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Energy Lobbyists Flocking to Capitol Hill

Lobbyists on all sides of the global warming, energy and environmental policy debate are getting a warm-up this week as the Senate debates a major climate change bill.

K Streeters say the discussions now are not likely to lead to any new laws this year, especially since President Bush has promised a veto, but instead will help frame the issues for 2009 when the 111th Congress — and a new president — is sworn in.

“I would say there is a broad bipartisan consensus that Congress will enact mandatory emissions reduction legislation by the end of the 111th Congress,” said Philip Clapp, the deputy managing director of the Pew Environment Group, an organization that lobbies for greenhouse gas reductions.

But starting this week and heading into the next Congress, Clapp and his supporters will have to compete with scores of other voices from the oil and gas industry, alternative energy and chemical companies, nuclear advocates and the entire U.S. business community.

In short, energy and environmental policy promises to be one of the hot lobbying issues for the 111th Congress.

Former Rep. Charlie Stenholm (D-Texas), a lobbyist at Olsson Frank Weeda whose clients include the Independent Petroleum Association of America and the American Petroleum Institute, said right now is the crucial time for industry lobbyists to begin educating Congress and the public.

Stenholm, for example, is organizing a briefing in mid-June with a University of Texas professor, Scott Tinker, who will discuss the role of fossil fuels in the global energy future.

“There is a lot more oil and particularly natural gas to be found in the United States, but you can’t keep prohibiting where the drilling is,” Stenholm said, articulating one of his client’s arguments that Congress needs to allow more drilling in the United States.

On global warming policy, Stenholm said lawmakers must take into account the costs to the U.S. economy of adopting strict curbs on carbon emissions if foreign countries such as India and China do not.

“There are too many on the green side that only look at it from their perspective,” Stenholm said. “I used to be one of those who only looked at it from the production standpoint, and I’m willing to admit I was wrong. You’ve got to look at it from all aspects and develop an energy policy for the United States that will allow us to compete — if not we will continue to export jobs.”

When it comes to a cap-and-trade system, a method of reducing pollution by providing economic incentives for reductions, oil and gas companies and chemical and manufacturing representatives say it could be very expensive for Americans.

“The thing about global warming and CO2 suppression is that it’s going to cost money, and the debate will begin to focus on that,” said former Sen. J. Bennett Johnston (D-La.), who counts the Edison Electric Institute as a client. “That doesn’t mean we shouldn’t do it. I’m one of those that thinks that global warming is real and we need to do something to suppress it. That said, the American public hasn’t realized that it’s going to cost real money.”

Johnston said he expects Democrats to post big gains in the 2008 elections and thus have the votes to pass global warming measures, so it’s more a matter of how the legislation will be accomplished, not whether it will happen.

American Petroleum Institute President and CEO Red Cavaney said his organization supports having the debate over cap-and-trade, in part, he said, so the American public is well briefed on the increased costs such proposals could generate.

“We look forward to that,” he said, “and ultimately support a legislative solution to the climate change and energy security issues and feel the two are inexorably linked.”

And American Gas Association President and CEO David Parker, who has been with the group for more than a decade, said “It’s really cap-and-tax.”

But Clapp of the Pew Environment group called such industry concerns over potential costs “a giant red herring.”

“The polluting industries have made that their principal argument on every piece of environmental legislation for the last 30 years,” he said. “That’s the extreme to which industry always goes, and it never proves true.”

When it comes to gas prices, for example, Clapp said estimates say that the Lieberman-Warner bill that the Senate is currently debating would increase gas prices 42 cents between 2010 and 2030.

“That’s not much of an increase,” Clapp said. When it comes to energy and environmental policy in the 111th Congress, alternative sources of energy, such as wind, solar, biofuels and geothermal, will have a seat at the debate and will be looking for government incentives to promote their industries.

Curt Rich, head the public policy practice at Van Ness Feldman, a firm that specializes in energy matters, said he doesn’t expect climate change legislation to move in the first 100 days of the next Congress because of the complexity of the issues.

But, he said, “lessons learned from this dry run” of the Senate debate this week will help frame the dynamic. And he does see certain energy-focused issues passing quickly next year, including a mandate that a certain amount of electric utilities get their power from wind, geothermal, solar and other sources. His clients include the Coalition for Emission Reduction Projects.

In addition, energy and environmental policies will be debated in the context of other bills, including highway legislation, he said.

One of the more controversial potential alterative sources of energy is nuclear power. Environmentalists are split: Some advocate for new nuclear power plants because of their lack of emissions, while others are greatly dismayed at the idea because nuclear power generates nuclear waste.

Derrick Freeman, senior director of legislative programs at the Nuclear Energy Institute, said that in order to reach the goals of such proposals as the Lieberman-Warner bill, nuclear energy must be included as an option.

“We all have the same goal in mind: to deploy clean energy,” Freeman said. “All we ask is that nuclear not be excluded from any discussion as we look at new clean sources.”

As part of the discussions over global warming and environmental policy, many industry advocates are also calling for a comprehensive energy policy.

“When you talk about global warming, energy and environment, the one key component that’s missing is a comprehensive energy policy,” said Jack Gerard, president of the American Chemistry Council. “If global warming legislation is done in a vacuum, everybody loses. What we need to do is combine comprehensive energy policy with a global warming resolution.”

His member companies use natural gas as a raw material to manufacture products, and Gerard said the high prices have hurt his sector.

“Those of us who compete in a global economy, we have to go elsewhere to get our natural gas supply,” he said. “We move to the Middle East, where you can get natural gas for 75 cents, instead of $12 per million BTU.”

While climate change and carbon reduction bills will likely grab most headlines next year, other environmental and energy measures will also likely find their way onto the Congressional calendar. AGA, whose members include natural gas utilities such as Washington Gas, will be pushing for programs for energy assistance for low-income Americans.

And Gerard’s ACC will lobby for tax credits for energy efficiency and other incentives to create new forms of technology. But Gerard was quick to point out that he does not want Congress to put the “cart before the horse” by mandating technology that does not yet exist. “That’s backward,” he said.

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