Obama Goes Full Court on Energy Legislation

Fresh off their introduction of a financial system regulatory proposal, the Obama administration is now shifting gears and going all out for passage of energy legislation in the House. They call it “energy week” and it’s intended to get a lot of the Democratic fence sitters to commit to the program and get a vote on the floor next week.

The administration is taking some flack from the “green” left for not pushing hard enough. In fairness, they have so many things to push, I’m not sure they have enough backs to bend to the task. Nevertheless, this one is proving to be a tough nut or maybe it’s going to be the first in a line of tough nuts.

Politico estimates that as many as 50 Democratic members of the House are dodging and weaving on this one. Many are the so-called “blue dogs”, a coalition of members representing conservative districts that were swept in during the Democratic victories in the last two elections. They hail largely from mid-western and southern states and often have a sizable rural or semi-rural constituency. Bottom line, their districts tend not to put a great deal of stock in “green” initiatives.

Politico frames their concerns:

Rural Democrats fear the cap and trade system included in the bill could raise costs for farmers and agribusiness. They’re pushing for greater oversight of the program by the Department of Agriculture and changes in how the bill allocates emissions credits to electricity companies.

Moderates worry about increased costs for consumers and businesses, particularly as gas prices continue to rise. And vulnerable Democrats from swing districts argue that the bill could open them up to Republican attacks that they are placing an “energy tax” on already-strapped consumers.

I don’t quite understand that passage. So far as I know the only way cap-and-trade or any other scheme works is to raise the price of carbon production. Since producers aren’t in business to lose money, the cost is going to be passed on to the user. I wish these troubled Democrats success in squaring the circle of enacting this legislation without causing any financial distress to anyone.

Comments

[Shale Gas:]

The Obama administration has other proposals on Energy that have not gotten as much publicity. These proposals would alter our tax code. They include repealing the tax credits for enhanced oil recovery projects and stripper wells, and the repeal of expensing of intangible drilling costs.

Jun 18 09:30 AM

[finmah@yaho...:]

When Congress balks at a radical initiative the media starts to break the country into constituencies - in this case the Southern states and farmers are not progressive enough to pay higher costs for energy under a very dubious assumption that this will have any effect on a still undefined global environment benchmark.

The other insinuation is that they have to be mindful of their voters and therefore are concerned about the cost to consumers along with an untimely depressive effect on the economy. Does this mean the other group proposing this is doing the opposite?

Did the congressman who are pushing for this penalty tax on carbon just not endorse a trillion dollar stimulus that included widening, paving and building new roads and bridges on a massive scale? Does anyone have any idea how much money has been spent on promoting cars over the last 30 years only to turn around and tax the individual user.

Are there not industries that have a financial stake in this carbon tax such as alternative energy, rail, nuclear, and nat gas? This is not highlighted in such articles since this is all purportedly for the common good.

I think singling out Southern districts is distracting -because together with the Republicans they are the majority - it is the minority representation presenting this bill that needs to have their constituencies brought up for discussion. But then again that might damage the argument even further since a Kyoto agreement was voted on by the Senate around 1998 and I don't think anyone voted for it. Has anything dramatically changed since then?

Jun 18 10:03 AM

[Prudent Man...:]

Politicians are smarter than end users and providers? Since when and where is the evidence?

It is politicians who bowed to partisan pressure groups, who are basically anti-Free Enterprise and protected competition, who were the creators of inefficient, irrational politically-motivated laws that reduced supplies and made this country more dependent on foreign sources of energy.

The classification of SUVs as trucks in the mid-1990s in order to circumvent that same administration's CAFE standards is a point of fact.

Jun 18 10:25 AM

[Shale Gas:]

We must begin to convert our transportation fuel dependence from oil (gasoline) to natural gas. This will take a generation and cost billions, but it will improve our energy security by reducing dependence on foreign sources of oil, and soak up the coming huge increases in natural gas production from shale plays in North America.

Jun 18 12:32 PM

[Oil Bull_1974:]

As the article mentions, this legislation will increase the cost of producing oil & gas in the US. However (and unfortunately for the producers), the market for oil & gas is global and these extra costs are not "going to be passed on to the user" - it will simply cause US production to drop and kill high-paying jobs in the energy sector. But, then again, these are mostly in red states (esp. Texas), so why should Obama care? Bottom line: raising domestic costs in a global market = outsourcing to countries who don't care (read: China).

Jun 18 02:32 PM

[one eye:]

There is going to be a big Cat fight over Shale gas and the method of extraction.

Good luck in continuing to pollute the Water Table as Shale Gas meets Environmental opposition.

