Robert Novak is a famous Washington policy writer and columnist. He is not friendly to environmentalism, so his present article is very rewarding to those that do think highly about environmental issues. His article tells us that Washington and US business are taking notice of the fact that the American people are now speaking up more frequently about the environment - they did so in the November 2006 elections, and the writing is there on many walls that they intend to do so in the 2008 elections. The real value we see in Novak’s article is that he points out clearly that the Democratic coalition is also filled with old-industry and old-labor old-guard types. He mentions by name two of them that, because of seniority, are going to chair important committees and will try to be in the way of progress. Because of this we continue to say that we give our trust to the American people that have proven now that they can see further afield then the leaders, so, eventually, our optimism says that they will manage to win the day.  SustainabiliTank.info comment)

Losing to the Greens, by Robert D. Novak.
Monday, December 25, 2006; Page A29, The Washington Post.

“I’ve never seen industry so deathly afraid of the current politics surrounding climate change policy,” a Bush administration environmental official told me. With good reason. As Democrats take control of Congress, once-firm opposition to the green lobby’s campaign of imposing carbon emission controls is weak.

Panicky captains of industry have themselves largely to blame for failing to respond to the environmentalists’ well-financed propaganda operation. One government official says “industry appears utterly helpless and utterly clueless as to how to respond.” But the Bush administration itself is a house divided with support for greens and severe carbon regulation inside the Energy Department, reaching up to the secretary himself.

None of this necessarily means climate change will become law during the next two years, with President Bush wielding his veto pen if any bill escapes the Senate’s gridlock. Rep. John Dingell of Michigan, reassuming chairmanship of the Energy and Commerce Committee after a dozen years’ absence, will try to protect the automotive industry from draconian regulation. But over the long term, industry is losing to the greens.

The stakes are immense, as shown by the impact of the bill to implement the Kyoto proposal co-sponsored by Sen. John McCain, front-runner for the Republican presidential nomination, and Sen. Joseph I. Lieberman, the favorite Democrat of many Republicans. The U.S. Energy Information Administration estimates that this measure would reduce gross domestic product by $776 billion annually, raise gasoline prices 40 cents a gallon, raise natural gas prices 46 percent and cut coal production by nearly 60 percent. Charles River Associates, business consultants, predicts that it would kill 600,000 jobs.

Yet, Jonathan Lash of the World Resources Institute said last week that McCain-Lieberman does not go far enough in reducing carbon emissions. Green extremists would prefer the severe legislation proposed by Sen. Barbara Boxer, the new chairman of the Environment and Public Works Committee.

According to industry sources, Dingell has privately advised auto industry lobbyists to prepare for the worst. House Speaker-designate Nancy Pelosi is making carbon emission legislation a priority, and Dingell has warned Detroit that she expects him to move a bill through his committee. He will do his best to modify legislation, but he is obliged to follow Pelosi’s wishes and cannot play Horatio at the bridge.

The same dilemma faces Rep. Rick Boucher, a staunch ally of the coal industry who will become chairman of the Energy and Commerce subcommittee on energy and air quality. He must balance Pelosi’s desires with the interests of the coal counties in his southwest Virginia district.

Staunch foes of carbon regulation remain in the administration, headed by Chairman James L. Connaughton of the Council on Environmental Quality. But the Energy Department’s top executive strata have gone green.

Since moving from deputy treasury secretary to energy secretary nearly two years ago, business executive and financier Samuel W. Bodman has kept a low profile. In a rare public utterance on global warming Oct. 5, 2005, he said an “increasing level of certainty” about global warming fueled by carbon dioxide “is real” and “a matter we take seriously.” In private meetings, he has expressed dissatisfaction with administration policy. Bodman’s undersecretary, former Senate staffer David K. Garman, has shocked industry lobbyists with his criticism of the president’s views.

In the background is a pending Supreme Court decision on what the Clean Air Act requires or permits the Environmental Protection Agency to do about greenhouse gas emissions. Even if the court says the authority is merely discretionary, McCain or any Democratic president would then crack down on industry if nothing is passed before the 2008 election.

Ultimate salvation from U.S. self-destructive behavior may come from the real world. Most European Union countries, suffering higher energy costs and constraints on growth imposed by the Kyoto pact, cannot meet that treaty’s requirements for emission levels. Furthermore, China is on pace to exceed U.S. emissions by 2010, meaning that unilateral U.S. carbon controls will have little impact on global emissions while driving American jobs to China.

