Energy and Global Warming New for Novermber 13: Energy industry gives heavily to Senate Finance panel; UK PM to attend Copenhagen

Energy industry well acquainted with Finance panel members

Oil and gas companies and electric utilities over the past two decades have poured $8 million into the campaign coffers of lawmakers on the Senate Finance Committee who could now look to shape climate legislation.

Senators on the committee also have received campaign money from other segments of the energy industry that would be affected by a sweeping climate and energy bill, including wind, solar, coal, nuclear power, steel manufacturing and the forest and paper industry.

All told, those likely to be affected by climate and energy legislation for the current election cycle have given nearly $390,000 to Democrats on the Finance Committee and nearly $251,000 to Republican members, an E&E analysis of campaign contributions shows.


Chairman Max Baucus (D-Mont.) has indicated the panel will likely rewrite and vote on the portion of the climate bill that caps carbon emissions and lets businesses buy and sell emissions permits. Any rewrite would affect a broad cross-section of businesses now giving contributions.

“Companies have a lot to win or lose with legislative outcomes, and they are clearly positioning themselves to be winners,” said Tyson Slocum, director of watchdog group Public Citizen’s energy program.

“It’s all an effort to get access,” Slocum added. “That’s what making campaign contributions provides you, is enhanced access with members of Congress. It doesn’t guarantee outcomes but it increases your odds of being able to influence the outcomes.”

The Finance Committee has jurisdiction over much of the structure of a cap-and-trade program including how much companies will be able to bank emissions permits in one year and use in another, and whether free permits given to companies could be turned into a kind of security that could be bundled and sold like mortgages, said Kenneth Green, resident scholar at the American Enterprise Institute.

Baucus has said he might want to look at how any free greenhouse gas emission allowances would be doled out to regulated industries.


“There are two reasons for a company to donate,” to a political campaign, Green said. “One, they are hoping to make a profit either selling carbon credits, or having their competitor disadvantaged. Or, two, they are staring high costs in the face and they want to get something in the bill to reduce the costs.”

The Finance panel is one of the most powerful on Capitol Hill, and a good portion of those on the committee have been in the Senate at least 20 years, the time period over which the oil and gas industry has given a combined total of at least $5.6 million to those now on the committee, according to data from the Center for Responsive Politics. Electric utilities gave at least $2.4 million during that same period.

Lincoln, Grassley are tops

Of all those on the Finance Committee, Sen. Blanche Lincoln (D-Ark.) has received the most money from companies and trade groups with an interest in climate legislation in this campaign cycle. A third-term senator who this summer became chairwoman of the Agriculture Committee, Lincoln is one of five committee members up for re-election. A moderate Democrat, she is also considered a key swing vote on the climate bill.

For the 2010 campaign, Lincoln has taken in $195,796 from 72 different energy interests. In comparison, she has received $242,250 from companies and groups with stakes in health care legislation — another major issue that goes through the Finance panel.

The energy contributions came from diverse sources. Southwestern Energy Co., an oil and gas exploration company, gave $10,000, as did Koch Industries Inc., which has an oil refining arm and a paper mill business among others businesses. Lincoln also received $6,444 from the American Wind Industries Association, a trade group for wind energy businesses.


“Senator Lincoln is aggressively preparing for a competitive election cycle so it is not too surprising that she ranks No. 1,” said Steve Patterson, Lincoln’s re-election campaign manager. “All campaign contributions aside, the senator knows that she will be accountable to Arkansas voters come Election Day.

“That means that as she considers climate change legislation, she must merge the interests of traditional energy sources in Arkansas like oil and natural gas with emerging new energy industries in the state like wind and biofuels,” Patterson added. “Also, she will weigh the impact of climate change policy on significant agricultural sectors in Arkansas such as rice, cotton and livestock. Nearly 25 percent of the state’s economy is dependent on agriculture. Her primary objective will be to help develop a clean energy policy that creates economic opportunity for Arkansas.”

Of the Republicans, ranking member Chuck Grassley (R-Iowa) received the most, with $128,500 in contributions from 52 different sources. During the same period, he received far more from health interests, a total of $228,800.

Grassley’s biggest energy contribution came from Koch Industries, which gave $15,000. Oil and gas refining company Valero Energy Corp. gave $10,000. Atlanta-based utility Southern Co. and International Paper Co., the largest pulp and paper company, each gave $8,500.

“Senator Grassley accepts contributions that are legal and that come with no strings attached,” said Grassley spokeswoman Jill Kozeny.

