4 energy and environment issues to watch during tonight’s Senate budget debate

Source: George Cahlink, E&E News reporter • Posted: Thursday, October 19, 2017

A fractured Senate will likely back a highly partisan budget late tonight that sets up fights over expanded domestic drilling, the future of renewable and other energy tax breaks, and spending for agencies like U.S. EPA.

The fiscal blueprint will pass after a lengthy series of votes on amendments — known as a vote-a-rama — that could preview those upcoming battles.

The spending document is nonbinding but will set a course for moving legislation that will have major impacts on the energy industry and environment.

Interest groups are watching closely. The League of Conservation Voters says it’s a “huge giveaway to oil and gas companies.”

Koch brothers-backed Americans for Prosperity favors it for spurring an overdue tax reform. Both groups say they will use the budget votes to help decide the candidates they will support next year.

Here are four reasons why the Senate’s fiscal 2018 budget has captured the attention of both the green and energy communities:

ANWR push

A battle is brewing as the GOP presses a decadeslong goal opening up a portion of the Arctic National Wildlife Reserve to oil and gas drilling.

The blueprint instructs the Senate Energy and Natural Resources Committee to write legislation allowing drilling in the preserve to generate $1 billion in new federal revenue. And under budget rules, the resulting bill could pass the Senate by a simple majority without the threat of a filibuster.

Chairwoman Lisa Murkowski (R-Alaska) said she is expecting Democrats to try to strip the ANWR provisions as well as other tax policy instructions in the bill.

“I’m certainly going to be fighting to make sure that the energy instructions remain intact. We asked for them. We think we have an opportunity to find a billion, and we’re looking forward to demonstrating that,” she added.

Sen. Ed Markey (D-Mass.), a member of the Senate Environment and Public Works Committee, said he expects Democrats will have a “monumental debate” over ANWR.

Sen. Maria Cantwell (D-Wash.), the Energy and Natural Resources Committee ranking member, filed an amendment last evening that would kill the ANWR instructions.

But Democrats may also opt to hold off on a floor vote until the ANWR bill emerges from committee. Some believe they might have a better chance at attracting GOP moderates to defeat it as a stand-alone measure rather than as part of a plan with a host of other GOP priorities.

With Republicans controlling Capitol Hill and the White House, backers of expanded exploration have their best chance since 2005 of tapping ANWR.

Twelve years ago, the late Alaska Sen. Ted Stevens (R) fell four voters shy of attaching an ANWR provision to a defense spending bill. Stevens famously wore an Incredible Hulk tie to signal his strength and resolve for opening up ANWR.

Murkowski, a protégé of Stevens who has a closet full of Hulk memorabilia, including earrings and a scarf, isn’t planning to break out the superhero garb for the initial budget debate.

“You need to hold these in reserve for those critical moments,” she joked.

Will climate come up?

The two most recent Senate budget vote-a-ramas have featured partisan environmental amendments aimed at forcing senators to go on the record as supporting action on climate change and backing a carbon tax.

But if Senate Minority Leader Chuck Schumer (D-N.Y.) has his way, those kind of amendments — which often become fodder for campaign ads by painting lawmakers as taking extreme views — might be held back.

Instead, Schumer wants his party to focus on derailing the tax plan and raising concerns about possible Medicare and Medicaid cuts.

“Because we want sunlight. The more people see of this tax bill, the less they will like it,” Schumer told reporters yesterday when asked why amendments might be limited.

Left unsaid is that Democrats will have 25 senators up for re-election next year, while Republicans only are defending eight seats.

Several of those are red-state Democrats, including Sen. Claire McCaskill (D-Mo.), Heidi Heitkamp (D-N.D.) and Joe Donnelly (D-Ind.), who might not be eager to cast votes on partisan environmental issues.

GOP senators, meanwhile, have filed a handful of amendments that reflect ongoing current debate in the energy and environment world.

Sen. John McCain (R-Ariz.) has proposals aimed at fighting wildfires and better budgeting for the natural disasters. He also filed a provision addressing the multibillion-dollar maintenance backlog in the National Park System.

EPA spending

The Senate budget plan may ultimately help EPA avoid severe budget cuts sought by the Trump White House.

It would propose spending $516 billion for non-defense programs in fiscal 2018, which is $5 billion more than called for in the House-backed budget.

The Senate plan would also cap defense spending at $549 billion, far below the $619 billion sought by the House for Pentagon accounts.

The Senate’s call for more domestic dollars and less for defense is seen as an opening bid in what are expected to be intense negotiations in the coming weeks over a final fiscal 2018 spending package due in December.

It signals there’s a modest appetite in at least one chamber of Congress for increasing domestic dollars. And EPA, which the White House wants to cut by 31 percent in fiscal 2018, may benefit from any Senate push for more spending on domestic agencies. Senators from both parties have already suggested proposed EPA cuts go too far and won’t stand.

A looming renewable, energy tax fight

If Republicans are successful in adopting their budget, it jump-starts the first major tax code overhaul in more than 30 years and will set off frenzied lobbying by energy advocates to preserve favorable breaks.

Like ANWR, the GOP is moving the broad outlines of the tax proposal as part of the budget to avoid a filibuster, knowing there is solid Democratic opposition to plans for $1.5 trillion in breaks over the next decade.

The Ways and Means Committee is expected to fill in the details with legislation later this fall that will seek steep cuts in corporate rates that could come at the expense of ending renewable credits and other breaks.

GOP leaders and the White House have said they want the tax bill signed into law by year’s end.

Many Republicans would prefer to do away with renewable tax breaks, which are unpopular with their allies in the fossil fuel industry.

But less clear is whether they will go after allowances like the intangible drilling cost deduction, which significant portions of the energy lobby are eager to retain.

One Republican, Sen. John Hoeven of North Dakota, is looking to use the budget to preserve a favored tax break. He’s filed an amendment that would allow for the extension of the refined coal tax credit, with a tweak to allow nonprofit electricity generators to monetize the incentive.

Reporters Geof Koss and Kellie Lunney contributed.