Should Waxman and Markey have kicked off House climate-bill negotiations with a stronger ask?

The bill they introduced was effectively the U.S. Climate Action Partnership proposal, which already reflected years of negotiation and compromise. The idea was that the difficult work of negotiations had already been done -- enviros and business both on board! -- and it would be easy for conservative Dems (and a few Republicans) to sign off on it.

Of course that's not what has happened. Republicans are balking en masse. Conservative Dems have compromised the bill down further, and by all indications will further weaken it in the Senate. Could the bill have ended up in a stronger place if it had started in a stronger place?

The counterargument is that the "green" side just didn't have much leverage. Without sticks, all they had were carrots -- more giveaways, more offsets.

One stick they did have was the threat of EPA greenhouse-gas regulations. There was a lot of talk about this when Dems first won their majorities but very little once negotiations actually got underway. Nobody is brandishing the stick.

Rep. Rick BoucherCould it have made more of a difference? Some recent comments from Rep. Rick Boucher (D-Va.) are intriguing in this regard. In an interview with the Kingsport Times-News, Boucher was candid about his motivation for negotiating with Waxman:

Boucher stressed his interest in climate change has not been driven by a moral belief to control greenhouse gases. [Paging Times-News editors: You awake over there? What is a moral belief to control GHGs?]

What is driving his involvement, said Boucher, is the U.S. Supreme Court determined two years ago that greenhouse gases are pollutants.

“As a consequence of that decision, the Environmental Protection Agency is, for all intents and purposes, effectively required to regulate greenhouse gases,” Boucher said. “The debate about whether or not we will have regulation is over. So the only question is will EPA regulate or ... will we have congressional regulation that does balance economic effect against environmental effect? Given that choice, industry would rather have Congress do this. Industry needs and wants a bill to pass.”

"Industry needs and wants a bill to pass" -- the words of the coal industry's most dogged and effective spokesperson.

So there was leverage. It was used to get Boucher to the table. But once he was there, it went out the window. Not once in the process has industry been forced to face an ultimatum or bargain away a key position. They've been relentlessly wooed, but rarely challenged. They've been able to talk out both sides of their mouths, offering tepid, nominal support while bulldogs like the Chamber of Commerce, National Association of Manufacturers, and the Edison Electric Institute attack and weaken the bill.

And Boucher got just about everything he wanted for Big Coal:

The Southwest Virginia congressman said he spent more than six weeks helping to rewrite the draft bill to help coal-powered utilities and coal producers in his district.

He pointed to “four key things” inserted in the bill.

First, Boucher said, was making sure emission allowances were assigned for free and not put up for auction by the federal government.

“That helps to keep electricity prices affordable and strengthens the case for utilities to continue to use coal,” he said.

Secondly, Boucher said the bill now includes 2 billion tons of carbon offsets available to industrial emitters to help them satisfy their reduction obligations.

“That means an electric utility burning coal will not have to reduce the emissions at the plant site. It can just keep burning coal,” he explained.

The third provision is a $1 billion per year special fund to develop carbon capture and sequestration technologies for controlled disposal or storage.

In the fourth provision, there is another special fund created to deploy the carbon capture and sequestration technology.

“Carbon capture and sequestration attached to coal still makes coal the cheapest fuel,” Boucher asserted.

These are the key -- some argue fatal -- weaknesses of the bill. They were put in to woo an industry that "needs and wants a bill to pass."

One other thing to note:

[Boucher] said lawmakers have “no political will” to mandate the EPA to do a cost-benefit analysis on climate change legislation.

Strictly speaking, this is false. The EPA has done detailed cost-benefit analyses of ACES. (It's going to be cheap, they say.) If Boucher is talking about the dipshit lawsuit the Chamber of Commerce is pushing, he's drifting into "death panel" territory.

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Cross-posted from Wonk Room.

