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November 14, 2007

An Energy Bill in Farm Bill's Clothing?

If you have ever gone on a whale-watching trip, then you have an idea what it is like to try and follow the elusive politics of energy during this 110th Congress. If I may elaborate; every once in a while you can follow a whale as it swims along the surface just long enough to spout a burst of effluent and pose for a couple photos before it disappears into the darkness. But most of the time is spent waiting, not watching. Waiting and staring in the direction of where you last saw the whale, expecting it to resurface. The whale eventually resurfaces, but it is nowhere near where you were looking, perhaps even on the other side of the boat. You assume, correctly, that while underwater the whale must have been swimming. But it must have done so differently than you expected it to, for it to have ended up where and when it did. Before I beat this metaphor to death, let me just add that while it is hardly uncommon for deal-making and deliberating to occur behind closed doors, one can easily get caught off guard by only looking in one direction waiting for something to resurface.

Reports spinning in the blogosphere have indicated that renewable energy provisions are in danger of being removed from the energy bill by congressional leaders, who are willing to cede the bill’s better provisions in order to get it passed. All this is occurring while numerous energy issues have surfaced and are bubbling around the Senate Farm Bill.

This is where it gets a little tricky. Sen. Pete Domenici (R-NM) wants to migrate two of his favored energy provisions -- the ethanol mandate and $50 billion in nuclear power loan guarantees -- into the more viable farm bill. Big-Ag has been lobbying heavily in support of the restructuring, but opponents fear that transferring the ethanol mandate to the farm bill would weaken bipartisan support for the energy bill and doom it to failure.

But also buried away in the farm bill is the often overlooked small wind tax credit. This year, identical bills were introduced in the Senate by Salazar (D-CO) and Smith (R-OR) and in the House by Blumenauer (D-OR) and Cole (R-OK) that would provide an investment tax credit of $1,500 per ½ kilowatt of capacity for small wind systems. This incentive could make small-scale wind energy generation viable for many, but it would not create the same kind of explosive growth in large-scale wind installations that an RPS or feed-in tariff would.

Late Tuesday, Blog for Rural America reported that the Senate Ag. Committee had agreed upon a list of amendments, and that debate on the farm bill should proceed in the morning. The first thing to be debated in the morning will most likely be the hotly contested Dorgan-Grassley amendment that would close loopholes for corporate farmers and put a 'hard cap' on farm subsidies at $250,000. Roughly half of the suggested $1.15 billion savings would be spent on social programs like emergency food assistance and food stamp enhancements. The rest of the money would be invested in programs for beginning farmer development, rural microenterprise assistance, farmers markets, organic certification cost share, community food grants, grasslands reserve, and farmland protection.

Not willing to give up hope for a more robust renewable energy program, Congressman Mark Udall (D-CO) has said that he will meet with Speaker Pelosi on Wednesday to talk about the future of the wavering energy bill. Co-chair of the Renewable Energy and Energy Efficiency Caucus, Udall is also meeting with senators to share his experiences with Colorado's successful Renewable Electricity Standard. Udall is positioning himself to run for the senate seat being vacated by Republican Wayne Allard, so he will do whatever he can to keep renewable energy targets in the energy bill – he could certainly use a legislative victory to earn some political capital to spend in the upcoming campaign.

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