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E2 in Washington


On May 9 and 10, 18 E2 members met with 61 members of Congress and four members of the Administration during our fifth annual trip to Washington, DC. This very ambitious trip had four goals:

  • Support economy-wide mandatory carbon caps
  • Gain a better understanding of the politics in Congress on climate legislation
  • Advance specific energy legislation
  • Advance oceans legislation
E2’s 2007 delegation to Washington, DC: (left to right) Pamela Lesh, Jim Presswood (NRDC), Tony Bernhardt, Peter Liu, Tom Van Dyck, Bob Epstein, Teryn Hanggi (E2 Manager), Tedd Saunders, John Dawson, Paul Zorner, Nicole Lederer, Andrew Currie, Berl Hartman, Julius Genachowski, David Readerman (kneeling), Dan Abbasi, Joel Serface, Eileen Donahoe, April Mo (E2 Associate), Wendy Neu, Karen Wayland (NRDC), Roberta Elias (NRDC), and Bill Unger.

Differences Between This Year’s Trip and Last

It is obviously a very different Congress that is in place this year, with new leadership willing to place climate and renewable energy at the top of the agenda. We offer a few observations:

  1. New leadership - While the Democrats are now the leadership party and control which issues are brought to the floor, members of Congress are still driven by their home constituencies. As a result, the issues of fuel economy standards and the coal industry cross party lines and have only marginally improved over the last Congress.
  2. Difficulties of staffing up - The change in parties has caused a major shift in committee staffing, resulting in a learning curve as new people gear up for their new jobs.
  3. Multiple leaders but no emerging consistency - There are multiple champions for the issues of climate and energy, but there is no consensus on what steps to take. This is due in part to the fact that Congress has only been in session for five months with new leadership, but it is also due to a lack of coordination.
  4. Iraq takes priority - The debate over funding of the Iraq war has consumed much of the energy in Congress. Several people in leadership, including Speaker Nancy Pelosi (D-CA) and Congressman George Miller (D-CA), told us they expect the House to take up energy policy once the Iraq funding issue is resolved.
  5. Business has spoken - Nearly everyone we met with is aware of the major shift in U.S. businesses supporting a cap on global warming pollution. Groups like USCAP and company initiatives like Wal-Mart’s were frequently mentioned.
  6. Cleantech - The growth of the cleantech industry is playing a larger role. E2 released a major report on the relationship between public policy and increased investment in cleantech that we distributed at every meeting.


Our Meetings

Our 18 E2 delegates were divided into three groups and held 48 individual legislative meetings over two days. We also had four meetings with members of the Bush Administration. In addition, the whole delegation participated in two group meetings - one hosted by Senator Ron Wyden with eight Senators and staff from additional offices in attendance; and one hosted by Congressmen Brian Baird and Jerry McNerney with nine House members or their staffs in attendance. We owe a big debt of gratitude to Senator Wyden and Congressmen Baird and McNerney for their endorsement and for dedicating their office staff and resources to organizing these meetings.

