Change in Energy and Commerce Committee Leadership Will Effect Energy Sector
Representative Henry Waxman (D-CA)’s chairmanship of the Energy and Commerce Committee could bring sweeping changes to legislation affecting climate change and the energy sector.
The sweeping change which came to D.C this November has certainly been felt in the House Democratic Caucus, where on Nov 28, John Dingell (D-MI), one of the longest serving chairs of the Energy and Commerce Committee was narrowly defeated by Waxman. This represented a blow to the seniority system of chairmanships which has been the rule in the Democratic Caucus for decades now – and the new chairmanship f this influential committee may represent many changes coming down the pike for the 40% of the U.S. economy whose activities are regulated by the committee.
These sectors include the health care, pharmaceutical and biotech energies as well as the energy sector. The committee also has regulatory oversight for the FDA, the SEC and a number of other federal agencies. Waxman has a long track record as an aggressive reformer as chairman of the Committee on Oversight and Government Reform…
There may be especially big changes coming for the renewable and energy efficiency sectors of the energy industry, with climate change expected to be a high priority for the incoming Obama administration. Waxman is out ahead of Dingell on many of these issues, particularly as Dingell is known as a supporter of his home state’s automotive industry and a friend to business interests in general. Waxman is considered to be more likely to push for building a “green economy” and to work towards concrete steps to reduce the impact of global climate change.
What will be the energy and environmental priorities of the incoming administration?
Given the economic plight the nation finds itself in, many project that the Obama administration will set aside a planned cap-and-trade system for the time being and focus on economic recovery. As a part of this, the prediction is that the Obama administration will instead put their environmental legislation efforts into the creation of the five million “green jobs” which President-Elect Obama spoke of on the campaign trail. Akin to the public works programs instituted by President Franklin Delano Roosevelt during the Depression, this program would attempt to put out of work Americans into new jobs focused in the improvement of the national electrical grid, environmentally friendly construction projects and “greening” elements of the already existent energy infrastructure.
Others have said that they expect Obama to assert a more aggressive environmental agenda, capitalizing on his momentum and political capital to push through a cap and trade program to lower CO2 emissions by U.S. businesses and make good on his promise to implement more stringent CAFE (Corporate Average Fuel Economy) standards for vehicles as well as encourage U.S. auto manufacturers to produce more hybrids. Representative Waxman’s chairmanship of the Energy and Commerce Committee lends credence to these predictions.
Long a proponent of a national cap and trade program, Waxman is also a supporter of implementing tougher auto emissions and fuel economy standards – a stark contrast with outgoing chairman Dingell, who has often being accused of being too close to his home state’s auto industry to be a truly effective overseer of it. In October of this year, Dingell’s office produced a 461 page discussion draft; this was the Dingell-Boucher Bill, which was warmly received by environmental and business groups alike. Until Waxman’s elevation to the chairmanship of the Energy and Commerce Committee, this bill was seen as a likely starting off point for legislative efforts to combat climate change in the 11th Congress.
The Dingell-Boucher draft bill proposed a gradual tightening of emissions standards to produce an 80% reduction in greenhouse gas emissions (as measured in 2005) by 2050. Waxman drafted a much more aggressive piece of legislation, the Safe Climate Act of 2007 (no action has yet been taken on this draft). Waxman’s draft envisioned an 80% drop in greenhouse gas emissions by 2050, measured from 1990 emissions levels. Implementation is left largely unaddressed in the draft; the EPA administrator would have to take the lead on putting the legislation into effect if adopted and signed into law. Waxman is also in favor of a total ban on new coal fired power plants which do not implement carbon capture technologies.
If Chairman Waxman is able to move on these issues, the Obama Administration may either follow his lead or President-Elect Obama may move to set the agenda himself. Waxman’s elevation to head of this influential committee may spur the Obama administration to introduce a package of environmental legislation including both a green jobs initiative as well as a cap and trade program. It should be mentioned that a former aide to Henry Waxman, Phil Schiliro, has been appointed by Obama as his liaison to the House of Representatives. It is very likely that initiatives for both a green jobs program and a cap and trade scheme are likely to be high on the legislature’s agenda going into 2009. For a more detailed look at President-Elect Obama’s Energy Policy Proposals, see McDermott On the Subject “Obama Presidency Signals Change in U.S. Energy Policy,” published November 17, 2008.
The Practical Impact: Will Government Incentives Prove To Be More Attractive To Businesses?
Even if no cap and trade program is implemented in the next year, Waxman’s chairmanship is significant; there will almost certainly be new environmental legislation which promotes green energy and other environmentally friendly technologies. With the current difficulties of obtaining credit for new research and development in the private sector, it is likely that many “green” companies will seek the aid of federal grants, such as the U.S. DOE (Department of Energy) advanced technology loan guarantee program, a $38.5 million program. The DOE will be allotting as much as $10 billion to energy efficiency, electric transmission and renewable energy projects and as much as $8 billion for advanced, more environmentally friendly fossil fuel technology projects.
The policy goals articulated by President-Elect Obama and those of soon to be Chairman Waxman are certainly encouraging for those companies in the alternative and renewable energy sectors – it is a near certainty that an Obama administration will mean more funding and more support at the federal level for their efforts.
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