Waxman-Markey climate bill a wish list for Duke Energy?

While it's a sad fact that corporate and industry interests regularly write the basis for much of our Federal legislation, there has been some impressive political maneuvering from the coal and utility industry around the Waxman-Markey American Clean Energy and Security (ACES) Act. In many ways, the ACES bill reads like a wish list for the coal industry - from multi-billion dollar handouts to the coal industry for carbon capture and sequestration (CCS), to allowing enough offsets to for no reduction in domestic emissions for decades and beyond.

Today, a story in the Washington Times (admittedly, not the most objective paper) ran which called out an exemption in the bill for Duke Energy and other utilities that have coal power plants already permitted or under construction. While ACES has some regulation around new coal plants (requiring retrofits by 2015 with an unproven CCS technology that doesn't exist yet) - these exemptions would effectively grandfather in two Duke Energy plants currently proposed  - Cliffside in North Carolina and Edwardsport in Indiana.  Not coincidentally, Duke Energy has had a strong role in shaping the ACES bill, from helping draft the US-CAP blueprint that provided the basis for ACES, to having CEO Jim Rogers testify before the House Energy and Commerce Committee hearings on the bill.

While many people saw ACES as a good first step but needing improvements - the bill seems to be getting worse and worse, rather than better.  When the loudest voice from the "environmental community" is from the Duke-led US-CAP - it's time our movement rolls up in sleeves and starts pushing back to ensure meaningful legislation that will stop the climate crisis, and build a just economy based on clean energy. Right now we are being outplayed by industry - and it's nothing less than our future at stake.

EXCLUSIVE: Lobbyists help Dems draft climate change bill

Lawmakers bristle at Bush parallel

By Tom LoBianco Monday, May 4, 2009

Democratic lawmakers who spent much of the Bush administration blasting officials for letting energy lobbyists write national policy have turned to a coalition of business and environmental groups to help draft their own sweeping climate bill.

And one little-noticed provision of the draft bill would give one of the coalition's co-founders a lucrative exemption on a coal-fired project it is building.

House Speaker Nancy Pelosi and House Energy and Commerce Committee Chairman Henry A. Waxman, both of California, were among the Democrats -- then in the minority -- who slammed Vice President Dick Cheney for holding closed-door meetings to draft energy policy early in the Bush administration.

Republicans "invited energy lobbyists to write the energy bill that gouges consumers with big payoffs to Big Gas and Big Oil," Mrs. Pelosi said in 2005. "They have turned Washington, D.C., into an oil and gas town when it is supposed to be the city of innovation, of new, of fresh ideas about our energy policy."

But the sweeping climate bill Mr. Waxman and Rep. Edward J. Markey, Massachusetts Democrat and chairman of the panel's key environmental subcommittee, introduced at the end of March includes a provision that benefits Duke Energy Corp., a founding member of the U.S. Climate Action Partnership (USCAP), whose climate plan released in January the lawmakers have frequently called a "blueprint" for their climate legislation.

The exemption would save Duke Energy -- along with other firms now building new coal power plants -- from having to spend millions of dollars outfitting its Cliffside, N.C., power plant currently under construction with "clean coal" technology.

"The USCAP companies must be delirious over the freebies that they've received after writing the blueprint for [the House draft bill]," said Larry Neal, deputy Republican staff director for the House Energy and Commerce Committee.

At the kickoff to hearings last week on the massive climate bill, Myron Ebell, climate and energy policy director for the Competitive Enterprise Institute, told lawmakers, "The authors of the draft bill have invited the beneficiaries of what could turn out to be the biggest transfer of wealth from consumers to special interests in American history to write the rules for this legalized plunder."

A spokeswoman for Mr. Waxman rejected any parallel with the previous administration.

"It's just not a fair comparison," said Karen Lightfoot, spokeswoman for Mr. Waxman, saying the process for the climate bill had been far more transparent.

Members of the Cheney energy task force crafted energy policy in secret in 2001, and Democratic lawmakers spent months battling the Bush administration to release records of the meetings, she said.

By contrast, Mr. Waxman's committee has held dozens of hearings on the topic of climate change, and USCAP's blueprint has been publicly touted since its January release, Ms. Lightfoot said.