This downside of Speaker Pelosi’s green determination ought to resonate in union halls and coalfields of Pennsylvania, Ohio and West Virginia. However, American industrialists, while wringing their hands, are not making their case.

For further clarification, SustainabiliTank.info is posting two articles that put some meat on the bare-policy-bones as depicted in the Novak column: 

(1) The Seatle Times points out - “Dems plan renewable energy fund paid for by big oil.”
by H. Josef Hebert, The Associated Press, December 26, 2006.

WASHINGTON – House Democrats in the first weeks of the new Congress plan to establish a dedicated fund to promote renewable energy and conservation, using money from oil companies.

That’s only one legislative hit the oil industry is expected to take next year as a Congress run by Democrats is likely to show little sympathy to the cash-rich, high-profile business.

Whether the issue is rolling tax breaks — some approved by Congress only 18 months ago — pushing for more use of ethanol and other biofuels instead of gasoline, or investigations into shortfalls in royalty payments to the government, oil industry lobbyists will spend most of their time playing defense.

Details of a renewable fuels fund have yet to be worked out. Nonetheless, it’s one of the initiatives the House will take up during its first 100 hours in session in January, according to aides to Speaker-elect Nancy Pelosi. At least some of the money — revenue gained by rolling back some tax breaks — will go to a program to support research into making ethanol from sources other than corn.

“What we’ll do is roll back the subsidies to Big Oil and use the resources to invest in a reserve for research in alternative energy,” Pelosi, a California Democrat, recently told reporters.

But the oil issue likely to be first out of the legislative block in January concerns the ability of the federal government to recover royalties many lawmakers believe have been unfairly avoided by oil and gas companies drilling in deep waters of the Gulf of Mexico.

The Interior Department has been trying to get more than 50 companies to rework 1998-99 drilling leases that allow the companies to avoid paying billions of dollars in royalties because of a government mistake in writing the leases. Recently five companies agreed to a compromise to pay royalties on future production under the leases, but not from oil and gas already taken from the federal waters.

Most of the other companies argue that the leases represent a binding contract and have not even talked to Interior officials about them.

The industry intransigence has upset many in Congress, both Republicans and Democrats, who say they want to find a way to force the companies back to negotiations on the flawed leases. One approach is legislation barring companies from bidding on future leases unless they agree to renegotiate the flawed ones.

“There will be a new cop on the beat to force every big oil company that is currently lining its pockets with taxpayer dollars to come back to the negotiating table,” Rep. Edward Markey, D-Mass., declared.

Pelosi calls the royalty avoidance from the 1998-99 leases the biggest oil industry subsidy issue she intends to tackle early. Congressional estimates have put the potential royalty loss at as much as $10 billion over the life of the leases.

Rep. Henry Waxman, D-Calif., the incoming chairman of the House Government Reform Committee, has promised to continue pressing the Interior Department on the matter, which also has been the subject of extensive hearings under GOP leadership.

Recently Waxman and Rep. Tom Davis, R-Va., the committee’s departing chairman, asked the Justice Department to review Interior’s claim that royalties legally cannot be collected from past production under the leases.

House Democrats also are targeting a handful of oil industry tax breaks for repeal. Both Republican and Democratic lawmakers say there is unlikely to be an attempt to push more sweeping measures such a new tax on the oil industry’s windfall profits.

Members of both parties have said they also want to make another stab at passing a federal law against oil company price gouging, an issue that will gain momentum should oil and gasoline prices again soar amid huge industry profits.

At the top of the hit list is a tax break that was aimed at promoting U.S. manufacturing but has provided a windfall for the oil industry as well. The provision reduces the corporate tax rate on profits from products made in the United States.

As for oil companies rolling in profits with $60-a-barrel crude, it is “a break they didn’t earn, deserve or need,” says Rep. Jim McDermott, D-Wash. McDermott tried to eliminate the tax break in May but was unsuccessful. He estimates that oil companies are saving as much as $700 million in taxes a year because of it.

Democrats also are targeting other benefits for refinery investments and for expenditures for certain types of oil and gas exploration. Those measures, passed by Congress last year as part of a broad energy bill, are estimated to cost the government about $1.3 billion over 10 years.

Executives of the largest oil companies have said they don’t need those tax breaks and do not oppose their repeal. Congress earlier this year already eliminated the tax incentive on exploration for the five largest companies.

Oil lobbyists, however, are preparing to fight another proposal that would raise taxes on their inventories, a change that could cost oil companies billions of dollars. The inventory tax provisions cover the entire industry and some lawmakers want to repeal them only for the biggest companies.