“Why did Rick Boucher vote to kill Virginia jobs?” Newt Gingrich’s coal-powered front group, American Solutions for Winning the Future (ASWF), asked this incendiary question of the coal-district Democrat in a full-page advertisement in the Roanoke Times. The ad, acquired by the Wonk Room, claims Boucher voted “for new energy taxes on every Virginian” when he supported the Waxman-Markey American Clean Energy and Security Act (H.R. 2454) in the House energy committee last month. ASWF goes on to cite terrorizing statistics about “Boucher’s new energy tax”:

Boucher’s new energy tax would:

1. Kill 1,105,000 American jobs per year on average

2. Increase electricity rates 90%

3. Increase gas prices 74%

4. Increase an average family’s annual energy bill by $1,500

5. Send U.S. jobs to China and India

These figures are drawn from a repeatedly discredited study by the Heritage Foundation, who used an unrealistic economic model to examine the effects of a cap-and-trade system that does not resemble the comprehensive clean energy provisions of Waxman-Markey. In reality, independent experts from the Congressional Budget Office and the Environmental Protection Agency have found that the clean energy legislation will:

– Decrease electricity bills 7 percent

– Improve the budgets of the poorest 20 percent of Americans

– Cost between 22 to 48 cents a day for the average American household

– Cut global warming pollution and oil dependence

And these studies didn’t even take into account the economic benefit of averting catastrophic climate change. Furthermore, creating powerful standards for global warming pollution and clean energy create good American jobs, not kill them. Boucher’s vote was a down payment on a national investment in renewable energy and energy efficiency that would dramatically reduce U.S. global warming pollution, would create 45,000 jobs in Virginia, and create 1.7 million jobs every year.

ASWF’s attack exposes the conflict occuring within the American energy industry. From his perch in the energy committee, Boucher won significant concessions on behalf of the coal industry in the legislation. Some companies — like the coal-powered utilities Dominion Resources, American Electric Power, and Duke Energy — recognize that the United States must pass comprehensive climate legislation now, and have heralded Boucher as a champion of their interests. However, Peabody Energy, the world’s largest coal company, is bankrolling the dishonest attacks of Gingrich’s group and the National Mining Association.

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We saw how years of accumulated habit, chummy political relationships, and a regulatory model that all-but mandates big central power plants have left coal utilities betting their futures almost entirely on "clean coal." They've told their legislators that it's the only way to go low-carbon in the South and Midwest. Their legislators, who have long seen themselves as defenders of coal, aren't hard to convince.

Take "moderate" Democrat Rick Boucher of Virginia. He knows "clean coal" is at least a decade away from serious deployment, but he also knows (or thinks he does) that coal-dependent regions can lower their carbon emissions only insofar as "clean coal" happens. So from his point of view, serious mandatory emission reductions need to be put at least ten years out in the future. In the meantime, he wants money shoveled at utilities to pay for "clean coal" R&D.

It isn't a conspiracy. Boucher is quite open about the fact that his goal is to allow coal utilities to do what they're doing for at least another ten years, allowing the companies to buy carbon offsets to meet short-term targets. He says so (watch about 1:25):

That's what Boucher's been pushing for during negotiations over Waxman-Markey: softer short-term targets, free pollution permits, and more offsets. All that -- along with the goodies secured in the first round and the supplementary goodies proposed in other legislation -- is in service of the same goal: give coal utilities at least 10 years of cheap compliance so they have time to develop "clean coal." (Most of what Boucher wanted, he got.)

This perspective also explains Boucher's resistance to the original bill's tough Renewable Electricity Standard. He's convinced that any option but "clean coal" will be wildly expensive and drive up rates, so he wants a softer RES target too, and more room for efficiency under the RES. He got that too.

Boucher thinks coal protects his constituents by keeping their rates down, so he's there to defend coal. Anything that penalizes emissions hits coal the worst, so he's trying to minimize emission penalties and maximize R&D subsidies. That's what "moderate" means in energy politics.

(Of course now that Boucher has secured goodies for his favorite lobby, other legislators and committees will demand their spoils. Floor debate is going to be a feeding frenzy.)

But ... what if Boucher is wrong? What if he and his friends in the utilities are mistaken about their short-term prospects? More on that in part four of ... [fade in catchy theme song] ... Southern Utility Blues [sound of audience applause]!

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Capitol Police arrested 15 protesters outside the office of Rep. Rick Boucher (D-Va.) on Thursday as the debate over the Waxman-Markey climate and energy bill continued.

