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Environment and Natural Resources Committee

Environment Update

November 14, 2003
Volume IV, Number 3

Previous Issues

Tucked away in S. 1584, the FY2004 appropriations bill for Veterans, Housing and Independent Agencies, is a provision that amends Section 209 (e)(I)(A) of the Clean Air Act (CAA). The amendment, advanced by Senator Kit Bond (R-Missouri), would curtail state authority to regulate diesel and gasoline off-road equipment and engines. States currently have authority to exceed federal standards under various provisions of CAA, including the aforementioned section. In an October 29, 2003 letter to the full Senate, NCSL wrote: "states are best suited to determine which sources, including off-road equipment and engines, contribute most significantly to air pollution and which strategies are most effective in addressing pollution-related problems." The Bond amendment would undermine state authority. Secondly, NCSL has long-standing policy opposing development of environmental policy through appropriations riders. This issue, if it even needs review, is best suited for substantive committee deliberations as NCSL pointed out in its October 29^th communication. S. 1584 awaits Senate floor action. It is possible that it will be one of the remaining appropriations measures folded into an omnibus FY2004 appropriations measure as Congress attempts to adjourn its 2003 session later this month.

As Congress continues to inch closer to the end of the session a final deal on H.R. 6, The Energy Policy Act of 2003, seems near. For weeks conference negotiators have been attempting to hammer out differences between the House and Senate passed versions of the bill. Final agreement has been stalled most recently by negotiations over energy tax package portion of the bill. On Wednesday, November 6^th, Sen. Charles Grassley (Iowa), Chair of the Senate Finance Committee, and Rep. Bill Thomas (California), Chair of the House Ways and Means Committee, reached an agreement regarding the tax treatment of ethanol and biodiesel fuels. Following the announcement of the tax compromise a meeting was held between the chief House and Senate negotiators, Sen. Pete Domenici, Chair of the Senate Energy and National Resources Committee, and Rep. Billly Tauzin, Chair of the House Energy and Commerce Committee, to iron out the remaining unresolved issues. Though no details are available at this time on any agreements that might have been reached it appears that the conference committee could meet sometime next week to vote on a final report.

One of the key stumbling blocks for the legislation concerns methyl tertiary-butyl ether (MTBE). MTBE is a fuel additive whose use in recent years has become controversial due to incidents of water contamination. An attempt by the House to establish a safe harbor providing liability protection for MTBE producers is one of a number of provisions that were handled differently by the House and Senate versions of the bill. The MTBE liability protection is only found in the House passed version of the bill. The Senate bill includes a ban on MTBE and would allow the EPA to control or prohibit fuels and fuel additives in order to protect water quality, neither provision is in the House legislation. On October 10^th forty-two Senators sent a letter to Chairman Domenici & Chairman Tauzin urging them to oppose including a liability waiver for MTBE producers as part of the final conference agreement on the Energy bill. Of particular interest for the conferees is the number of Senators who signed on to this letter given that 60 votes are needed to break attempts to filibuster consideration of the conference report when taken up on the Senate floor. Other possible issues of contention that may affect floor consideration of the conference agreement include treatment of Democratic conferees who were essentially shut out of negotiations and the perception that the ethanol provisions are inadequate. The White House stated this week that the likely exclusion of ANWR oil drilling authority in a conference agreement will not provoke a veto.

Following consideration of the legislation, H.R. 1904, the Healthy Forests Restoration Act of 2003, by the Senate on October 29-30^th the bill as amended passed by a vote of 80-14 (Record Vote Number: 428). The Senate amendment was than returned to the House for a vote on the Senate version of the bill. This legislative procedure is a means of resolving differences between two versions of legislation without the need of a conference committee. The House however disagreed with the Senate amendment and requested a conference on the bill. H.R. 1904 would expedite procedures for thinning forests on federal lands, modify environmental reviews and address old-growth trees. Senate Democratic leadership is blocking the move to form a conference on this and other pieces of legislation in protest citing unfair treatment of conferees on Medicare and energy legislation.

Climate Stewardship Act of 2003: On October 30^th the Senate took up the debate on global warming on the floor of the chamber for the first time in six years. Sens. John McCain (R-Ariz.) and Joe Lieberman (D-Conn.) are the co-sponsors of the legislation, S. 139, aimed at capping greenhouse gas emissions from a range of U.S. industrial sectors. The floor vote was 43 - 55 (Record Vote Number: 420) and the legislation was referred back to the Senate Committee on Environment and Public Works. The failed vote on S. 139 could provide momentum in the Senate for the President's Clear Skies legislative proposal however, Sens. McCain & Lieberman have indicated that they will continue to push the issue through congressional hearings, public outreach and perhaps another floor vote in the spring of 2004.

The U.S. Office of Management and Budget's annual report on the costs and benefits of federal regulations and unfunded mandates indicates an overwhelming benefit of select environmental and other regulations when measured against costs. The report focuses on 31 rules for the period October 1, 2001 to September 30, 2002 and 107 rules for the decade commencing October 1, 1992. For the one-year period, major environmental rules provided a benefit range of $1.3 - $4.8 billion compared with a little under $200 million in costs to the private and public sectors. The 10-year measurement shows benefits of $120-193 billion against $23-27 billion in costs. OMB points out that the aggregate benefits are influenced significantly by the sulfur dioxide limits of the acid rain provisions in the 1990 Amendment to the Clean Air Act. It further explains that previously incorrect costs estimates for EPA's rules establishing National Ambient Air Quality Standards for ozone and particulate matter substantially reduce aggregate costs. Finally, the OMB report states that four of the 107 rules reviewed for ten years - notably, rules limiting particulate matter and NOx emissions, rules limiting emissions from heavy duty engines and light duty vehicles and the acid rain rule - "account for a substantial fraction of the aggregate benefits" among all 107 rules. OMB's cost/benefit analysis methodology and future plans will be discussed along with the 2003 report during deliberations of the NCSL Environment Committee at the Fall Forum scheduled for December 10-12, 2003

The next meeting of the NCSL Standing Committee on Environment & Natural Resources will be Wednesday, December 10, to Friday, December 12, at the Hyatt Regency on Capitol Hill in Washington, D.C. The hotel deadline has passed but a limited number of rooms are still available at the conference rate on a first come first serve basis. Please call the hotel directly 202-737-1234 or 800-233-1234, to make reservations and indicate you are attending the "NCSL Conference" to receive the conference rate. The pre-registration deadline for the meeting is November 27, 2003. Please note that if you are not able to register in advance, on-site registrations are welcome and there is no additional charge. Please visit the NCSL web site at http://www.ncsl.org/standcomm/Fall03.htm for additional information on registration.