"The E2 message that a clean, healthy environment is good for our economy and our quality of life is now resonating powerfully in the halls of Congress. One Senator after another has mentioned to me how much they learned at E2’s recent briefing for them on key environmental issues."
- Senator Ron Wyden
"Collaboration between the public and private sector is crucial if we’re going to develop new and innovative solutions and technologies to protect our environment for future generations. E2’s collaborative approach and tireless advocacy for policies and programs that protect our environment and our economy resonates with policy makers as we tackle these broad issues."
- Congressman Brian Baird
"E2 is a very effective advocate for a cleaner planet because its members are changing the way America uses energy and they know what they are talking about."
- Congressman Ed Markey
Senate House
Lamar Alexander (R-TN) *
Barbara Boxer (D-CA)
Sherrod Brown (D-OH)
Maria Cantwell (D-WA) *
Robert P. Casey, Jr. (D-PA) *
Norm Coleman (R-MN) *
Kent Conrad (D-ND) *
Christopher J. Dodd (D-CT) *
Byron L. Dorgan (D-ND)
Dianne Feinstein (D-CA) *
Amy Klobuchar (D-MN)
Carl Levin (D-MI) *
Richard G. Lugar (R-IN) *
Lisa Murkowski (R-AK) *
Bill Nelson (D-FL) *
Barack Obama (D-IL) *
Mark Pryor (D-AR) *
Ken Salazar (D-CO) *
Bernard Sanders (R-VT)
Debbie A. Stabenow (D-MI)
Ted Stevens (R-AK) *
Jon Tester (D-MT)
John W. Warner (R-VA) *
Sheldon Whitehouse (D-RI)
Ron Wyden (D-OR)
Brian Baird (D-WA)
John Barrow (D-GA) *
Mary Bono (R-CA) *
Madeleine Z. Bordallo (D-GU)
Rick Boucher (D-VA)
Benjamin L. Cardin (D-MD)
James Clyburn (D-SC)
Lloyd Doggett (D-TX)
Mike Doyle (D-PA) *
Sam Farr (D-CA)
Michael A. Ferguson (R-NJ) *
Jim Gerlach (R-PA) *
Stephanie Herseth (D-SD)
Darlene Hooley (D-OR) *
Jay Inslee (D-WA)
Steve J. Israel (D-NY)
Tom Lantos (D-CA)
Sander M. Levin (D-MI) *
Dan Lipinski (D-IL)
Dave Loebsack (D-IA) *
Edward J. Markey (D-MA)
Jerry McNerney (D-CA)
George Miller (D-CA)
James L. Oberstar (D-MN) *
Frank Pallone, Jr. (D-NJ)
Ed Perlmutter (D-CO)
George P. Radanovich (R-CA)
Rick Renzi (R-AZ)
Michael J. Rogers (R-MI) *
John T. Salazar (D-CO) *
Carol Shea-Porter (D-NH)
Hilda L. Solis (D-CA)
Peter Welch (D-VT)
Administration  
Samuel Bodman, Secretary of Energy
David Bohigian, Assistant Secretary of Commerce
Lisa Epifani, Special Advisor to the President
Mike Johanns , Secretary of Agriculture*

* indicates staff meeting
 


Meetings with the Bush Administration

In the five years that we’ve been working in Washington, DC, the vast majority of our meetings have been with members of Congress. A very productive meeting at the Department of Commerce last year was one exception. This year we welcomed the opportunity to meet with several additional Administration officials with broad authority in our areas of interest.

Our meeting with Jeffrey Kupfer, Chief of Staff at the Department of Energy focused on supporting DOE’s petroleum reduction plans and investments in research around cellulosic ethanol biorefineries, requesting the issuance of equipment and appliance energy efficiency standards long under consideration by the DOE, and asking DOE to prioritize alternative fuels with low carbon lifecycles (unlike current liquid coal technologies). We were happy that Secretary Bodman made a point of meeting and greeting our delegation toward the end of this meeting.

The Department of Agriculture provided another perspective on energy and carbon issues. In our meeting with Chief of Staff Dale Moore and Deputy Undersecretary Douglas Faulkner, our objectives were to push for the inclusion of sound environmental practices in the upcoming reauthorization of the Farm Bill, discuss on-farm energy (and income) generating practices, and promote a low-carbon fuel standard for the production of biofuels. We discussed the potential for growing region-specific energy feedstocks in almost every state, and providing benefits to farmers who produce renewable energy on their lands and reduce farm-generated carbon emissions. We were encouraged to hear from Mr. Moore that farmers are eager to enter the carbon market and are waiting for a carbon price to be set in order to participate in carbon credit trading - putting us in agreement on one of the advantages that national carbon caps would provide.

