Tuesday, July 14, 2009

Natural Gas Behind the Others in Lobbying Congress

The battle over climate legislation will now pit the country's top power sources against each other.Saying they failed to protect their interests as a landmark bill came together and passed the House last month, natural gas executives are forming a strategy to influence rewrites in the Senate.

"There are a lot of people in the industry who are scrambling their forces right now," said Fred Julander, founder and chairman of the Rocky Mountain Natural Gas Strategy Conference, an annual event that drew 1,800 industry people to Denver last week. "Whether we can learn and get up to speed -- and it's a steep learning curve -- is the question."

Battles in the Senate over climate bill language will be intense, and natural gas lags behind its competitors in the race to sway lawmakers.

"Much of what is going on is an industry feeling left out of the party and hoping to get more goodies for itself in the Senate bill," Steven Hayward, fellow at the American Enterprise Institute, a conservative think tank, said of natural gas.

Coal lobbyists have been talking to senators and aides for months, with their contacts becoming more frequent since the House bill passed. Coal lobbyists want to slow down the pace of the House measure's plan to cap greenhouse gas emissions and make businesses buy allowances for those emissions.

Natural gas also will have to compete against the utility industry, which has been lobbying heavily on energy legislation. While they represent natural gas and coal, utilities have big reasons to favor coal.

Electric utilities used coal for 59 percent of their power generation in 2007, while natural gas was used 13 percent of the time, according to the Energy Information Administration. Coal has been less expensive, making it more profitable for utilities to use as a fuel source.

Lobbying by utility interests so far has dwarfed competitors. In the first quarter of this year, utilities spent $35.1 million on lobbying. The natural gas industry spent less than a tenth of that, $3.3 million. Of the top 10 industries with a stake in climate legislation, natural gas put the least money into lobbying in the first quarter, according to a recent E&E analysis.

"As a whole, we're not very sophisticated in terms of public relations, and we need to be," Julander said. "We need to grow up and get in this game. No one is going to give us anything, even though we're the best for the environment."

'Coal Preservation Act'

Coal and natural gas are the top fuels used to make electricity in the United States. Natural gas emits about half the carbon dioxide, the principal greenhouse gas, that coal does for the same amount of energy produced. Natural gas executives and others at the Denver conference argued that while the House-passed legislation strives to reduce carbon emissions, it insulates coal in a way that will hurt lower-emitting natural gas.

Analysts agree that the bill crafted by Reps. Henry Waxman (D-Calif.) and Ed Markey (D-Mass.) helps coal.

"Coal did very well in Waxman-Markey," said AEI's Hayward, who added that the legislation could be called the "Sleight-Of-Hand Coal Preservation Act."

"It is so well-established in so many industrial states, and replacing it with another source, even natural gas, would cause a serious increase in utility rates, which no politician wants their fingerprints on," said Hayward, who in general dislikes the bill.

A spokesman for a trade group representing coal interests said the bill is structured to lower carbon emissions while still protecting consumers from higher electricity costs.

"The reality is, natural gas is a higher-priced fuel. It's a less domestically available fuel," said Joe Lucas, spokesman for American Coalition for Clean Coal Electricity. Language in the bill helping utilities that use coal "is a way of reducing the consumer's end price."

In the early years of climate regulation that charges for carbon emissions, the government would give away 85 percent of the carbon emission allowances and auction the remaining 15 percent.


No comments: