Climate Change

March was a busy month for the House Energy and Commerce Committee as it worked its way through numerous hearings on various aspects of climate change legislation.  One important scheduling issue emerged.  While House Speaker Nancy Pelosi had made it clear that she expects climate change legislation to be voted upon prior to the July 4th recess, the leaders of the Energy and Commerce Committee were able to convince her that a credible greenhouse gas cap-and-trade bill could not be put together in that short amount of time.  Therefore, the House will vote on some energy efficiency and research bills, but not a greenhouse gas reduction bill, prior to July.

INGAA submitted its response to the climate change letter from Chairman Dingell and Chairman Boucher on March 19 (the INGAA Board received a copy of that submittal).  We subsequently received a separate request for information from senior Energy and Commerce Committee Republicans Joe Barton and Dennis Hastert.  The Barton/Hastert letter focuses heavily on technology development and the economic impacts of climate change mitigation.  Replies are due by April 19, and the INGAA Climate Change Task Force is already working on our response.

A disturbing pattern is emerging from the hearings being conducted in the House.  Policymakers from both parties are expressing skepticism about the use of natural gas for power generation and articulating a strong belief that a greenhouse gas reduction program will put too much pressure on natural gas as a fuel source.  Ranking Republican Committee member Joe Barton went so far as to compare his personal electric bills for his home in Texas and his condo in Virginia, pointing out that his Texas bill is 300 percent higher per kilowatt-hour.  Barton stated:

“The difference is that in Texas, almost every new power plant built in the last 20 years was fueled by natural gas. Natural gas prices got up to about $14 a thousand cubic feet last year. Now they’ve come back down to about $8. TXU hasn’t seen fit to lower its price, but that’s another story. Texas just became too dependent on natural gas and consumers are paying for it. Dominion, probably thanks to the good work of Chairman Boucher, has got a diversified power mix. I think they produce 60 to 70 percent of their power from coal. Right now the differential between coal and natural gas is about 4-to-1. Natural gas is about four times more expensive as coal.”

The Barton comments are instructive, but not unique.  Not one member of the Committee has pointed out that natural gas will be important to meeting overall greenhouse gas reduction goals.  While a return to Fuel Use Act-type restrictions is unlikely, even now, the current rhetoric may very well create some problems down the road with things like research and development priorities.  If Congress is convinced that natural gas should be discouraged as a power plant fuel, for example, then they are unlikely to fund R&D for more efficient gas technologies. 

There are several other important new items in regard to climate change legislation.  First, the Senate is still stuck in slow gear on the issue.  Senate leaders are clearly deferring to the House at this point.  Somewhat related, senior Senate Energy Committee member Pete Domenici stated on March 26 that he would “kill” any climate change bill “if we haven’t taken some giant strides in the direction of getting China and/or India to join with us.”  The concern about developing country participation in an international mandatory greenhouse gas reduction effort is common across Capitol Hill and is emerging as a central barrier to enacting legislation.