"The Commerce Department and Environmental Entrepreneurs both agree that we must protect the environment while building our economic prosperity. Working with Nicole and members of E2 to develop solutions and share ideas has been beneficial. It is fitting that the Commerce Department, the voice of business in government, has such a close relationship with E2, the business voice for the environment." - David Bohigian"
We’ve come to regard David Bohigian, Assistant Secretary of Commerce, as a strategic ally. In our first meeting with him last year we discussed the swiftly developing market for clean technologies to address environmental challenges, both in the U.S. and abroad. In the intervening year we stayed in touch with his office as the Global Warming Solutions Act in California created a major new market and set of incentives for carbon-reduction products. In a great example of swift government response to new economic opportunities, when we met with him this year Mr. Bohigian had just returned from organizing and hosting the first ever Department of Commerce Green Trade Mission to India and China (to which E2 members running cleantech companies were invited). David has shown commendable leadership and foresight in creating channels for the export of U.S. green technologies. We were heartened that he, too, indicated that federal mandatory carbon caps were a possibility under this Administration.

Finally, in our closest meeting to the Oval Office yet, we met with Special Assistant to the President for Economic Policy, Lisa Epifani, who covers domestic energy issues. Prior to coming to the White House, Ms. Epifani was majority counsel for the Senate Energy and Natural Resources Committee on electricity, oil and gas issues. Because our E2 delegation did not fit the familiar model of industry-specific, professional lobbyists, our objective in this meeting was to establish E2 as a resource for the White House in the broad area of intersection between economic and environmental issues.

The Washington law firm of Hogan and Hartson, LLP, arranged our meetings with the DOE, the USDA and the White House. We want to thank Hogan and Hartson Partners Doug Beresford, Mary Anne Sullivan and James Wickett for providing introductions and assistance in scheduling these meetings, as well as offering their knowledgeable perspectives in preparing for our discussions, on a pro-bono basis.

OUR ISSUES

Climate and Energy

With seven different climate bills in Congress, we did not choose to endorse a single bill, but rather to support the principle of a national standard for carbon emissions. We promoted this position with documentation of the market opportunities being created by global warming legislation in California, original research on the developing clean technology sector, and a letter signed by 103 members of the venture capital and investment communities supporting carbon caps as a stimulus to private equity investment.

In addition to our general support for carbon caps, we promoted specific energy bills on efficiency, fuel economy, renewable energy and a low-carbon fuel standard. The bills we support include:

  • National renewable electricity standard - House bill: Udall-Platts (HR 969); Senate bill: Bingaman RPS - Sets a national renewable electricity standard which requires 20% (House bill) and 15% (Senate bill) of our electricity to come from renewables by 2020.
  • Tax credits for energy efficiency and renewable energy - House bill: EXTEND Act (HR 1385); Senate bill: Snowe/Feinstein (S 3628) - Extends tax credits for efficiency and renewable electricity beyond their 2007 expiration dates.
  • Fuel efficiency - House bill: Markey-Platts CAFE Bill (HR 1506); Senate bill: Feinstein (S. 357) - HR 1506 requires increased fuel efficiency for vehicles up to five tons of 27.5 mpg by 2012 and 35 mpg by 2018. It currently has 134 sponsors in the House. S. 357 increases efficiency to 35 mpg by 2020 and 4 percent annual increases thereafter. In fact there are 9 bills in Congress that consider fuel efficiency. See Joint Economic Committee Report for a listing of the bills.
  • National Low-Carbon Fuel Standard - Senate bill: Obama-Harkin - requires a reduction of about 180 million metric tons in emissions by 2020 by expanding the national renewable fuels standard, requiring fuel producers to reduce lifecycle emissions and utilizing a credit trading mechanism for fuel refiners.

Global Warming Legislation

While last year there was little discussion of global warming legislation, this year it was a topic in every meeting. It was fairly common for legislators to either have given their support to a specific bill or to say they were "carefully considering" the bills. It did become clear that there are at least two major obstacles to getting a meaningful economy-wide cap on global warming pollution through this Congress:

1. The details must be written into the legislation. In California, the global warming legislation was remarkably short ( 13 pages ). It stated the intentions of the legislature and left the details to the experts in the regulatory agencies to work out through their public processes and appointed boards. Congress has no intention of trusting the U.S. EPA to do the same. For example, it was common to hear that the Sanders (I-VT) bill was good, but lacked detail. It will take California about four years to work out the details to implement the CA Global Warming Solutions Act. Given this, it is difficult to see how Congress could design the details and complete a meaningful bill in the remaining 19 months of this session.