Jun 18 03:15 PM

[TCK:]

Just paid my natural gas bill yesterday. Total bill was $15.00. Cost of actual gas used was $3.00. The rest was taxes, fees , delivery charge, etc.

Electric bill, phone bill, all contain same.

Look for more hidden taxes and charges to be added to energy.

Jun 19 09:21 AM

[Steve Ward:]

Obama, himself, has stated consumer costs will go up on a cap and trade system. so what's the big deal. The Dems pass the legislation and then don't enforce it. They do that alot. Pay homage to the greenies and not put teeth in the bill so the "folks back home" don't have to pay up. Otherwise, can you say "Republican Majority Congress".

Jun 19 10:31 AM

[Mmarrkk:]

One eye: you obviously don't even have one good eye! Can you show proof, not some clap trap, that any water table polution has occurred as a result of shale gas drilling? there was a leak in a waterpipeline that caused a few fish to die, but that was a leak on the surface and wasn't related to shale gas drilling. And it appears that this was a case of vandalism according to later reports.

Shale gas resides several thousand feet below the water table. Sorry, your premise just isn't believable. Of course, we could stop drilling for shale gas, watch the cost of natural gas go back to $13/mmBtu and watch the cost of electricity, plastics, fertalizer, etc. shoot up as nat gas is a basic material and/or fuel for a huge number of our industries. But the greenie weenies don't really care about industry, companies and workers. And I'd put Obama and Chu in that bucket.

My only hope is that Obama's domestic agenda fails, fails quickly, fails completely, fails repeatedly.Nothing he is proposing will do any good for this country. Fail, baby, fail! Viva 'la GRIDLOCK!!!! No action is better than Obama's action!


On Jun 18 03:15 PM one eye wrote:

> There is going to be a big Cat fight over Shale gas and the method
> of extraction.
>
> Good luck in continuing to pollute the Water Table as Shale Gas meets
> Environmental opposition.

Jun 19 11:04 AM

[Ferdinand E...:]

Cap and trade isn't just bad, it's crazy. It hasn't worked in Europe. But I can understand why the drowsy TV audience likes it. They think that it won't cause them any problems.

I can also understand why the government people in the US and elsewhere like it. I forgot to discuss it the way that I should have discussed it in my energy economics textbook. I could be wrong - and probably am - but if I had really torn into that crazy scheme, maybe Dr Chu would have gotten the message.

Jun 19 12:17 PM

[Dubious Bro...:]

The technology for changing our transportation fuel from gasoline to natural gas has been available for years. There is plenty of fuel available in America and we can tell OPEC to sell elsewhere. The only drawback is the refueling network which does not exist.

Now that the Government/Green geniuses are running GM they can lead by example and build only natural gas burning vehicles - as soon as the lawyers and the union leaders finish dividing up the bailout money of course.

Jun 19 01:56 PM

[TinyTim:]

Since when did members of the House start thinking on their own (not to be confused with thinking for themselves). They don't read this stuff, they listen to the loudest ($$$) lobbyists.

Jun 19 02:30 PM

[Jimbo:]

I am with Dubious Bro and Shale Gas. We should have started converting as much of our transportation system to natural gas as quickly as possible years ago. The Totalitarian Utopian Greenies ("TUGs") have been systematically starving the nation of energy, hoping the tooth fairy would magically provide an alternative. In the meantime we are bleeding depreciating dollars to import oil from abroad. Oil and gas are a finite resource. But we will be dependent on them for two decades , or more,until we can come up with serious alternatives. I fear the present crowd in Washington will fly the economy ,and all of us, into the ground.

Jun 19 02:39 PM

[January Thaw:]

The only hope we have in this country is that all these "dreamwork"
legislations will have to go through a review for "sanity"...I sure hope there's a little sanity out there to make sense of them because if there's not ... hold onto your hats everyone...this could be a very long trainride to no man's land. Neither side is making any sense. You have to understand a problem before you can fix it.

Jun 20 10:49 PM

[harammph:]

MMarrkk: Read the NYT Article. One Eye is better than NONE.. They put it In, write to them.

The Link is in an Article were MF called me a Terrorist, should be easy to find, use Braille.

Jun 21 02:47 AM

[one eye:]

Mmarrkk: I merely repeated what my One Eye saw. You however made some statements without any Back Up.

My "Clap Trap"?, Lets see you Contradict Every point made in the NYT Article whose Author posed similar questions regarding the Viability of Shale Gas.

Have someone read the Article to you.

My "Clap Trap"? How about Personal Abuse or don't you care?

Jun 21 02:06 PM