Though the Democrats in Congress have wrapped up their haggling over a new energy bill that would set 35 mph fuel economy standards by 2020, the deal may still be undone by the threat of a presidential veto. Yesterday, the chief economic adviser to the administration, Al Hubbard, issued a statement indicating that the compromise measure agreed upon in negotiations in the House did not meet the criteria articulated by the administration, and could be subject to veto if the bill is not changed.
In separate but related developments, it appears that the Democrats in the Senate may not have sufficient votes to pass the bill there, either.
The fight is largely over an renewable energy requirement imposed on electrical utilities. The bill requires them to use 15% renewable energy – such as windmills – by 2017. The measure is opposed by Senators from coal producing states and from the southeast, where the measure would substantially increase energy costs, apparently even more than the huge increase it would impose on utilities in other parts of the country. Though the Senate majority leader, Harry Reid, says he has the votes to pass the measure anyway, observers aren’t so sure. It takes 60 votes to end debate in the Senate, and Reid has been a largely ineffective majority leader, accomplishing virtually none of his announced agenda this year.
The administration, the meantime, apparently wants more alternative fuel use, despite the reality that all alternative fuels currently available are more costly than fuels currently in use. It also opposes any tax increase as part of the measure.
The administration also insists that the legislation must make it clear that the NHTSA, not the EPA, sets fuel mileage standards. The provision is considered important because regulation of C02 as an emission effectively controls fuel economy and the U.S. Supreme Court last year decided that C02 should be characterized as a pollutant (confirming, no doubt, lawyers as among the worst polluters, as C02 is generated by breathing and there are so many of them). This conflict was simply ducked by the compromise earlier reached between San Francisco Democrat Nancy Pelosi, the House leader, and Detroit Democrat John Dingell, the Energy Committee Chairman.