Update on Green House Gas Legislation
Submitted by James Smith, Beirne, Maynard & Parsons, L.L.P. (Houston)
The recent passage of a GHG bill by the U.S. House of Representatives shows the challenges that GHG presents, and indicates that a GHG bill from the Senate is still far from certain. A Senate failure would not necessarily prevent GHG regulation; rather such a failure may mean a sweeping program adopted by EPA under current legal authority.
The statements about the desire for bipartisanship notwithstanding, the House bill received virtually no Republican support. Indeed, several Democrats voted against it, mostly from coal producing or consuming states who want to weaken the provisions, but a few who stated it did not go far enough toward reducing GHG.
The bill also divided some well known environmental groups. For example, Greenpeace and Friends of the Earth actively opposed the bill, with the apparent goal of having the EPA develop the GHG program. Other environmental groups actively supported the House bill, and at least one indicated it would not endorse any congress member voting against it, to the dismay of those environmental groups trying to get the GHG program thrown to EPA.
Ongoing consideration of the bill in the Senate will consider many ramifications of the House bill, including its trade provisions. According to an analysis by Congressional Quarterly, the measure permits the president, beginning in 2020, to impose tariffs on products imported from countries that do not limit greenhouse gas emissions. President Obama has expressed concern about the tariff provision, but such a provision may be needed to get the support of key senators from states that are large coal users, as officials from these states have often been more receptive to trade restrictions based on alleged environmental deficiencies in other countries. Attempts to curtail greenhouse gas emissions may result in a curtailment in international trade.
Senate passage of anything close to the House bill will be very difficult. The rules of the U.S. Senate require 60 votes in order to pass any significant legislation. Several coal state Democrats have expressed concern that coal will be a huge loser in any GHG initiative, and are actively trying to protect their home industries. Industry observers may take this lack of unity as a good sign, that perhaps any GHG initiative will be less extreme because of these coal state Democrats, and other moderate Democrats, on the GHG issue. Such an outcome is certainly possible. However, derailing a congressional GHG initiative may simply play into the hands of the most extreme environmental groups, who hope that the legislative approach will fail, and thus allow EPA to develop the GHG program. The U. S. Supreme Court in Massachusetts has already ruled that EPA has such authority under existing law. Derailing a congressional GHG initiative may have massive, negative unintended consequences for those opposed to what the Obama administration will likely propose.
To view an updated version of Mr. Smith’s comprehensive piece on this subject, click here.
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