From greenhouse gases to green agenda: 5 energy issues to watch

It’s been a dynamic past 12 months on the energy front. The massive Gulf oil spill dominated much of the news cycle. And while Democratic efforts to pass comprehensive climate change legislation in the Senate failed, the Obama administration is moving ahead with plans to use its existing powers to regulate greenhouse gas emissions.

With the end of the year drawing close — the 111th Congress is over and President Obama is in Hawaii with his family for the holidays — it seems only fitting to turn our attention to next year.

Without further ado, here are five things to watch out for in 2011:

Attempts to block the Environmental Protection Agency’s climate regulations:

On Thursday, just hours before most people in Washington left town for the holidays, the EPA made two major announcements in its efforts to reduce the country’s greenhouse gas emissions. The agency laid out a timetable for phasing in emissions standards for power plants and refineries, and announced it would issue greenhouse gas permits in Texas, where the governor had refused to align with federal rules. On top of that, beginning in January the EPA will, on a case-by-case basis, begin phasing in rules that require large new industrial plants and sites that perform major upgrades to curb emissions.

The move is certain to fuel the fire of opposition against the Obama EPA’s efforts. Republicans, emboldened by their majority in the House and swollen numbers in the Senate come next year, have promised to fight the EPA. While Sen. Jay Rockefeller’s (D-W.Va.) effort to delay the EPA’s authority to regulate greenhouse gas emissions by two years failed, he’s promised to try again next year. Other Republicans have promised to get in on the action.

All eyes are on the new Republican House and energy and enivornment committee chairmen: Rep. Fred Upton (Mich.) will chair the Energy and Commerce Committee, Rep. Doc Hastings (Wash.) will chair the Natural Resources Committee and Rep. Ralph Hall (Texas) will chair the Science and Technology Committee. All three lawmakers are planning to turn a critical eye toward the Obama administration’s climate change policies.

The continuing fallout from the Gulf oil spill:

For the many months that oil gushed into the Gulf of Mexico, the oil spill stayed on the front pages of the country’s newspapers and at the fore of lawmakers’ minds. But almost as soon as the well was capped, lawmakers’ priorities shifted, and talk of passing an oil spill response bill in the Senate died down.

However, the spill is still very much a part of daily life in the Gulf. Spill victims continue to work to receive adequate compensation for the losses they suffered. Next year, Kenneth Feinberg, the administrator of BP’s $20 billion oil spill compensation fund, will continue to determine how best to dole out money to victims.

At the same time, the Department of Justice will advance both its criminal and civil investigations into those companies responsible for the spill. DoJ announced earlier this month that it is suing BP and eight other companies involved in the spill. The department also reserved the right to expand the lawsuit and add new defendants. And DoJ’s criminal investigation continues apace.

On the congressional front, it’s likely that lawmakers will address a few oil-spill related issues. Chief among them is the question of how penalties imposed on the parties responsible for the spill — the defendants could face billions of dollars in fines — will be used. Under current law, the penalties go back to the federal government, but both Gulf state officials and President Obama have called for some of that money to go to restoration in the region. To that point, Sen. Mary Landrieu (D-La.) told The Hill recently that she wants 80 percent of the penalties to flow back to the Gulf.

Obama and Congress: Is compromise possible? And watch those prices

A big question heading into 2011 is whether this year’s death of cap-and-trade — a bitter defeat for environmentalists and Democrats — opens the door for deals on other energy bills. President Obama seems eager to find out. Obama said Dec. 22 that he wants to “immediately engage” with Republicans on an energy bill next year.

In recent months, both Obama and Senate Minority Leader Mitch McConnell (R-Ky.) have talked up the prospect of bipartisan deals on boosting nuclear power, electric vehicles and natural-gas development.

Lawmakers including Sens. Lindsey Graham (R-S.C.), Joe Lieberman (I-Conn.) and Mark Begich (D-Alaska) are eyeing negotiations next year. 
And don’t forget Sens. Jeff Bingaman (D-N.M.) and Lisa Murkowski (R-Alaska), who lead the Energy and Natural Resources Committee. Will they thread the needle again and move a big bill through the panel? That’s what they did in 2009, only to see it stall and never reach the floor.

In the House, meanwhile, ascendant Republicans want to block EPA climate rules and push the Obama administration to speed up offshore drilling permits, and have revived their call for an “all of the above” energy approach that includes fossil fuels, nuclear power and renewables.

Keep an eye on oil and gasoline prices. Oil touched a two-year high of $91.63 Thursday, while gasoline prices are averaging around $3 per gallon. Both are well below the records of 2008 that helped force congressional Democrats to abandon longstanding offshore drilling bans, but rising prices nonetheless could put energy higher on the political agenda.

Greens try to regroup

2010 was a disappointing year for environmental groups that poured resources into lobbying for climate legislation only to see it hit a brick wall in the Senate. Now, with emissions caps more vilified than ever on Capitol Hill, look for green groups to defend state and EPA climate programs.

The green movement is soul-searching after the blows it absorbed this year, which were especially tough in light of heightened expectations that accompanied Obama’s election.

Sierra Club Executive Director Michael Brune said earlier this year that clean energy advocates are getting their “asses kicked” inside the Beltway and called on environmental groups to rethink their strategies.

The Environmental Defense Fund, meanwhile, is pledging to adopt a more confrontational stance with industry groups after years of playing an inside game.

Conflict and collaboration with China

Look for new twists next year in the complicated relationship between China and the U.S. — the world’s top two greenhouse gas emitters — on green energy.

On one hand, the U.S. has expanded its collaboration with China on joint development of low-carbon technologies. But there are also simmering tensions over China’s green energy trade practices.

The Obama administration escalated the conflict Dec. 22 by announcing it will seek formal World Trade Organization talks with China over its wind industry subsidies, which U.S. officials believe have run afoul of WTO rules.

And the United States Trade Representative — with prodding from pro-labor Democrats on Capitol Hill — is continuing a wider probe of China’s green tech trade practices at the behest of the United Steelworkers.

The energy relationship will probably get some high-level White House attention soon. Chinese President Hu Jintao is scheduled to visit Jan. 19.