2. What role for coal? There are significant coal interests in many states and key committee chairs, including Representative Boucher (D-VA), who do not want to support a bill that does not include a role for coal in the future. As Representative Boucher (who is the subcommittee chairman for energy and air quality) explained to us, he views carbon sequestration as key to the coal industry’s future and to reducing its carbon footprint. Representative Boucher would not endorse legislation that requires sequestration before it’s a proven technology, as he believes that could put the coal industry at a serious disadvantage. There are many members of Congress on both sides of the aisle who share this view. E2 believes, however, that carbon sequestration is already well advanced.

There are three commercial carbon sequestration installations. The Sleipner Project in the North Sea injects one million tons of CO2 per year into a geological formation 800 meters below the sea bed and has been operating since 1996. The Weyburn project pumps CO2 from Beulah, North Dakota to Saskatchewan were approximately 2 million tons per year are injected into existing oil fields for enhanced oil recovery. The "In Salah" gas project sequesters one million tons of CO2 per year in Algeria and has been operational since June 2004. In the U.S. 20 to 30 million tons of CO2 per year are injected in to older oil wells for enhanced oil recovery. While no coal-powered plant has yet to start sequestering CO2, all of the technologic components have been shown to work in production so E2 believes the U.S. should move ahead with advancing policies. See the Intergovernmental Panel on Climate Change Carbon Dioxide Capture and Storage for details.

In many respects, our best path forward is to put the building blocks in place to start reducing global warming pollution while we work towards comprehensive legislation. This is already being done at a rapid pace in the form of energy policies in individual states, but it is time to do the same in Congress. We believe this will take the form of a significant energy bill that is very likely to happen in this Congress.

Energy Policy

A combination of increased energy efficiency, a national requirement for renewable electricity, and tax incentives for their installation into buildings would help lower overall electric demand and move us away from fossil fuels. We expect some combination of the existing bills will emerge, which will provide a serious advancement for efficiency in the electricity sector.

Transportation fuel is a more difficult problem. There will be an ongoing effort to raise fuel efficiency as most conversations, both in Congress and the White House, are focused on a 4%-per-year improvement. CAFE (corporate average fuel efficiency) standards are picking up new first-time supporters, including Representative Mary Bono (R-CA) and Senator Byron Dorgan (D-ND), among others. In addition, the California Clean Cars bill (AB 1493) is proceeding in 12 states, collectively representing over one third of the U.S. market adopting the regulations that will reduce global warming pollution from vehicles by 30% by 2016.

A looming risk is a movement in Congress to support the production of liquid transportation fuels derived from coal. Such fuels would result in double the global warming pollution of gasoline !

Coal vs. Corn

One could describe this conflict as coal versus corn. Vested interests in both commodities would like Congress to view their solution as a path to reducing the U.S. addiction to foreign oil. Currently, Congress is considering a series of measures - each one targeted to a specific technology. E2 sees this as both a curse and a solution. As the competing special interests lobby Congress, the way to break the logjam will be a technology-neutral solution - one that doesn’t pick winners or losers, but just establishes the rules for competition. A low-carbon standard for transportation fuels does exactly that.

A Low-carbon Fuel Standard (LCFS) rates each fuel by determining the amount of carbon emitted per mile driven. It measures the full lifecycle emissions from production through use, or from "well to wheels." An LCFS is currently being adopted by California, the European Union and the U.K. They are all using nearly identical methodologies, and major oil companies have endorsed the system because it creates a standard without dictating technology solutions. The Obama-Harkin bill tracks the California effort and would reduce the carbon content of fuels by 5% by 2015 and 10% by 2020. The combination of an LCFS and increased fuel efficiency would establish a foundation for addressing global warming in later legislation.


