Energy and climate, March Madness-style

Thomas Pyle President, Institute for Energy Research
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High stakes, tall-odds, last-second heaves and long-shot upsets—to some, March Madness represents one of the most exciting events on the calendar, and among the most heavily wagered on as well. But who’s talking about basketball? On Capitol Hill, more than a dozen competing energy and environmental proposals are in the process of making their final case to the committee, and gearing up for a furious race to the finish in 2010.

Who’s in the best spot to lay claim to the coveted glass slipper this year—and who might be destined for an early-round exit? My colleagues and I at the American Energy Alliance took a look at the field of climate combatants this year, and, after applying the most rigorous methods of bracketology to date, came up with the following assessment of who’s up, who’s down, and how it all might unfold in the weeks and months to come.

Waxman Region

  1. H.R. 2454 (Waxman-Markey): The University of North Carolina of this region, the American Clean Energy and Security Act topped the competition last year as the marquee program of 2009 and the only climate-related bill to earn the approval of the U.S. House. This year, however, has produced different results—a function both of a tough political environment, and the early departure of some of the effort’s top personnel (again, similar to UNC). Still, like the Tar Heels, the Waxman-Markey bill continues to benefit from a deep fan base, and fervent support among a wide swath of committed and well-heeled alumni. And for once, it can count on having Duke (Energy, that is) on its side.
  2. Kerry-Graham: Little is known about how this (as of this writing, unwritten) bill might hold up under the rough and tumble of the post-season. Still, the appeal of Kerry-Graham lies in its potential to yield an imposing squad of energy and climate All-Americans—a nuclear piece for the SEC, an offshore energy add-on for the ACC, and a nationwide cap-and-trade plan written predominately for the benefit of the Pac-10. Can all these stars survive on the same team—with a limited number of touches to go around?
  3. H.R. 890 (American Renewable Energy Act): Introduced last February—too late to earn a bid to the ’09 field—Chairman Markey’s American Renewable Energy Act would establish a renewable electricity trading program, essentially a inside-out approach to implementing both an RPS and cap-and-trade on the same trip down the court. The bill would also mandate the creation of a Renewable Electricity Deployment Fund—an account paid into by electricity suppliers that have no chance of meeting the 25 percent Renewable Portfolio Standard (RPS) mandate by 2025.
  4. H.R. 1787 (Inslee LCFS bill): Perhaps not as well known to a broader national audience, the Low-Carbon Fuel Standard (LCFS) bill authored by Rep. Jay Inslee (D-Wash.) is seen by many as a dark horse candidate for advancement—assuming early upsets of stiffer competition. Having toiled this past year in the obscurity that comes with being a mid-major, the Inslee LCFS bill has nonetheless pulled together an impressive resume of support, with more than 20 states currently considering a version of the Inslee plan that seeks to creatively (if not entirely effectively) achieve its emissions reductions by putting the kibosh on energy derived from Canada’s oil sands.

Bingaman Region

  1. S. 1462 (American Clean Energy Leadership Act): Analogous to Syracuse in this region, the workman-like energy and climate bill crafted by Chairman Bingaman may not be flashy, but what it lacks in glitz and above-the-rim athleticism it more than makes up for in its ability to avoid the big turnovers—which, in this case, means cap-and-trade. More than that, the Bingaman bill knows how to fill up a stats sheet: incorporating an RPS piece, investments in the so-called smart-grid, several assists for offshore energy, and even a workforce training component.
  2. S. 1462 (Bingaman RPS provisions only): While the comprehensive energy and climate bill reported out by the Bingaman panel this year enjoys broad support in the upper chamber, the chairman of the selection committee happens to reside in the House—and it’s well known she isn’t quite as enamored with this legislation. Given that, the early line appears to be tilted toward a scaled down Bingaman bill emerging as a prime contender in the Senate—keeping in place the bill’s aggressive RPS line-up, while relegating to the bench several components of the bill considered unpopular among the committee’s left-leaning factions.
  3. S. 2877 (CLEAR Act): No different from Waxman-Markey on the fundamental mechanics of implementing an economy-wide cap on carbon emissions, Sen. Maria Cantwell’s CLEAR Act differs from the blue-blood cap-and-trade plans in one significant respect: It seeks to return funds directly to American consumers. A relative new-comer to the field, the CLEAR Act has elicited grumbles from both the power conferences (Democrats) and the mid-majors (Republicans)—but is seen by many as a third-way approach that could score significant upsets as the tournament goes on.
  4. S. 433 (Udall RPS): Modeled on a similar programs in place in the WAC and Mountain West conferences, S. 433, introduced by both Tom and Mark Udall in the Senate, is a straight-up RPS bill—and an aggressive one at that. Like Waxman-Markey, it seeks to mandate that 25 percent of the nation’s electricity come from certain renewable sources, with the notable exception that federal, state, and municipal utilities and co-ops have the option to voluntarily opt into the program.

