• Senate Democrats Abandon Cap-and-Trade, Renewable Electricity Standard at This Time
  • August 4, 2010
  • Law Firm: Troutman Sanders LLP - Atlanta Office
  • On July 22, 2010, Senate Democrats held a caucus meeting  to discuss strategies for passing energy legislation in the Senate, after which they announced that they have temporarily abandoned plans to introduce a comprehensive bill before the August recess including either cap-and-trade of carbon emissions or a renewable electricity standard.  Senate Majority Leader Harry Reid (D-NV) spoke to the media after the caucus, announcing that Democrats will instead introduce a smaller energy bill headlined by BP oil-spill response legislation.

    Despite months of effort, Senate Democrats have been unable to unite in support of a cap-and-trade program or a renewable standard.  A renewable standard requiring utilities to provide 15 percent of their power from renewable sources by 2021 was a key provision in an “energy-only” bill the Senate Energy and Natural Resources Committee approved last year with support from both Democrats and Republicans.  Nonetheless, Senator Reid has decided that he lacks the requisite 60 votes to pass either this standard or a cap-and-trade program.

    In addition to the oil spill response provisions, the energy package that Senator Reid says he will push also includes provisions for the creation of clean-energy jobs through the “Home Star” energy efficiency retrofit program, tax incentives for manufacturing of vehicles that run on natural gas, and investments in the Land and Water Conservation Fund.  Reid suggested that many of the bill’s provisions may be based on language from previously-introduced bills; the oil spill response provision, for example, will likely rely heavily on bill S. 3305, sponsored by Senator Robert Menendez (D-NJ), which raises a company’s maximum oil spill liability amount from the $75 million cap set out in the Oil Pollution Act of 1990 to $10 billion.

    Most observers think that cap-and-trade and likely the renewable standard are now unlikely to move in this Congress.  Congress will only have a short session when it returns from the August recess before it adjourns for the elections.  Some have speculated that Congress might take up these issues in a lame duck session after the elections.