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Friday, December 10, 2010

Josh Voorhees: Energy and Environment Subcommittee split in the works - Energy extenders snag a ride on Senate tax deal - E&C Dems brace for cuts

Energy and Environment Subcommittee split in the works - Energy extenders snag a ride on Senate tax deal - E&C Dems brace for cuts

Starring POLITICO’s Darren Goode, Robin Bravender, Darren Samuelsohn and Patrick Reis

DIVIDE AND CONQUER – Fred Upton is planning on splitting the Energy and Environment Subcommittee into two panels, a former Energy and Commerce staffer familiar with the discussions tells Morning Energy. The first E would be under the jurisdiction of the (wait for it) Energy Subcommittee, while the second would be the domain of what is tentatively being called the Air Quality and Environment Subcommittee. Such a move would give the full panel a sixth subcommittee, which could open the door for John Shimkus to lead whichever of the two restructured panels Ed Whitfield doesn’t choose.

The chairman-to-be, meanwhile, stressed yesterday that nothing is a done deal yet. “There are a lot of moving parts, a lot of decisions to be made on a host of things, including jurisdictions,” Upton told POLITICO, adding that he plans to make any restructuring decisions by Monday, and expects to name subcommittee chairmen and release subcommittee ratios by the middle of next week.

ME (HOT TUB) TIME MACHINE – Henry Waxman opted to consolidate the Energy and Air Quality Subcommittee and the Environment and Hazardous Materials Subcommittee when he became chairman in 2008. “I just thought it made a lot of sense to have just one [sub]committee,” he told POLITICO, adding that he had no opinion on the potential GOP restructuring.

GOP LINEUP CARD – Republicans yesterday opted to shrink the size of the full committee by seven seats to 52 members, reserving 30 seats for themselves. They also filled out their side of the roster, naming a dozen new members to the panel (not including Greg Walden): Cathy McMorris-Rodgers (Wash.), Pete Olson (Texas), Brian Bilbray (Calif.), Brett Guthrie (Ky.), Gregg Harper (Miss.), Bill Cassidy (La.) and first-termers Charlie Bass (N.H.), Cory Gardner (Colo.), Mike Pompeo (Kan.), Adam Kinzinger (Ill.), David McKinley (W.Va.) and Morgan Griffith (Va.). [The list was obtained by POLITICO from multiple GOP sources; the 30-22 split comes from a source familiar with the discussions:

‘ZOMBIES’ – Seven of the panel’s newcomers are on ThinkProgress’s “Climate Zombie” list: McMorris-Rodgers, Olson, Bilbray, Harper, Bass, Gardner and McKinley. 

DEM LINEUP CARD – Democrats tentatively have been allotted 22 seats, down from the 36 they had in the 111th Congress. With six Democrats having retired or lost reelection, eight more will need to be shown the committee door. That doesn’t bode well for the panel’s most junior members: Peter Welch (Vt.), Bruce Braley (Iowa), Betty Sutton (Ohio), Jerry McNerney (Calif.), Chris Murphy (Conn.), John Sarbanes (Md.), Kathy Castor (Fla.), and Donna Christensen (V.I.).

“I’d be enormously disappointed not to be on it, but the ratios are what they are,” Braley said yesterday. “I continue to make my case for why I should keep my seat on there, and at the same time [am] preparing for the reality there are going to be very few seats available.”

SEARCHING FOR EDWARD MARKEY – No Democrat has yet stepped forward to claim the top spot on the energy subcommittee (or either of the potentially restructured ones). “The situation with the subcommittees really isn’t clear,” said Mike Doyle, when asked if he would make a play for a gavel. “We’re taking an attitude of let’s wait for the ratios to be announced, let’s wait for the subcommittees to be announced, and then you can make some decisions based on what your colleagues are doing.”

Happy Friday and welcome to a Morning Energy, where today’s edition is overflowing with insider info and behind-closed-doors talk. But we can always use more, so send tips, scoops and anything else you think ME would like to Josh Voorhees at 

TOP TALKER – The New York Times has a front-pager this morning on EPA’s decision to postpone tougher emissions rules. “Administration officials now face the question of whether in their zeal to undo the Bush agenda they reached too far and provoked an unmanageable political backlash,” the paper reports. 

WHITE HOUSE REACT – “The administration has a long record of success in our efforts to transition to a clean energy economy and increase environmental protections, and we will continue to build on and defend that record moving forward, creating jobs, reducing dependence on foreign oil, and cutting pollution,” an administration officials e-mails ME this morning.

ENERGY PARADE – The Senate tax deal unveiled last night includes a one-year extension of the 45-cent ethanol excise tax credit, as well as of a federal grant program for renewable energy projects. Both of those are big victories for Corn Belt Democrats – at least some of whom needed some additional incentive to support the larger White House-brokered deal. Seventeen Senate Democrats – led by Dianne Feinstein, Barbara Boxer and Maria Cantwell – also sent a letter to Harry Reid and Finance Chairman Max Baucus hours before the tax deal was introduced asking for the inclusion of the renewable energy grants.

Enviros essentially saw their biggest victory and defeat in the talks simultaneously, as they were pushing hard for the renewable grants but also hoping the ethanol incentives would be left to expire.

