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Agriculture, Environment & Energy Federal Update: 2008 Debates Continue In Washington
Updated July 18, 2008
Since the beginning of 2008, there have been over 258 hearings and markups in 29 committees dealing with issues under the jurisdiction of the NCSL Agriculture, Environment & Energy Committee. Congress continues to work on solutions to the plummeting housing market and economy scares, escalating energy and food costs, and how to move forward in the climate change debate. With this being a presidential election year, the congressional calendar will be shortened, and questions abound as to what Congress will be able to accomplish before the end of the year and how the Administration will handle its last few months in office. Below NCSL staff provides detailed explanations of select activities within the federal government that are pertinent to AEE Committee members.
Appropriations Process for FY 2009
Senate: Majority Leader Harry Reid (Nevada) announced on July 10 that most spending bills for federal agencies will be rolled into a continuing resolution into next year. When the 111th Congress begins, it will consider individual spending bills to send to the new President. The Majority Leader said that the Defense and military construction measures for FY 2009 will be completed this year, but all others, including the Energy & Water, Interior, and Transportation & Commerce measures will not be finished. This does not mean that the Appropriations Committee is not continuing to mark up spending bills; work continues in case there is time to take up additional bills before the end of the year, although President Bush is insisting on lower spending levels than what Congress wants, and the consensus is to wait for the next president in order to avoid a spending fight with the White House.
House: Although five spending bills have passed out of the full committee, the House appropriations process has come to a halt, with little expectation of it resuming before the August recess. House Appropriations Chairman David Obey (Wisconsin) decided to stop holding markups of spending bills after Republicans attempted to offer the Interior spending bill as an amendment in the nature of a substitute to the Labor, Health & Education appropriations bill, in order to offer further amendments on oil and gas leasing. Since that markup, Chairman Obey has refused to hold another. This is the first time in 23 years that the House has failed to bring an appropriations bill to the floor for consideration by mid-July.
Status of Spending Appropriation Bills of Interest:
Agriculture- Rural Development – Food & Drug Administration
- H.G.W. 201 passed out of House subcommittee on June 19
- There has been no action in the Senate on S.G.W. 201
Energy & Water Development
- The House introduced bill text of H.G.W. 204 and released a preliminary committee report and summary
- The Senate passed S.G.W. 204 out of its subcommittee on July 8, and a full committee markup was held on July 10
Interior & Environment
- The House subcommittee allocated funding of H.G.W. 206, but the full committee markup has been postponed.
- The Senate will possibly hold a markup on S.G.W. 206 on July 24
Labor-Health & Human Services – Education
- The House markup session of H.G.W. 207 was not completed, but bill text was introduced, as well as a preliminary committee report
- The Senate issued its final committee report on S. 3230, which replaced S.G.W. 207.
Carbon Sequestration Rule Released by EPA
On Tuesday, July 15, 2008 the U.S. Environmental Protection Agency (EPA) released a proposed rule establishing a regulatory framework for geologic carbon sequestration. The proposed regulation creates a national framework to cover the injection of carbon dioxide underground and provide protection of underground drinking water resources. Under the authority of the Safe Drinking Water Act's Underground Injection Control (UIC) program, the proposed rule creates a class of injection wells. Building on the existing UIC program the proposal would establish requirements to ensure wells are appropriately located, constructed, tested, monitored, and ultimately, closed with proper funding. It would apply to owners and operators of wells that will be used to inject carbon dioxide into the subsurface for the purpose of long-term storage. It is expected that this proposed rule will serve to advance research and development efforts and to support technologies necessary for carbon capture and storage that would be used to reduce greenhouse gas emissions.
The public comment period for the rule will be open for 120 days following the publication of the proposed rule in the Federal Register. To access more information on the proposal as well as additional information about geologic sequestration activities and the UIC program go to: http://www.epa.gov/safewater/uic/wells_sequestration.html
Climate Debate Ends for 2008; Senators Already Looking Towards 2009
After a week of contentious debate on the Senate floor, S. 3036, the substitute of the Lieberman-Warner Climate Security Act of 2008 offered by Senate Environment & Public Works (EPW) Committee Chairman Barbara Boxer (California), failed to reach cloture on June 6. The 48-36 vote was not enough to end debate on the bill and move to a vote on the actual bill, and therefore effectively ended debate on climate legislation for the rest of the year when Senate Majority Leader Harry Reid (Nevada) pulled the legislation from the Senate calendar.
