize energy efficiency and production, but [to] set goals and nurture new technologies and new markets."
Republican maneuvers to kill the energy bill also came to light last week when Senator Domenici introduced a pair of amendments to the farm bill now being debated in the Senate. Domenici wants to migrate two of his favored energy provisions -- the ethanol mandate and $50 billion in nuclear power loan guarantees -- into the more viable farm bill. The loan guarantee title is called "loan guarantees for renewable fuel facilities," and never mentions nuclear power specifically. Dave Roberts, a writer at the green magazine Grist, called the move "sneaky."
With agribusiness lobbying hard for it, transferring the ethanol mandate to the farm bill would weaken bipartisan support for the energy bill. Senate Majority Leader Harry Reid told reporters last week that the language should stay in the energy bill and that Democrats were going to "do an energy package separate from the farm bill."
With the Democratic leadership willing to sacrifice renewable energy provisions to pass an energy bill, what will be left? One controversial provision that may make it to the final bill is a watered-down version of the Senate's auto fuel efficiency standard. This provision has a lot going for it politically.
First, it has the support of President Bush and many Republicans. In an October 15 letter to Speaker Pelosi, Bush outlined a framework for an energy bill that would get his support. It would not include a Renewable Electricity Standard, but it would "reform and strengthen the fuel economy standard for cars."
In the letter, Bush then goes on to spell out the loopholes he wants inserted into a fuel economy standard. There must be separate standards for cars and light trucks (no holding SUVs to high standards) and there must be a cost-benefit analysis safety valve.
Fuel economy for cars is also polling very well. A bipartisan poll conducted last week found that voters connect better fuel efficiency with national security. Pollster Mark Mellman said: "The overwhelming support for CAFE standards cuts across all the traditional demographics in this country." Overall, 86 percent of voters said they support requiring automakers to increase fuel economy -- 90 percent of Democrats, 83 percent of independents and 83 percent of Republicans. Only health care costs and the Iraq war show similar levels of concern at 79 percent and 72 percent respectively.
Passing a weak fuel economy standard may let both the parties say they have done something about energy security, but it won't do much to build a renewable energy economy for the future.
But some Democrats are still willing to fight for the renewable energy provisions. Colorado Congressman Mark Udall said that he will meet with Speaker Pelosi this Wednesday about the energy bill.
Judith Kohler, writing for The Associated Press, reports that Udall believes support for renewable energy is a more important priority for the energy bill than increasing the CAFE standard. He is also meeting with senators to share his experiences with Colorado's successful Renewable Electricity Standard and to reassure senators from Southern states that energy experts believe they will be able to meet a Renewable Electricity Standard.
Udall is co-chair of the Renewable Energy and Energy Efficiency Caucus in the House. Referring to his work on the House version of the energy bill that passed last August, he said, "Those of us who fought really hard in August are not going to rest until the final decision is made."