WAIT, THERE’S MORE – The package, which awaits a cloture vote Monday afternoon, also includes a suite of other energy sweeteners for weary Democrats: a one-year extension of the 54-cent ethanol import tariff and what appears to be a retroactive extension through next year for a biodiesel tax incentive that expired at the end of last year. Other provisions that made the cut: energy efficiency credits for new homes, appliance efficiency credits, alternative fuel vehicle refueling property credits, and incentives for refined coal facilities that were all set to expire at the end of this year.

LEFT BEHIND – One item that failed to hitch a ride was a tax credit for advanced energy manufacturing that was backed by labor unions, the BlueGreen Alliance and Midwestern Democrats.

** A message from America’s Natural Gas Alliance: For news updates on the natural gas community, be sure to follow us on Twitter @ANGAus and @NatGasNow. **
CLIMATE IOUs IN DOUBT – Hillary Clinton pledged in Copenhagen to help poor countries deal with global warming but, in the year since, her offer to spend tens of billions of dollars over the next several decades has run into trouble back home. “Republicans wielding power next year will have no appetite to spend discretionary money on climate-related issues, especially when they doubt the underlying science,” POLITICO’s Darren Samuelsohn reports this morning. “And the demise of comprehensive climate legislation leaves the administration without the long-term funding stream it had envisioned using to cover much of its pledge.” 

CANCUN! 20!10! – The Washington Post’s got a front-pager this morning on the state of climate talks heading into the last day of the two-week Cancun conference. 

ETHANOL NEGOTIATIONS – Perhaps underscoring how fluid the Senate tax talks were right up until the last minute is what appears to be a drafting error that would need to be corrected in the introduced bill. There is a subhead noting a “reduced amount for ethanol blenders,” but, in fact, the current 45-cent credit held out in the end. Rumors were rampant this week that the credit would be cut to the 36-cents-per-gallon level that was in the initial Baucus plan last week.

LEARNING TO LOVE CORN – Chuck Grassley called White House COS Pete Rouse on Dec. 2 to firm up support for the full 45-cent incentive. But sources closely following or involved in the ethanol talks differ on whether Grassley was seeking Rouse’s help in convincing Baucus and other administration officials to back the 45-cent level or whether it was Jon Kyl who was the problem.

KYL? – A congressional GOP aide said Kyl early on, and eventually House Ways and Means ranking member Dave Camp, were on board with extending the full credit. But Kyl is also known not to be a fan of the ethanol credit, leading some to suggest he was trying to keep it out of the final deal. (Fiscal conservatives and other ethanol critics also argued that the industry has already enjoyed three decades worth of federal help, including a renewable fuel mandate created by Congress in 2005 and later expanded that so far largely benefits corn ethanol.)

W.H.? – Rouse is a former chief of staff for Tom Daschle – who was a leading ethanol supporter during his time on Capitol Hill. Rouse has carried on that adulation for ethanol production to his new job, but the White House has also had to address the need to ratchet down federal subsidies. Rouse and other administration officials have been working with ethanol groups to find a finite end to the current ethanol tax credit and were believed to be OK with reducing the credit next year down to 36 cents.

There was talk at one point about having the White House draft a letter indicating its support for ethanol, but the idea was dropped because the administration was not going to specifically use the letter to advocate for the full 45-cent credit, a GOP aide said. However, some following the negotiations say it was the White House that stepped up – along with Grassley – to ensure the full credit was preserved.

CLIMATE BLAME GAME – House Ag Chairman Collin Peterson thinks EPA is doing more to block a climate bill than anyone else. Many in the environmental movement hoped the threat of EPA regulations would push Congress to pass climate legislation, but Peterson said the rules, set to go into effect next month, are keeping Congress from a compromise. EPA is “our biggest impediment to getting off of foreign oil,” he said.”They've completely made it impossible for us to get this rolling with all their crazy rules.”

WITH THEIR POWERS COMBINED – Jim Inhofe and Fred Upton sent a letter to Lisa Jackson yesterday letting the EPA chief know that the two GOP leaders are watching closely as the agency revises the 2008 national ambient air quality standard for ozone. “This letter should send a clear message: Republicans in the House and Senate are united in stopping EPA’s job-killing regulations,” Inhofe said in a statement. “We will bring balance back to the federal bureaucracy, ensuring the American people environmental progress and a regulatory system that protects jobs and maintains America’s economic competitiveness.” The letter: 

TAKING AIM AT INTERIOR – The Western Energy Alliance yesterday fired another salvo in its ongoing assault on the Interior Department's oil and gas leasing program. In a report, the industry group said the agency has cut the number of acres offered for drilling by 70 percent since fiscal 2005 and cut the number of drilling leases issued by more than three quarters. Interior chief Ken Salazar is pushing for a leasing process that would settle land disputes before leases are sold, but the group says new environmental regulations are causing unnecessary delays. Find the report here: 

ALSO NOT AN INTERIOR FAN – Jim Noe. The Shallow Water Energy Security Coalition’s executive director points ME to page 69 of a new proposed drilling rule. In addressing concerns that it would drive up the price of oil in the U.S., the rule reads: “Currently there is sufficient spare capacity in OPEC to offset a decrease in Gulf of Mexico deepwater production that could occur as a result of this rule.” The rule: 

Noe writes: “That’s right, you read it correctly: the bureaucrats at BOEM admit their new regulations will decrease the domestic production of oil and gas, but tell us that the foreign oil price fixing cartel … are more than happy to pick up the slack.” 

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