OVERNIGHT ENERGY: High noon for ethanol


Tuesday’s Big Story: The Senate is slated to vote on Sen. Tom Coburn’s (R-Okla.) plan to eliminate a major ethanol industry tax break and the ethanol import tariff.

Ethanol backers are battling the amendment and seeking to pull support from Coburn.

Sens. John Thune (R-S.D.) and Amy Klobuchar (D-Minn.) are floating legislation that would phase out the credit while maintaining other incentives.

Their plan would end the 45-cent per gallon ethanol blender’s credit (which is slated to expire at year’s end), but maintain a smaller and “variable” blender’s credit for three years.

It would be triggered if the price of oil dips below $90 per barrel, starting at a few cents per gallon and increasing as oil prices decline further, according to a summary.

Klobuchar criticized Coburn’s plan on the Senate floor Monday. “To disrupt an industry like this with no notice is just the wrong way to go,” she said.

The Klobuchar-Thune bill – which is drawing support from ethanol industry trade groups – would steer $1 billion from reducing the credit toward deficit reduction and a total of $1.5 billion to the “variable” credit, extending credits for cellulosic ethanol production, small ethanol producers, and installing alternative fuel pumps.

Senate Democratic leaders are working against the Coburn amendment to economic development legislation, but claiming their opposition is rooted in procedure, not policy.

The White House, meanwhile, doesn’t like his plan either. “With respect to incentives, the Administration is open to new approaches that meet today’s challenges and save taxpayers money. We oppose a straight repeal of the Volumetric Ethanol Excise Tax Credit,” said White House spokesman Clark Stevens.

But Coburn’s plan has support from groups including the National Petrochemical and Refiners Association, which in a letter to senators Monday called the tax credit an “unnecessary subsidy,” especially given the national renewable fuels mandate.

Coburn raised the same point on the floor Monday. “We have a mandated level of ethanol that has to be produced and blended into gasoline,” he said, while noting his plan would save several billion dollars.

Livestock and grocery industry groups and some environmental groups also oppose ethanol subsidies.

The blender’s credit resulted in $5.4 billion in foregone federal revenue last year, according to the Government Accountability Office.

Groups including the conservative Club for Growth are also backing Coburn, who needs 60 supporters to advance his plan in Tuesday's procedural vote.

But the vote is nonetheless controversial in conservative circles. The Hill's Alexander Bolton will have much more on the tricky politics of the ethanol showdown in our Tuesday print edition.

NEWS BITES:

House GOP to slam Jaczko over IG report

House Republicans will shine a spotlight Tuesday on a scathing report released last week slamming Nuclear Regulatory Commission Chairman Gregory Jaczko over his efforts to abandon plans to store nuclear waste at Yucca Mountain.

The report, authored by NRC Inspector General Hubert Bell, accused Jaczko of withholding key information from his fellow regulators as he ordered staff to comply with the administration’s decision to shut down the project.

Bell will testify in front of a panel of the House Energy and Commerce Committee Tuesday. Jaczko will not appear at the hearing, but he will testify before the Senate Environmental and Public Works Committee Thursday on nuclear safety. 

Republicans have blasted the Obama administration for ditching long-time plans to house nuclear waste at the Yucca Mountain repository, arguing the decision was motivated by politics, not policy. Tuesday's hearing will provide House Republicans with more fodder in their ongoing effort to investigate the administration's decision.

While Bell's report stresses that Jaczko broke no laws, it says he “strategically” released partial information to NRC commissioners about his intentions.

More broadly, the report criticizes Jaczko’s leadership style, alleging that he “controls information” provided to the commissioners by designating issues as administrative matters, which he has control over, rather than policy matters.

EPA delays climate rule schedule

The Environmental Protection Agency will delay by two months the release of proposed climate regulations for power plants.

The agency said Monday it would propose the power plant climate standards on Sept. 30, 2011, rather than in July as the agency originally stated.

But EPA stressed that the schedule for issuing the final greenhouse gas emissions standards for power plants has not changed; that deadline is still May 26, 2012. The agency also noted that the timeline for climate standards for refineries has not changed.

“EPA has engaged in an extensive and open public process to gather the latest and best information prior to proposing carbon pollution standards for fossil fuel-fired power plants, one of the largest stationary sources of carbon pollution,” EPA said in a statement.

“Through this process – which included listening sessions with the business community, states and others - a wide range of stakeholders have presented the agency with important input which deserves to be fully considered as the Agency works to develop smart, cost-effective and protective standards.”

The agency began phasing in greenhouse gas permitting rules in January for large new and modified facilities.

Clean Air Watch President Frank O’Donnell said the delay is likely a result of EPA’s “heavy workload.”

But O’Donnell raised concerns about what he sees as “the latest in a pattern of delays as the EPA remains under intense political pressure from Republicans and some Democrats in Congress.”

“EPA has already delayed the important standards for ozone as well as for fine particle soot.  And it has put its industrial boiler standards on ice indefinitely,” O’Donnell said.

House panel to vote on pipeline bill Wednesday

The House Energy and Commerce Committee will vote on legislation Wednesday that would force President Obama to make a decision on a controversial pipeline project by Nov. 1.

The vote comes as the political battle over the pipeline is reaching a fever pitch in Washington.

Environmental and public lands groups are mounting a major opposition campaign to the project, known as Keystone XL. The groups cite recent leaks at an existing Keystone pipeline, which carries Canadian oil from Alberta to Oklahoma.

Keystone XL would extend the existing Keystone pipeline to refineries in Texas.

Meanwhile, the oil industry is pushing for the approval of the project, launching a new advertising campaign, arguing that the pipeline is necessary to help wean the country off of its dependence on Middle Eastern oil.

The State Department is currently conducting a multi-agency review of the project.

Obama nominates key EPA official

President Obama has nominated Kenneth Kopocis to head the Environmental Protection Agency's water office, the White House said Monday.

Kopocis, if confirmed by the Senate, would replace Peter Silva, who served as the top water quality official at the agency before resigning earlier this year.

Kopocis has served as senior counsel on the House Transportation and Infrastructure Committee since 2008. He held a number of other staff positions over the last 25 years on various congressional committees. 

ON TAP TUESDAY:

House panel delves into ‘critical materials’


A panel of the House Science Committee will be the latest to probe U.S. access to rare earth elements and other materials that are critical to a range of clean-energy technologies.

The hearing titled “The Federal Perspective on a National Critical Materials Strategy” will include testimony from David Sandalow, who is the Energy Department’s assistant secretary for policy and international affairs, and White House science adviser John Holdren.

House Republicans to unveil renewables plan

House Natural Resources Committee Chairman Doc Hastings (R-Wash.) and several committee colleagues will “unveil several pieces of legislation to expand renewable energy production on federal lands,” an advisory states.

IN CASE YOU MISSED IT…

Here’s a quick roundup of Monday’s E2 stories:

- Head of Energy Information Administration resigns

- Report: Looming EPA rules unlikely to hamper power reliability

- Obama touts energy-efficient light bulbs

- Interior beefs up offshore inspections with multi-person teams

- Upcoming ethanol vote splits Senate Republicans 

- Senate Dem leadership works against Coburn ethanol plan 

- Cantor: Tackle energy subsidies in tax reform plan, not debt talks

- Actor Mark Ruffalo releases video to raise awareness of 'fracking'

Please send tips and comments to Ben Geman, ben.geman@thehill.com, and Andrew Restuccia, arestuccia@thehill.com.

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