The protesters, from the Chesapeake Climate Action Network, held a sit-in outside Boucher's office to protest his role in getting more support into the bill for coal. Boucher, who represents a coal-heavy region of southern Virginia, has been a key player in getting billions in incentives for coal into the bill, as well as weakening some of its standards. The protesters blocked the doors to Boucher's office, holding signs that read "No more coal" and singing a modified version of "We Shall Overcome."

CCAN director Mike Tidwell, a Grist contributor, was among those arrested. "This is a climate mugging of the American people," said Tidwell before his arrest. "Waxman-Markey is becoming a coal industry welfare bill." (See Grist's breakdown of where green groups stand on the bill.)

A spokesperson for the organization said the protest, which comes on the last day of debate of the Waxman-Markey bill in the Energy and Commerce Committee, is not really about the bill itself or the markup process to date.

"It's really a statement about Boucher and the leadership he has assumed in gutting the bill and giving billions of dollars to polluters," CCAN communications director Anne Havemann told Grist after the protest.

Boucher has been very open throughout the process about his talks with coal companies about the bill. "In the course of conducting other negotiations, I have had continued conversations with coal companies, both locally and nationally, including the chief executive officers of CONSOL ... which operates the largest mine in Southwest Virginia, and Michael Quillen, the chief executive officer of Alpha, which is our region’s largest coal producer," Boucher said recently. "I have been in discussions with Mike Morris, the chief executive officer of AEP, and Tom Ferrell, who is chief executive officer of Dominion, which is Virginia’s largest electricity supplier."

But Boucher hasn't made himself quite so accessible to foes of coal, prompting the sit-in today. "He doesn't meet with groups like us," said Havemann. "We've tried for months."

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Who is behind the push for "clean coal"?

Seems like it ought to be simple, but it's not. Take a look at this list of members of the "clean coal" front group ACCCE. There are effectively three lobbies: producers, utilities, and legislators.

Producers' interest in "clean coal" is obvious: they want to sell more coal. Big hitter Peabody (who was all up in the G.W. Bush administration) dropped some $8.4 million on lobbying in 2008, to say nothing of generous direct contributions to Reps. John Shimkus (R-Ill.), Joe Barton (R-Tex.), and Rick Boucher (D-Va.).

Then there are the southern and midwestern utilities. Their interest in "clean coal" is more interesting, though no less generous. The biggest utility in the country, American Electric Power out of Ohio, was the largest single contributor to both Republicans and Democrats in 2008. Southern Co. out of Atlanta, the second largest U.S. utility, dropped $14 million lobbying in 2008.

Graph: OpenSecrets.org

Check out what it pulled in 2003:

Southern Co. hired a new congressional lobbyist this week, and a Washington-based environmental group is crying foul.

The lobbyist is John Pemberton, chief of staff of the division of the federal Environmental Protection Agency that delivered a key Clean Air Act victory last week to the nation's coal-fired utility industry, led by Southern Co. [my emph.]

Ballsy. But Southern's been managing politicians for years. In fact, when it comes to regulated utilities like Southern, you could say that regulator management is its business model. A regulated monopoly can't go out of business and its profits are guaranteed; these are not conditions that foster innovation. For decades, utility executives have profited by maintaining a steady course. A recent Atlantic story called "Do CEOs Matter?" contains this gem:

[The CEO] doesn’t make much difference at electrical-utility companies, which are so constrained by government regulations and the cost of fuel that there’s very little room for the CEO to exercise any discretion. The professors used the term “Titular Figureheads” for such CEOs.

With reach across the Southeast, Southern has large stable of old, dirty coal plants grandfathered under the Clean Air Act, cranking out more pollution than those of virtually any other U.S. utility. It's been in the business for going on 90 years, doing what it does best: building and running large, remote coal power plants and selling as much of the juice as possible. Indeed, that's what the regulatory framework mandates, what it has always mandated.

Enviros have occasionally forced it to do some cleanup. It's had to stick pollution reduction gizmos on its smokestacks and water discharge systems. But nothing has threatened its basic identity like climate change (the existence of which it denied for many years). The easiest defense, the one that best protects the status quo, is installing a new pollution reduction gizmo and calling it good. "Clean coal" is the latest gizmo, or at least the industry desperately wants it to be.