The Senate is already looking towards the issue for next year, with multiple committees showing interest in working on the drafting of future legislation. The Senate EPW Committee has had jurisdiction over the entire bill during the 110th Congress; however, the Finance Committee, the Agriculture Committee, the Commerce, Science & Transportation Committee, and the Energy & Natural Resources Committee have all expressed a desire to work on respective portions of a bill next year. The decision of where the bill will go once it is introduced will lie with the 111th Congress Senate Majority Leader.
EPA Holds True To Course and Releases Advance Notice of Proposed Rulemaking
On July 11 the U.S. Environmental Protection Agency (EPA) released an Advance Notice of Proposed Rulemaking (ANPR) covering the regulation of Greenhouse Gas Emissions under the Clean Air Act. This release maintains the course of action outlined earlier this year by EPA Administrator Stephen Johnson in a March 27 letter to the Chair and Ranking Members of the House Energy & Commerce Committee and the Senate Environment & Natural Resources Committee. The ANPR is part of the EPA's response to the U.S. Supreme Court’s 2007 decision in Massachusetts v. EPA. The Court found that the Clean Air Act (CAA) authorizes EPA to regulate tailpipe greenhouse gas emissions if EPA determines they cause or contribute to air pollution that may reasonably be anticipated to endanger public health or welfare. In the ANPR, EPA is requesting public comment on the benefits and ramifications of regulating greenhouse gases under the Clean Air Act (CAA).
The 588-page federal notice provides summaries of much of the EPA’s work to date and lays out concerns raised by other federal agencies and the White House during their review of this work. However, the EPA made no finding on whether global warming poses a threat to public health in the document and there are no agency decisions or policy recommendations in the document. In comments made surrounding the release of the ANPR, Administrator Johnson stated that he believes the CAA is “ill-suited for the task of regulating global greenhouse gases. Based on the analysis to date, pursuing this course of action would inevitably result in a very complicated, time-consuming and, likely, convoluted set of regulations.”
Some of the key issues included for discussion and comment are: descriptions of key provisions and programs in the CAA and the advantages and disadvantages of regulating GHGs under each; how the decision to regulate GHGs under one section of the CAA could or would lead to regulation under other sections as well, including the need to establish permitting requirements for major stationary sources; issues Congress should consider when discussing possible future climate legislation and the potential for overlap between future legislation and regulation under the existing CAA; scientific information relevant to, and the issues raised by, an endangerment analysis; and information regarding potential regulatory approaches and technologies for reducing GHG emissions.
Following the notice's publication in the Federal Register there will be a 120-day public comment period. For additional information about the Climate Change ANPR including links to the ANPR itself, supporting technical documents and a fact sheet on the ANPR go to: http://www.epa.gov/climatechange/anpr.html.
Court Vacates Clean Air Interstate Rule on Heels of Mercury Rule Action
On July 11, the U.S. Court of Appeals for the District of Columbia Circuit vacated the U.S. Environmental Protection Agency (EPA) Clean Air Interstate Rule (CAIR) which established a cap and trade program to address the effect of an upwind state’s emissions on a downwind state’s ability to meet air quality standards for ozone and fine particulate matter. A three-judge panel unanimously vacated the entire rule and remanded both CAIR and its associated federal implementation plan (FIP) to EPA for reconsideration citing “more than several fatal flaws in the rule” (State of North Carolina v. EPA).
In the absence of CAIR, the court ruled that the “NOx SIP Call trading program will continue, because EPA terminated the program only as part of the CAIR rulemaking. . . . The continuation of the NOx SIP Call should mitigate any disruption that might result from our vacating CAIR at least with regard to NOx. In addition, downwind states retain their statutory right to petition for immediate relief from unlawful interstate pollution under section 126, 42 U.S.C. § 7426,” the court said.