Grassley has shown some reticence about cap and trade, at least as it appeared in the House bill, and this summer said that he would prefer a much broader international response to the climate issue.

“You’ve heard me say that I’m very cautious on cap and trade unless it comes — or, let’s put it this way, not use the term cap and trade, but use the term global warming, I’m very much thinking that needs to be done on international treaty so that it levels the playing field between the United States and China,” Grassley said.

Utilities give big

Electric utilities, though happier than oil and gas companies about the Kerry-Boxer bill, still are lobbying for changes in the cap-and-trade language.

Environment and Public Works Chairwoman Barbara Boxer (D-Calif.) included identical language to the House version in her chairman’s mark that gave 30 percent of free pollution permits to state-regulated local electric-distribution companies, although from a smaller overall pie (E&E Daily, Oct. 29).

Those allowances must be used to benefit consumers. Edison Electric Institute, the association representing electric utilities, in a recent interview said that it wants that share of free permits increased to 40 percent.

EEI also advocates having utilities receive those free permits for a longer period. Under the Kerry-Boxer bill, investor-owned utilities and smaller local distribution companies would see their free credits zero out in 2030.

As one of the biggest electric utilities, Southern Co. in this election cycle was one of the largest contributors to the campaigns of lawmakers on the Finance Committee. Southern Co. gave a combined $16,500. Of that, Grassley received $8,500, Lincoln took in $5,500 and Sen. Mike Crapo (R-Idaho) received $2,500. All three are up for re-election.

“Our objective is to support candidates who understand issues that are important to Southern Company’s customers, employees and shareholders,” said Jason Cuevas, a Southern Co. spokesman. “Contribution decisions are made by our employee-elected PAC board and are not are not based on party affiliation or incumbency.”

Southern Co., Cuevas said, wants the cap-and-trade program timetable to match up with available technology. It wants a limit on how high allowance prices can go and wants to ensure that companies can buy offsets for projects that reduce carbon, in lieu of paying for permits to cover carbon emissions.

“As the legislative process continues, we will communicate our views to policymakers working on this issue that climate legislation should contain provisions that help control costs in reasonable, effective ways to minimize impact to our customers, Cuevas said.

Gordon Brown to attend Copenhagen climate change conference

Gordon Brown confirmed today that he will attend the UN climate change summit in Copenhagen next month after the Danish prime minister, Lars Lokke Rasmussen, issued invitations to 191 world leaders.

Brown was the first world leader to announce in September that he was ready to go to Copenhagen to help secure a deal. He will be hoping that other prime ministers and presidents — particularly Barack Obama — follow his lead and go to the Danish capital.

The prime minister and other world leaders are expected to attend the final days of the two-week summit on 17 and 18 December, when he hopes that political agreement will be reached on a post-Kyoto framework for reducing the carbon emissions blamed for global warming.

Brown’s spokesman announced today that he had accepted Rasmussen’s invitation, adding: “Although there is much to be done in the next 30 days, clearly this is one of the issues which is top of the prime minister’s mind at the moment.”

He said Britain has accepted that it will not get the legal treaty on carbon cuts that Brown was initially hoping for at Copenhagen, but believes that a political agreement leading to a clear timetable on a legally binding deal would be “from our point of view, a result”.

Obama said on Monday that he will attend the summit if he believed “we are on the brink of a meaningful agreement and my presence in Copenhagen will make a difference in tipping us over the edge”.

In his letters, sent out to heads of state and governments around the world by diplomatic channels today, Rasmussen said their attendance “is a pivotal contribution to a successful outcome” to the December conference.

At least 40 leaders have said they plan to attend the conference, including the French president, Nicolas Sarkozy, and the Dutch prime minister, Jan Peter Balkenende.

President Luiz In¡cio Lula da Silva of Brazil has indicated he might come to the conference, and a spokesman for the German chancellor, Angela Merkel, said she is keeping the date open.

Brown wrote to Lula today to congratulate him on announcing an ambitious target to cut Brazil’s greenhouse gas emissions by 38%-42% by 2020.

The prime minister has been “hitting the phones” in recent days, speaking to Rasmussen and leaders of a range of countries to push for agreement at Copenhagen, as well as meeting the UN secretary general, Ban Ki-moon, said Downing Street.