A Path to Climate Legislation


The political will and legislative knowledge exists in the 110th Congress to put together a meaningful energy bill that can address both electricity and transportation - our two largest sources of greenhouse gases. It is less clear that the knowledge exists to put together a meaningful, economy-wide cap on greenhouse gases. It is instructive to look at six major constituencies:

  1. Environment - The environmental community supports energy policy that reduces carbon emissions, and is wary of any attempt to produce a weak climate bill.
  2. Agriculture - The agricultural sector sees an opportunity in biofuels production and renewable energy to increase their income.
  3. Security - National security interests are very concerned about energy independence, but need to be guided not to choose alternative energy sources that would increase global warming pollution (i.e. coal to liquids).
  4. Coal - The coal constituents are the main blockers of climate policy. Coal needs to play a role in the future low carbon electricity sector and the ability to sequester the carbon from coal is the key. A growing number of coal interests are seeing the light as more states are banning long-term energy contracts with coal-fired power plants unless they deploy sequestration technologies (see State acts to limit use of coal power ). Thus the ability of the coal industry to block legislation may be limited. In addition, the environment and agriculture interests combined are a larger constituency than coal.
  5. Oil - The oil industry, including Shell, BP, Chevron and Connoco-Phillips, have all expressed interest in the LCFS approach. In many ways this industry could be up for grabs in the battle to get supporters for climate legislation.
  6. Business - The U.S. business community is increasingly on the side of an economy-wide cap on emissions. In fact, it may be the business community that ultimately pushes Congress to act, as it becomes demonstrable that a low-carbon energy future is an economic stimulus and will make U.S. industry more competitive in the global market.


Thus a solution to climate change could appear in three steps:

Step One: The states continue to drive innovation though state-based climate policies. This builds the technical capabilities of the U.S. Congress to adopt state-tested methods to strengthen energy policies by implementing stronger energy and fuel efficiency, a national renewable energy standard and accelerated research into carbon sequestration. A national LCFS emerges which provides a level playing field for reducing carbon in transportation - replacing the current system of picking winners and losers.

Step Two: Congress requires mandatory reporting from major emitters. Currently 31 states representing 70% of the population are involved in a joint effort to create a common way to report emissions by business entities (see " The Climate Registry "). This registry is expected to be compatible with the reporting mechanism required by California. Since several years of reporting data are needed before instituting a mandatory cap, Congress could proceed by adopting regulations based on this national registry and require mandatory reporting from major emitters.

Step Three: Congress adopts an economy-wide cap on global warming pollution.

Oceans

In the previous Congress, E2 was actively involved in the passage of the Magnuson-Stevens reauthorization bill (see E2 in Action for a description of the bill and E2’s efforts to promote its passage). Over-fishing, habitat destruction, government mismanagement, coastal development, and agricultural runoff have ravaged ocean ecosystems and created ocean "dead zones" where few life forms can thrive. Magnuson-Stevens deals with the restoration of species that have been over-fished, but this is only the first step. OCEANS-21 (Farr D-CA, Allen D-ME, Gilchrest R-MD and Saxton R-NJ) builds on the work of two national commissions on oceans to simplify the governance of the oceans and Great Lakes, and establish the National Oceanic and Atmospheric Administration as the lead agency for ocean governance. The bill has broad support and our sense is it can move in this Congress. Our efforts were to get co-sponsors in the House and to look for leaders in the Senate.


Our oceans, coasts, and Great Lakes are governed by over 20 federal agencies administering over 140 federal laws. In addition, the government implements countless other actions that affect ocean ecosystem function and productivity. As a result, the overall management of these waters is simply the haphazard sum of countless actions targeted to individual issues, regions, and species. We lack the common vision or responsible entity necessary to ensure that ocean and coastal ecosystems - and their highly valued resources - are protected and restored.