CAIR would have required 28 states in the Eastern U.S. and the District of Columbia to revise their state implementation plans to achieve further reductions of sulfur dioxide (SO2) and/or nitrogen oxides (NOx) in order to address continuing nonattainment of the ozone and PM 2.5 NAAQS. One of the options available to the states was to achieve the reductions through regional emission cap and trade programs.
This latest ruling by the court follows the February 8 decision by the same court that voided two other EPA regulations covering mercury emissions (State of New Jersey v. EPA). These regulations were issued as part of a suite of inter-related clean air regulations in 2004 and 2005 by the EPA designed to reduce ozone and fine particle pollution, nonroad diesel emissions, and power plant emissions of sulfur dioxide, nitrogen oxides and mercury.
EPA sought to remove power plants from a list of hazardous air pollutant sources and regulate their mercury emissions through a more discretionary cap-and-trade program under the Clean Air Mercury Rule (CAMR). The court determined that EPA had failed to adequately justify removing power plants from the list and, in effect, overturned both actions. In the decision, the court stated that “Because coal-fired EGUs are listed sources under section 112, regulation of existing coal-fired EGUs’ mercury emissions under section 111 is prohibited, effectively invalidating CAMR’s regulatory approach.”
The impact of these rulings on state actions to come into compliance with the regulations and air quality standards in general remains uncertain. Whether EPA appeals either decision is currently under agency review. An announcement from Administrator Johnson may come as later summer.
For background information on CAIR and CAMR and related EPA rules go to: http://www.epa.gov/cleanair2004/. To read the U.S. Court of Appeals Opinion in State of North Carolina v. EPA (CAIR ruling) go to: http://www.epa.gov/cair/pdfs/05-1244-1127017.pdf. To read the U.S. Court of Appeals Opinion in State of New Jersey v. EPA (CAMR ruling) go to: http://pacer.cadc.uscourts.gov/docs/common/opinions/200802/05-1097a.pdf.
Democrats and Republicans Offer Solutions to Oil Supply
In an attempt to answer the issue of high energy prices, both Democrats and Republicans are focusing on domestic drilling; the ways they are doing so, however, are very different. Democrats believe that oil companies that currently have leases for drilling on federal land should be doing just that – drilling. The Majority leadership heavily touted the Drill Responsibly in Leased Lands Act, or DRILL Act, which would require oil companies to produce from, develop or relinquish current leases in order for the companies to obtain new federal leases. The bill (HR 6515) was brought to the House floor on July 17 under expedited rules and required a two-thirds approval in order to pass; it failed by a vote of 244-173.
Republicans, on the other hand, are pushing for a removal of offshore leasing bans and have alleged that Democrats are blocking access to domestic energy production. House Committee on Appropriations ranking member Jerry Lewis (California) attempted to put the issue of offshore drilling to a vote during an appropriations markup of the Labor-HHS spending bill, offering the Interior bill as an amendment in the nature of a substitute. This action caused Chairman of the Appropriations Committee David Obey (Wisconsin) to halt the appropriations process for an undetermined amount of time. Senate Energy & Natural Resources Ranking Member Pete Domenici (New Mexico) may offer a drilling amendment during the Senate’s markup of the Interior spending bill. Also, on July 14 President Bush lifted the executive-level offshore drilling bans that were instituted by his father, thus removing one hurdle to opening up the East Coast, West Coast and eastern Gulf of Mexico to offshore drilling. In order for permits to be issued in these areas, however, Congress still needs to act.
On July 15, Representatives Neil Abercrombie (Hawaii) and John Peterson (Pennsylvania) formed a bipartisan group that will urge lawmakers to increase offshore production as well as increase conservation.
President Reacts to High Price of Gasoline
On July 14, the President issued a memorandum lifting executive prohibition on oil exploration in the Outer Continental Shelf (OCS). Citing inaction by Congress to move legisslation to open up the OCS to increased exploration the President removed wholesale the exuctive branch imposed restrictions on exploration of the OCS. However, this does not affect restriction in areas within existing marine sanctuaries or areas near Florida which are also off limits until 2022 under the Gulf of Mexico Energy Security Act.