Obama’s trip to China: a new interest in clean energy and a new spirit of cooperation

As President Obama heads to China, it is important to recognize just how much has changed in the past year. For the first time ever, an American president is traveling to Beijing with the issue of climate change at the top of his agenda. This kind of focus would have been unthinkable during the Bush administration, but in the past 10 months, Obama has directed federal agencies and urged Congress to take real action on climate.

But that is only half of the story. The long-held belief that China isn’t doing much to confront climate change has now become on old news too.

Under the leadership of President Hu Jintao, China has taken bold steps to reduce its energy use. Yet one of the most interesting threads in this new China narrative is rarely told on this side of the Pacific: China’s private sector is as eager to make these changes as China’s government.

I saw it for myself when I went to China in September. Clean energy innovation was at the center of every conversation I had with Chinese business executives and the media, not to mention government officials.

While I was in Shanghai, I attended a clean tech conference. It was co-sponsored by the local American Chamber of Commerce, so about two-thirds of the participants were Westerners, and the rest were Chinese. At the end, someone asked me, “Did you notice that the Chinese business people were here at the beginning of the conference, but they didn’t stay? They are more focused on action than on talking.”

The reason is obvious: there is enormous market potential here. A recent report estimated that the potential clean technology market in China in 2013 could be between $500 billion to $1 trillion. Meanwhile, China is set to become the world’s leading manufacturer of wind turbines this year, and is already the top producer of photovoltaic cells for solar energy.

This explosive private growth is no doubt inspired by government policy. China has set renewables targets of 10 percent for 2010 and 15 percent by 2020. It is also reportedly preparing plans to invest between $440 billion and $660 billion in the next 10 years on alternative energy development in what could be the largest government renewables program in the world — part of its effort to boost China’s clean energy industry.

America can no longer say we are waiting for China to move first before we act on climate solutions. The train has already left the station.

We need to set our own clean energy innovators in motion now if we want to keep the pace. We need to put our own clean energy policies in place, such as the climate legislation now before the Senate. As I explain in my new book, Clean Energy Common Sense, this will not only put us at the forefront of a global market, but it will also put millions of Americans to work.

Yet the truth is if China and America both work to expand clean energy technologies, this isn’t a competition. This is an opportunity where we can all win.

Texas Curb ’Em: How the Lone Star State Slashed Emissions

Famously oil-friendly-and laissez-faire-Texas may be the biggest, baddest greenhouse gas hog in the Union.

But according to a report by a local environmental group, it’s also one of the states that saw its absolute carbon-dioxide emissions drop the most in recent times.

The report, by Environment Texas, says that the Lone Star state’s carbon-dioxide output from fossil fuels fell by 10 million metric tons between 2004 and 2007-more than any other state except New York.

That was before the economic downturn, of course””the main driver behind global reductions in emissions recently. The reductions are due to lower industrial use of natural gas and a burst of clean-energy development in the state.

Those were the years that Texas became the wind-power leader in the U.S. At the same time, many electricity providers switched from coal to natural gas, which burns a lot cleaner. The report says that on a per-capita basis, emissions from Texas electric generators fell 4% between 2004 and 2007.

The findings underscore the paradoxical role Texas plays in the energy world. As home to ExxonMobil and ConocoPhillips, it spews more carbon dioxide than any other state in the U.S., and more even than all of Canada. That’s one reason the state’s political leadership is at war with the Obama administration over cap-and-trade plans””-jobs in the oil patch could suffer mightily.

On the other hand, Texas’ unusual combination of windy prairies, available transmission lines and a wide-open attitude toward energy investment helped the western part of the state become the wind-power capital of the country in less than a decade, further helping reduce emissions.

U.S., Japan to expand clean energy cooperation

The United States and Japan said they had agreed at a summit on Friday to expand cooperation in clean energy technologies in an effort to tackle climate change.

The two sides would work together in areas such smart grids, carbon capture and storage and nuclear energy, the two governments said in a joint statement after talks between U.S. President Barack Obama and Japanese Prime Minister Yukio Hatoyama in Tokyo.

Tokyo and Washington will aim to reduce their own greenhouse gas emissions by 80 percent by 2050 and back a global goal to halve emissions by mid-century, they said.

India joins China in plans to increase solar power

India is targeting generation of 20,000 megawatts of solar power by 2022, joining China as the two Asian nations that resist emission caps draft plans to boost renewable energy before next month’s global climate change talks.

India, Asia’s third-biggest energy consumer, is set to unveil its national solar energy plan “in about a week,” Minister for New and Renewable Energy Farooq Abdullah said in Mumbai today.