Southern is not one of these newfangled "decoupled" utilities: it makes money by deploying capital, building plants, and selling power. That is what it knows. And when all you have is a pollution scrubber, everything looks like a smokestack. The only way it can imagine itself in a low-carbon world is by taking the carbon out of what it does now:

... compared to the energy sector as a whole, the company's commitment to alternative techniques has been modest. Leonard Haynes, Southern's executive vice president in charge of such alternatives, says that when it comes to renewable energy, the company is putting its main effort into biomass while "focusing on finding niche opportunities for wind and solar."

"The best thing to understand," Haynes says, "is that the opportunities for renewables in the Southeast ... are not as great as in other areas of the country."

That's highly disputable, as we'll see later, but for now it's just worth noting that this is what southern legislators hear constantly from their very good friends in the utility world: there are no renewables in southern states and efficiency is a marginal contributor at best. The solution is give utilities like Southern lots of taxpayer money to build and deploy huge new (clean!) coal plants and fat new transmission lines.

The same message reaches lawmakers in heavy industrial states: until "clean coal" comes along, "low-carbon power" just means "more expensive power," which means "industries moving elsewhere."

So producers, utilities, and heavy industry agree: let's do more or less the same thing we've been doing, only with taxpayers giving utilities tons of money to build high-tech new plants. "Clean coal" is where it's at! If that's what a legislator hears day in and day out, how will he or she approach climate/energy legislation?

More on that in the next episode of ... [music swells] ... Southern Utility Blues [dramatic timpani]!

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“Key Dem backs Waxman climate bill” is how Politico reported this afternoon’s big breaking news.  Boucher is

… a coal-country Democrat whose support signals the backing of industrial state Democrats in the south and Midwest.

“I intend to vote yes and I intend to encourage all other members of the committee to do the same,” Boucher said.

Boucher has acted as a key negotiator for many Democrats on the committee, who feared that the new regulations could hurt hometown industries and consumers.

It is the man who replaced Boucher as Chair of the Energy and Environment Subcommittee who said made the Boyle comparison, Rep. Ed Markey (D-MA):

Boucher’s approval rebukes the months of “conventional wisdom” that had described the global warming bill as dead, and it helps lay the groundwork for passage in both the House and Senate, Markey said. “What we have in front of us now and we will next week is the legislative Susan Boyle,” he said, referring to the British amateur singer who shocked audiences with her professional voice last month.

How big a deal is this?  Big enough to make Energy and Commerce Committee ranking member Joe humans should just ‘get shade’ Barton eat most of his words in one 12-hour news cycle:

E&E News (subs. req’d) reported this morning:

“Cap and trade is dead,” Barton said. “It’s just dead. They’ve got to get the coroner to conduct the autopsy and make it official…. I don’t think they can get it out of committee.”

E&E News PM (subs. req’d) reported this evening:

Barton said. “He has a chance to get the votes. It is not a done deal.”

Barton estimated that there are roughly five to eight Democratic swing votes. “It is going to be a real close call,” he said.

Here are more details from the latter article on the floor schedule:

A spokesman for House Speaker Nancy Pelosi (D-Calif.) said it would be premature to commit to House floor action this summer. For now, Pelosi’s only stated goal is to ensure passage this year.

Not gonna say “told ya” (see Sen. Reid: “Health care is easier than this global warming stuff.” Las Vegas odds on bill in 2009 now longer shot than Mine That Bird).

That said, a House debate during the hot summer may make more messaging sense.

The aide noted that other committees — including Ways and Means — will write sections of the bill, and the elements would be merged into a “consensus package.”

…. “The piece of legislation that we in the Senate will look at is to see what they can accomplish in the House,” Reid said. “That’s important for us because the House has the same problems we have in the Senate with different special interest senators. I don’t say that in a negative sense — we have some states that are more dependent on coal, other states more dependent on other things. And we’re going to see what the House can do. If they can do it, we can do it.“

It’s looking more and more like the House can do it.

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