The President's action directs attention to the debate occuring in Congress over increased exploration given that the remaining ban on OCS exploration is imposed by Congress and has been renewed annually through the appropriations process. In addition to renewing his request to Congress to repeal the Congressional ban the President also called on Congress to pass authorizing legislation that would enable offshore exploration. The legislative package sought by the President would include language to provide for a state voice in determining what happens off their shores, provide a way for the Federal Government and States to share new leasing revenues, and ensure the environment is protected. If the Congressional ban was lifted, pieces of this package could be handled under existing authority (state consultation could be incorporated into new lease plans) however other aspects could only be accomplished through new legislative authority (revenue sharing).
This action follows on the President's June 18 speech on energy issues. The President called on Congress to move forward on four steps to expand American oil and gas production. The President called for the expansion of domestic oil production by increasing access to the Outer Continental Shelf, or OCS as wll as tapping into the potential of oil shale and by permitting exploration in the Arctic National Wildlife Refuge, or ANWR. In addition, the President highlighted the need to expand and enhance our refining capacity given its role in linking crude oil with the gasoline and diesel fuel that drivers put in their tank.
To read the transcript of the President's June 18 remarks and acces related documents go to: http://www.whitehouse.gov/news/releases/2008/06/20080618.html. For information on the President's July 14 speech on OCS exploration go to: http://www.whitehouse.gov/news/releases/2008/07/20080714-4.html.
Energy Speculation
Numerous bills have been introduced over the past month to address the investor speculation in energy markets that many have pointed to as a factor in energy price increases. The bill that appears to have the best chance of being considered by members of Congress is S. 3268, the Stop Excessive Energy Speculation Act, introduced by Senate Majority Leader Harry Reid (Nevada) on July 15. The bill would require the Commodity Futures Trading Commission (CFTC) to make a number of changes to how it handles U.S.-linked contracts that are traded overseas, and would make those contracts subject to the same regulations as if traded in the U.S., among other measures. The bill would also create an interagency Working Group on Energy Markets, which would investigate how energy market speculation effects energy commodities, recommend new laws and regulations with regards to energy market speculation, coordinate a federal response to an energy emergency, and look into security measures with international energy developments, as well as complete a study on the role of speculation on energy prices for Congress. The agencies that would task the working group are the CFTC, the Federal Energy Regulatory Commission (FERC), the Federal Trade Commission (FTC), and the Securities and Exchange Commission (SEC). Senator Reid’s bill will not include an increase in margin requirements, which the CFTC recommended against and testified could lead to unintended consequences.
Similar bills have been introduced by co-sponsors of S. 3268, Senators Richard Durbin (Illinois) and Byron Dorgan (North Dakota). Parts of both Senator Durbin’s bill, S. 3130, the Increasing Transparency and Accountability in Oil Prices Act, and Senator Dorgan’s bill, S. 3183, the End Oil Speculation Act, have been included in the Stop Excessive Energy Speculation Act. Senator Joe Lieberman (Connecticut) also introduced a bill on the matter.
Please note that the CFTC was reauthorized in this year’s Farm Bill, and the legislation included an expansion of CFTC oversight to certain exempt commercial markets including energy commodities.
DOE Submits Yucca Mountain License Application
On June 3, 2008, the U.S. Department of Energy (DOE) announced its submittal of a license application to the Nuclear Regulatory Commission (NRC) to construct and operate a deep, geologic repository for the final disposal of the country's high-level radioactive waste and spent nuclear fuel at Yucca Mountain, Nevada. Along with the license application, DOE submitted a Final Environmental Impact Statement and approximately 200 key documents. More than 3.6 million documents related to the Yucca Mountain repository are available to the public on the NRC's Licensing Support Network.