China and India have opposed legally binding caps as industrialized nations seek commitments for programs that will curb the output of gases blamed for global warming. The two fastest-growing major economies balk at emission targets because their energy usage is projected to rise as more people are lifted out of poverty.

“It’s not a big challenge in terms of technology or engineering,” said Shirish Garud of the Energy and Resources Institute in New Delhi. “The major challenge will be in mobilizing the financing.”

Solar capacity costs anywhere from 160 million rupees to 200 million rupees per megawatt to install, Garud said. Abdullah didn’t give details of spending, saying only that the amount would be “huge.”

Prime Minister Manmohan Singh plans to discuss India’s solar plan at talks with U.S. President Barack Obama, Abdullah said. Obama will host Singh at the first state dinner of his presidency on Nov. 24.

Copenhagen Talks

The plan will be presented at next month’s climate talks in Copenhagen, where nations will see it as a sign of India’s commitment to curb emissions. Delegates from 192 nations will try to reach agreement on a global accord in the Danish capital to replace the 1997 Kyoto Protocol.

The South Asian nation currently generates about three megawatts of solar power, Abdullah told reporters. China, which is preparing to more than double its output of alternative energy, may increase its solar capacity to 20,000 megawatts by 2020, according to Cui Rongqiang, head of the Shanghai Solar Energy Society.

“If India is able to produce enough energy that is not polluting, the whole world will welcome this,” Adbdullah said. India won’t commit to anything that would “stop our development, our progress at any cost,” he said.

The U.S. has urged India to “leap-frog” past developed countries and create a more energy-efficient infrastructure to become a world leader in clean technology industries.

NAM speaks softly on climate — does it carry a big stick?

The biggest U.S. manufacturers’ alliance has gone from being a ferocious critic of global warming legislation to being a quiet observer in recent months, even as debate about Senate climate legislation increasingly focuses on global trade issues and jobs.

The National Association of Manufacturers has largely stood on the sidelines since September. That month, environmental groups and the Obama administration launched a campaign against the U.S. Chamber of Commerce that sought to weaken its considerable lobbying might. The public attention and the loss of a handful of large companies upset about the chamber’s opposition to a House-passed climate bill forced its president, Thomas Donohue, to recant some chamber rhetoric and soften its position.

During that period, environmental groups were trying to paint NAM’s opposition to the House bill with the same broad brush.

Like the chamber, NAM was an outspoken critic of legislation that would cap carbon dioxide emissions and establish a national program for trading pollution allowances. Both spent millions of dollars in the summer on lobbying, advertising campaigns and position papers opposing climate legislation, saying it would be too costly for the nation’s industrial sector and would mean millions of job losses. NAM spent $6 million in the third quarter, and the chamber spent $34 million in the same period.

“It’s a fringe position,” said David Yarnold, executive director of the Environmental Defense Action Fund, describing his view of NAM’s opposition.

In August, NAM and the National Federation of Independent Business launched a national advertising campaign opposing the House-passed bill sponsored by Reps. Henry Waxman (D-Calif.) and Ed Markey (D-Mass.). “Our message to senators is that the Waxman-Markey bill is an anti-jobs and anti-energy piece of legislation,” NAM Executive Vice President Jay Timmons said at the time.

That same month, NAM and the American Council for Capital Formation released a study predicting that 2.4 million jobs would be lost, total loss of gross domestic product through 2030 would be $3.1 trillion, and residential electricity prices would increase by up to 50 percent by 2030 if the Senate were to pass the House bill.

The Environmental Defense Fund, the Natural Resources Defense Council and a tightly bound network of environmental investor groups called on companies to leave the chamber and NAM. Three major utilities Exelon Corp., Pacific Gas & Electric Co. and PNM Resources Inc. defected from the chamber. Apple and Nike also announced plans to quit the chamber’s board and leave the organization. Duke Energy Corp. had already left NAM, but no companies followed Duke in that decision. For the most part, NAM’s reputation has remained intact as critics have pummeled the chamber, sources said.

“It’s appropriate to challenge them on spreading half-truths, and then pushing others to have discussions in the trade associations about their position on climate change,” said Timothy Smith of Walden Asset Management.

Still, some major manufacturers, including Whirlpool and Dow Chemical, have said they don’t agree with NAM’s staunch opposition to the House bill, but are staying in the organization.

“Obviously our position is different than theirs,” said Peter Molinaro, vice president for government affairs at Dow Chemical.