“That would significantly raise the cost of holding inventory” and cause companies to reduce the amount of oil they keep in storage, said Red Cavaney, president of the American Petroleum Institute, the industry trade group. If that happens “prices will go through the roof” if there is even a modest disruption, he predicted.

The White House is not opposed to rolling back some of the tax breaks that Congress approved last year. President Bush has said the industry doesn’t need the subsidies given today’s oil prices and industry profits.    SustainabiliTank.info is quite impressed by these two and a half lines - is it true?)

But the administration is opposed to tinkering with some of the other tax rollbacks under consideration including the one on inventory taxes. The Interior Department also has said it wants to work with Congress to find ways to deal with the royalty issue, but is worried the proposal to bar companies from future leases could throw the federal offshore leasing program into lengthy litigation.

“Our fear is our (leasing) program would shut down. That would have a multibillion-dollar impact on federal revenues,” Assistant Interior Secretary Stephen Allred recently told reporters.

Oil industry lobbyists also expect a Democratic push to further expand production of ethanol as a gasoline additive and don’t see that as a threat to their business. A more contentious issue will be attempts to require large oil companies to make available fuel that is 85 percent ethanol, so-called E-85, at some of their retail outlets.

(2) USA Today brings a December 26, 2006 Reuters, seemingly intentionally alarming Report from Detroit:
                   “GM blasts proposed change in U.S. fuel economy rules.”
 A proposal to increase the U.S. fuel economy standards would force Detroit-based automakers to “hand over” the market for trucks and sport-utility vehicles to Japanese manufacturers, a senior General Motors (GM) executive said.
Bob Lutz, GM’s vice chairman and the head of global product development, said the proposed changes to the government’s Corporate Average Fuel Economy, or CAFE, standards would represent an unfair burden on the traditional Big Three automakers.

“For one thing, it puts us, the domestic manufacturers, at odds with the desires of most of our customers, namely larger vehicles,” Lutz said in a year-end posting on a website maintained by GM. “That effectively hands the truck and SUV market over to the imports, particularly the Japanese, who have earned years of accumulated credits from their fleets of formerly very small cars.”

Lutz, a longtime critic of government fuel economy regulations, compared the attempt to force carmakers to sell smaller vehicles to “fighting the nation’s obesity problem by forcing clothing manufacturers to sell garments only in small sizes.”

A group called the Energy Security Leadership Council, which includes more than a dozen prominent U.S. executives and retired military officers, issued a report earlier this month calling on Congress to take steps to reduce the reliance on imported oil. The group called for tougher fuel economy regulation, including a 4% annual increase in CAFE standards, which have been held essentially flat for the past decade.

In a related move, the Consumer Federation of America released a study last month showing that nine of 13 major automakers had a fleetwide average fuel economy performance that was lower in 2005 than it had been a decade ago.

Auto executives have argued that the industry’s flat overall fuel economy in recent years reflects the strong preference for trucks and SUVs by American drivers, a point Lutz made in his Internet posting.

“As long as (gas) is around $2 per gallon here, people will exercise their freedom to buy the vehicle they want, V8 engine and all,” he said. “Forcing us to alter the fleets to hit some theoretical average won’t change what consumers want, or what they’ll buy.”

GM said last month that it would launch an electric hybrid vehicle, a step environmentalists have hailed as a way to reduce both oil consumption and greenhouse gas emissions.

Lutz said GM would provide more details on developments in that area at the Detroit Auto Show in January, but he added that much of the available technology to improve gas mileage was already on the road.   (So why in the world don’t they use it - why will we eventually import trucks from China- not even from japan? This because the lower fuel consumption of their products will be winning over our attention! Even US labor will want a car that is fueled for less! - SustainabiliTank.info comment)

“There is no technological bag of tricks that enable much better fuel economy than we have today,” he said. “Despite what the alarmists may think, we don’t have any magic 100-mpg carburetor that we’re holding back because we’re in bed with the oil companies.”

The CAFE standard, an average applied across a fleet of vehicles, is currently 27.5 miles per gallon for cars and 20.7 miles per gallon for trucks and SUVs weighing less than 8,500 pounds.

Under the 30-year-old law, automakers face fines for failing to make the average fleet standard. Automakers can also earn CAFE “credits” to offset shortfalls in future years, a situation that applies to Japan’s Toyota Motor and Honda Motor.