It was USCAP that provided language to the Waxman-Market draft that effectively bars construction of new coal-fired projects for 10 to 15 years, until "clean coal" technology is developed. The draft bill has language that effectively shields Duke and few other energy companies from the restrictions for unfinished plants already well along in the permitting process.

Mr. Waxman and Mr. Markey have said they used USCAP's climate-change proposal as a "blueprint" for the broad-based legislation they outlined in late March and are starting to put into final form.

At a January hearing, Mr. Waxman promised the USCAP ideas would be written into climate legislation.

USCAP's members include environmental advocacy groups such as the Natural Resources Defense Council and the Environmental Defense Fund and corporate giants such as PepsiCo Inc. and Ford Motor Co., in addition to many of the nation's top energy providers.

Critics say the little-noticed provision affecting the Duke Energy coal plant is a prime illustration of the close links between industry and environmental lobbies and the bill's authors.

Supporters of the exemption say it would protect energy companies from having to scrap coal projects well under way. Critics say the provision amounts to the same type of handout Democrats accused Republicans of approving eight years ago.

Duke Energy spokesman Tom Williams would not disclose whether his company requested the language, but said an exemption makes sense.

"When you're building a plant, it's not good practice to have legislation that somehow retroactively hinders the permit," Mr. Williams said. "You can't operate a business that way."

The House draft bill says any coal plant that obtains final construction approval after Jan. 1, 2009, must meet the stringent pollution control rules. Duke Energy has two new coal projects under way, both of which obtained their permits in January 2008.

Duke Energy Chief Executive Officer Jim Rogers has been an influential voice in the Hill debate over climate change. When he testified last month on a panel of USCAP members, he did not mention the provision, which directly affects the Cliffside plant.

The exemption would benefit 45 other coal facilities that are under construction or have received permits (including a second Duke Energy project in Indiana), but Duke Energy is the only affected company that belongs to USCAP.

Many environmentalists have chafed at new coal plant construction, calling the term "clean coal" a "dirty lie." More than 40 environmental activists were arrested outside the Cliffside plant protesting the coal project late last month.

"It is just the most blatant hypocrisy," Jim Warren, executive director of North Carolina Waste Awareness and Reduction Network and one of the 44 protesters arrested, said of Mr. Rogers' environmental proclamations.

Mr. Rogers told North Carolina public officials in 2007 that he would actively lobby to exempt the Cliffside plant from stricter pollution standards.

"So you're going to be lobbying in Congress essentially to have Cliffside be grandfathered?" Gudrun Thompson, a lawyer for the Southern Environmental Law Center, asked during a January 2007 hearing on the project.

Mr. Rogers said he thought the plant would be grandfathered "because it's perceived by the government as we perceive it, as a clean coal plant."

Committee staff confirmed that the provision exempting the Duke coal project was drawn from the USCAP blueprint.

"We've been very clear that we do not advocate for any provision or recommendation, we advocate for the document as a whole," USCAP spokeswoman Katie Mandes said.

"USCAP felt it was important to include a proposal for emissions standards going forward, that's why it was included in the blueprint," Ms. Mandes said.

Mr. Williams said it is not certain that the Cliffside plant would be exempted from the new requirement, because of a question whether a pending legal challenge to the project would affect its permit status.

The provision in the Waxman-Markey bill would effectively ban construction of new coal plants for the next decade by requiring them to install "clean coal" technology that captures and stores carbon emissions to limit greenhouse gas emissions.

The climate bill introduced in the previous Congress by House Energy and Commerce Committee Chairman John D. Dingell, Michigan Democrat, and energy and air quality subcommittee Chairman Rick Boucher, Virginia Democrat in October included a similar exemption for coal-fired plants.

Duke Energy donated $11,000 to Mr. Dingell and $10,000 to Mr. Boucher during the 2008 election cycle. Mr. Dingell and Mr. Boucher still held their respective chairmanships at that time.

Duke's North Carolina project would face major hurdles without the exemption. Although the company could retrofit the plant to capture carbon emissions, it would have to pipe the carbon dioxide out of the state because no good geological storage sites are nearby.

The second Duke Energy coal-powered project under construction, a coal gasification plant in Indiana, also would be exempted by the provision, but would have less trouble retrofitting with "clean coal" technology.

Members of the House Energy and Commerce Committee will take up the climate bill again this week in subcommittee. Mr. Waxman and Mr. Markey have said they want the full bill to be reported to the House floor by Memorial Day.