Improvements to the management of our ocean resources are contained in legislation (HR 21) introduced in the House by Representative Farr (D-CA) and others called OCEANS-21. There is no comparable bill in the Senate yet.

We also advocated for the United States to sign the Law of the Sea Treaty, which gives America a seat at the table in negotiating the management and security of international waters. Two days after we left, Senator Lugar, who chairs the Foreign Relations committee, and the White House issued statements to urge the Senate to ratify the treaty.

In Summary

Due to the confluence of several forces, E2 is now in a better position than ever to influence policy at the national level. The broad public acceptance of and concern about global warming, the ever sharper thorn of our dependence on foreign oil as it impacts our national security, and the emergence of clean technology as a major new industry sector have all combined to focus Washington on the need for transformative energy and resource management policies. In the course of this trip, E2 was invited to testify in the future before global warming committees in both the House and the Senate, and to engage more deeply in ongoing conversations with offices on the Hill and in the Administration.

We are very grateful for the support of the E2 community in our collective efforts to be the "business voice for the environment." It is a message that is now accepted in Washington and will play a deciding factor in future climate, energy and ocean policies. We close with some comments from the E2 delegation:

Pamela Lesh - "The teams E2 fielded were impressive on paper, but even more so in person and the interactions with Members and Staff were some of the best I have ever seen. My team’s interactions with the Hill left me with a clear impression that the question has shifted irreversibly from ’whether’ to ’what to do and how soon to do it.’"

Eileen Donahoe - "The most striking aspect of the trip was the wide range in the way each congressional office handled the meetings. Some had the expectation that we should provide very specific technological know-how. Others had barely heard of the bills we were discussing. Others were purely focused on the political means through which progress could be made."

Julius Genachowski - "I was pleasantly surprised by how far we’ve come - members of the Senate and House and their staffs are far more knowledgeable about the issues than they were in past years, and far more sympathetic with our goals. But I was disappointed to see how far we still have to go - a sense of urgency isn’t sufficiently widespread."

Peter Liu - It’s a ’new day’ in Congress, one that offers opportunities as well as challenges. Instead of little hope for action on key energy and climate legislation, there are now multiple competing proposals. Congressman Markey took a quote we said during our meeting with him directly to the floor (’Gas went up $1 under the previous Congressional leadership and we survived’)".

Wendy Neu - "I found this trip to be the most stimulating and productive. Members and staff in many cases were engaged, resulting in frank and substantive discussions of the issues. I came away with a much better understanding of the opposition and the intense lobbying members are getting from industry. In every case they asked for our help."

David Readerman - "The ’rate of forward environmental change’ from my 2003 trip to "the Hill" was most encouraging. Both political parties recognize that U.S. businesses are getting behind both cleaner and broader alternative energy solutions."

Tom Van Dyck - " Issues we care about - specifically global warming and renewable fuels - are developing very rapidly. Unfortunately, various elected officials fight for their constituencies by advocating for specific technologies rather than more broadly advocating to aggressively lower carbon releases over time and allow the market to pick the winners and the losers."

Joel Serface - "In my first trip to DC as an E2 member, I found most of the representatives and senators hungry for information that we were delivering. Our real-life, front-line, business-oriented view on what needs to happen to spur innovation and investment into renewable energy seemed to be refreshing to most everyone we met with. What was especially rewarding was to hear Rep. Lloyd Doggett (D-TX) was not only up to speed on all of our issues, but also wanted additional support from us in a number of areas."

Bill Unger - "This year the good news is everyone we met knew they needed well articulated positions on Global Warming and Energy Efficiency. Coal is the key industry we have to engage with, as the truth is, without an answer for coal, there is no way to pass long term meaningful legislation. Meeting with numbers of Senate offices, it was also clear that the Senate is less organized than the House, and is in need of powerful leadership to make something happen."

Berl Hartman - "This year’s visit felt very different than any other one I’ve been on. I could sense the change in attitude. Members were hungry for our information and our perspective."




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