The license application outlines DOE's plans to dispose of spent fuel and high-level waste in a series of tunnels beneath the surface of the earth. Currently, the material is stored at 121 commercial nuclear reactor sites and DOE facilities in 39 states. In a press conference about the license application release, Secretary of Energy Samuel Bodman stated, "We are confident that the NRC's rigorous review process will confirm that the Yucca Mountain repository will provide for the safe disposal of spent nuclear fuel and high-level radioactive waste and will be protective of human health and the environment now and into the future." The NRC will spend up to six months reviewing the application to ensure it is complete and ready for full consideration, after which the NRC will take three to four years to examine the 8,600-page document and determine whether to grant DOE a license.
Hurdles remain for the project. These include opposition from the State of Nevada and reduced funding from Congress for the repository program in recent years. Funding constraints have hampered DOE's ability to meet milestones for advancing the project such as constructing a railway in Nevada for transporting nuclear waste to the repository. While utility ratepayers have contributed to a Nuclear Waste Fund since the early 1980s to pay for the repository, the funding for the project is dependent on annual congressional appropriations which has created an annual uncertainty regarding availability of funds. To date the Nuclear Waste Fund account stands at approximately $20 billion. In addition, the total inventory of waste in the United States is expected to reach the legal limit of disposal capacity at Yucca Mountain by 2010. DOE hopes to expand the statutory cap of 70,000 metric tons to a volume (perhaps double the current limit) based on scientific feasibility to maximize use of the mountain. Several federal bills have been proposed to address the capacity issue, access to the Nuclear Waste Fund and other potential barriers.
The DOE Office of Civilian Radioactive Waste Management, which directs the Yucca Mountain project, does not expect the national repository to be up and running until at least 2020. The DOE Press Release can be found on-line at http://www.ocrwm.doe.gov/info_library/newsroom/documents/060308_la_pr.pdf. For additional information about the License Application and DOE’s Yucca Mountain Project visit: http://www.ocrwm.doe.gov/.
NCSL Supported Diesel Retrofit Funding Bill Signed Into Law
On June 30, the President signed into law legislation that specifies the availability and access to supplemental environmental project funds, or SEPs, for clean diesel retrofit programs. S. 2146 (Public Law No: 110-255) was first introduced by Sen. Tom Carper (Delaware) and later passed unanimously by both the House and Senate. NCSL has long supported clean diesel programs including the passage of the Diesel Emissions Reduction Act (DERA) in the Energy Policy Act of 2005. The FY2008 Consolidated Appropriations Act included $49.2 million in funding for DERA. While retrofits have received funding previously through SEPs, a 2006 EPA memo put forth a new policy that diesel retrofits no longer qualify for funding through SEPs once DERA receives appropriations. This legislation provides the necessary clarity for EPA to continue to allow for funding of diesel retrofit program through SEPs. SEPs can be included in enforcement settlements with the EPA and Department of Justice in lieu of civil monetary penalties. They must further EPA’s goal of protecting public health and the environment. SEP funds may not be used to meet a violator’s responsibilities under law or regulation.
At the 2007 NCSL Fall Forum, NCSL adopted edits to the Clean Diesel Policy that clearly stated DERA funding should not jeopardize the availability of retrofit funding through federal supplemental environmental projects. In February, NCSL joined a broad coalition of environmental, science-based, public health, industry, and state and local governmental groups in signing a letter to committee leadership in both the House and Senate urging them to enact this legislation.
The List Continues…
A number of other issues that lawmakers have taken the time to consider during the 110th Congress remain on NCSL’s radar, but there has been little progress on Capitol Hill. The NCSL staff will continue to monitor these issues and inform you of any developments. This includes the energy tax credit extensions, considered a "must do" in order to maintain investment and projects in the renewable energy industry, waters of the U.S. jurisdictional issues, water infrastructure, and electronic waste among others.
For further information, please contact:
Tamra Speilvogel
Committee Director
State Federal Relations
Agriculture, Environment & Energy
Tamra.Speilvogel@ncsl.org
202.624.8690
Lee Posey
Committee Director
State Federal Relations
Agriculture, Environment & Energy
Lee.Posey@ncsl.org
202.624.8196
Amanda Naughton
Policy Specialist
State Federal Relations
Agriculture, Environment & Energy
Amanda.Naughton@ncsl.org
202.624.3572
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