Jackson Region

  1. EPA Endangerment (mobile sources): In December, EPA declared that greenhouse gases emitted from vehicles represent a danger to the public’s health and welfare, giving the agency a clear lane to the hoop in creating a national program designed to reduce those emissions and ratchet up fuel economy for new cars and trucks. Once the shot clock on this proposed rule hits zero, language in the Clean Air Act (CAA) will be triggered directing Lisa Jackson to regulate stationary sources of carbon emissions—a high-profile pick-and-roll that will have significant implications for the U.S. economy.
  2. EPA Endangerment (stationary sources): Once the tailpipe rule goes final, new requirements for stationary sources regulated under the CAA will be triggered along with it. Of course, EPA also knows that by assigning itself authority to regulate every hot dog vendor in the stands, it may just be booed right out of the gym. In response to that political reality, EPA has proposed a “tailoring rule”—raising the carbon threshold to focus on large emitters only. Without the tailoring rule, smaller facilities such as shopping centers, schools, homes and yes—basketball gymnasiums—would be subject to federal greenhouse gas regulations.
  3. Murkowski Resolution: Earlier this year, Sen. Lisa Murkowski (R-Alaska) introduced a resolution seeking to deny EPA’s fast-break on endangerment. The senator will reportedly demand a vote on her resolution soon, and according to her office, at least 41 senators (including three Democrats) have signed onto the effort. But Murkowski’s call for a full-court press on this issue is more than simply an attempt to cover the spread. Absent a late-substitution by Congress, EPA’s final endangerment determination will likely trigger numerous other CAA provisions, including federal regulation of all mobile sources (marine shipping vessels, aircraft and aircraft engines and non-road vehicles) and stationary source regulations (NAAQS, New Source Review, etc.).
  4. S. 2995 (CAA Amendments of ‘10): Authored by the versatile if not entirely well-known backcourt duo of Tom Carper and Lamar Alexander, S. 2995 would require utilities to broadly utilize emissions-reducing equipment to significantly decrease mercury, sulfur dioxide (SO2) and nitrogen oxides (NOx). Toward that end, it also seeks to establish a nationwide trading system for SO2 and NOx emissions, adding a significant low-post presence to the framework first developed by the Bush administration.

Barton Region

  1. No Bill. With hundreds of battles fought, millions of dollars spent, and more than a little blood, sweat and trash-talk exchanged among those in the top-tier of the contest—what happens if the Final Four participants arrive in Indianapolis, site of this year’s NCAA championship, only to find the final game (and tournament!) has been canceled? At least they’ll have a beautiful stadium to admire—Lucas Oil Stadium, that is.
  2. S. 2776 (Clean Energy Act of 2009): With Tennessee reeling after the dismissal of its star guard/forward earlier this season, and neither Virginia nor Virginia Tech receiving an invitation to the 2010 field, one would think an energy and climate bill written by Sens. Lamar Alexander (R-Tenn.) and Jim Webb (D-Va.) would be DOA on Capitol Hill. Not so fast. Easily the most nuclear energy-friendly bill currently being considered by Congress, the Webb-Alexander plan has received warm praise from both sides of the aisle—even if the offense it puts on the floor is largely one-dimensional.
  3. H.R. 2486 (American Energy Act): A plucky mid-major (think George Mason) whose prospects for victory were far stronger in 2006 than they are today, the House Republicans’ American Energy Act—while still regrettably picks winners and losers—includes a slate of supply-oriented energy provisions that poll incredibly well with the fans, but not so well with the committee charged with choosing this year’s field. A streamlining of the byzantine nuclear permitting process, a robust proposal to expand domestic energy exploration offshore, and a plan to kick-start the nation’s oil shale recovery work—this bill has it all, everything except a bus ticket to get it to the field house.
  4. S. 1462 (Dorgan amendment to American Clean Energy Leadership Act): The Destin Dome may not be hosting any tournament games this March—but it does happen to host one of the largest remaining natural gas fields in the Gulf of Mexico. If the Bingaman team decides to split up the team and pursue free agency, the Dorgan amendment to S. 1462, which seeks to unlock the Dome, is likely to be a highly sought-after addition to any contender in a position to make a final push.

With that, it’s time to sit back, fasten your seat belts (and wallets), and let March Madness on Capitol Hill take hold. Who do we see emerging from the talented field above? Will this year’s tournament turn out to be lay-up line for supporters of government-led action on carbon, or just another air ball?  And we’ve got five bucks that says it’ll be a winner in 2010.

Thomas J. Pyle is the president of the Institute for Energy Research and the American Energy Alliance.