Streetsblog Capitol Hill

In a seven-hour markup session today, the House Natural Resources Committee approved three bills that would expand oil and natural gas exploration in Alaska and the outer continental shelf, all without bipartisan support.

Expanded drilling is expected to be one of the new revenue sources in the House transportation bill, which will be marked up by the Transportation and Infrastructure committee tomorrow morning. But there was something missing from all three drilling bills which took a few observers by surprise, including Taxpayers For Common Sense:

[A]ll three bills curiously lack what would seem to be a critical element: a requirement that the collected royalties be used for infrastructure. The bills are completely silent on the issue. … [I]t is entirely possible, if not likely, that [the House transportation bill] will tie all three together and mandate how the funds are used.

Democrats also introduced amendments that would tighten Buy America requirements, allow states to opt out of offshore drilling agreements by popular referendum, and complete more rigorous studies on the environmental impacts of certain projects. None were agreed to.

President Obama has proposed a plan to pay for the American Jobs Act, the $447 billion bill to create 1.9 million jobs, including $50 billion for infrastructure. His “pay-for” plan includes limitations on itemized deductions for the wealthy and the elimination of some tax loopholes for oil and gas companies.

Republicans have a different idea, though: oil drilling. Several GOP representatives have introduced bills to expand fossil fuel extraction and use the proceeds to fund transportation infrastructure.

Somehow, whatever the problem is in Washington, Democrats want to solve it by raising taxes on the wealthy, and Republicans want to solve it with oil drilling.

When it comes to funding a quick jolt to the economy, it’s pretty clear that oil drilling won’t really cut it. “Any royalties from any new energy development wouldn’t start flowing to the Treasury for years,” said Erich Zimmermann of Taxpayers for Common Sense. “Essentially this would be like spending money now to be paid for with revenues that may or may not be realized at some future time. Sounds like a recipe for a doubling down on our current deficit mess.”

Some speculate that a GOP oil drilling plan would explain the recent news that House transportation leader John Mica, with permission from his party’s leadership, is looking to raise transportation funding levels by an extra $15 billion a year in his proposed six-year reauthorization bill. After all, they’ve said that raising the gas tax is off the table.

A plan to pay for transportation and infrastructure through oil drilling would erode the entire basis of the transportation funding system, which historically rests with the Highway Trust Fund, paid for with fuel taxes and a smattering of other fees on driving and vehicles. In fact, Congress requires that at least 90 percent of what the Highway Trust Fund spends must be generated from taxes “related to the purposes for which such outlays are or will be made.”

“Generating additional revenues from an increase in energy production, therefore, would likely violate this requirement and at the very least result in an override of the Budget Act,” Zimmermann said, “but would also call into some question the importance of the ‘user pays’ principle itself as it relates to paying for the transportation system.”

Whether or not Mica is planning on paying for his transportation bill with oil drilling is a matter of speculation at this point. But several other Republicans have already introduced bills to that effect.

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House Republicans are calling for offshore oil drilling as an answer to foreign oil dependency and high gas prices — and they’re not the only ones. President Obama recently announced his intention to cut oil imports by one-third by 2025, partly by increasing domestic production was the answer to the country’s energy woes. In his speech announcing the plan, Obama barely mentioned transit and land use, even though more and more evidence points to these as real solutions for high gas prices.

The Natural Resources Defense Council has provided this neat graphic illustrating how demand side solutions — like better land use planning, transit access and more fuel efficient vehicles — match up against the tired “drill, baby, drill” mentality that has made the country so fossil-fuel dependent in the first place. The graphic is based on an NRDC analysis examining how much fuel could be saved using a variety of smart conservation policies, given the limits of our existing technology. Then the group compared the savings with the best available information about the country’s remaining domestic oil resources.

The result is a stark demonstration of the inadequacy of oil drilling as a solution. The analysis indicates that the United States could cut oil imports by 44 percent by focusing on clean energy technologies — about eight times what could be produced by domestic drilling. Previous studies have documented that better transit and community planning alone could reduce vehicle miles traveled in the country by 20 percent.

The implications for political leaders should be clear, says Luke Tonachel, writing for NRDC’s Switchboard blog. Unfortunately, the budget proposal introduced by House Budget Committee Chairman Paul Ryan last week only affirms the oil subsidies and transit cuts that have led to our current predicament.

“As our analysis demonstrates, we have the know-how to break our oil addiction and meet the President’s goal of reducing oil imports by one-third,” he said. “The real question is whether we have the political will.”

Where we live has an enormous impact on energy use, according to new research commissioned by the EPA. The report, “Location Efficiency and Housing Type — Boiling It Down to BTUs” finds that Americans use far less energy if they live in an apartment building in a transit-oriented neighborhood than if they live in a detached suburban house, even if that house has green building features and sports fuel-efficient cars in the driveway.

When it comes to this report, a picture’s worth a thousand words. As the graph above shows, the biggest energy efficiency gains come from living in transit-oriented neighborhoods.

A household living in a single family detached house located in a typical sprawl development uses an average of 240 million BTU (British Thermal Units, a unit of energy output) of energy a year, while the same household would only use 147 million BTU if the exact same house were located in a compact neighborhood. Make that single family house an apartment and energy use is down to 93 million BTU.

“While energy efficiency measures in homes and vehicles can make a notable improvement in consumption, the impact is considerably less dramatic than the gains possible offered by housing type and location efficiency,” the authors write. The ideal solution, of course, is to combine smart growth with green technology.

The report serves as a high-level rebuke to those who dismiss the importance of smart growth for curbing energy use, a point of view that was reinforced by a recent report from the Pew Center on Global Climate Change. While putting a stop to the country’s many sprawl-inducing policies may not be easy, the EPA’s numbers show it’s necessary.

Editor's note: Congressman Earl Blumenauer (D-OR) sent us this commentary on the the BP oil spill, climate change and the need for transportation reform.

Last week, President Obama delivered his first speech from the Oval Office on the single greatest challenge our nation faces: how we supply and consume energy.

The searing images we’re seeing from the Gulf Coast -- of the families who lost loved ones, of people out of work and of oil-coated birds and dolphins -- are daily reminders of what’s at stake when we drill, baby, drill.

The truth is that we are drilling 150 miles offshore and one mile below the earth’s surface because we have run out of accessible oil. Most shocking is how small a difference this oil makes to our energy needs. The 35-60,000 barrels spewing daily from the Gulf floor would be enough to power our nation’s cars for just four minutes.

Whether from the Gulf of Mexico or Persian Gulf, we cannot meet our nation’s energy needs by drilling. We are at a precipice, and I stand firmly with President Obama when it comes to Congress passing legislation that arms the nation with clean energy.

But frankly, we need to do more on these issues, especially by addressing transportation and how we build in our communities.

The transportation sector accounts for almost three-quarters of U.S. oil consumption and one-third of our carbon emissions. If we really want to break our dependence on oil and improve our global competitiveness, we must focus on the way people commute and move goods.

Being truly aggressive about where and how we build can save even more money and energy -- with the potential to cut carbon pollution 12-16 percent by 2030 and save more than a million barrels of oil a day.

This is not the first thing that comes to mind for most people, but to ensure our energy security, we need a comprehensive approach. I hope this becomes part of the future message and, more importantly, a key focus of Congressional action.

The nation's transportation planning process fails to account for more than $200 billion per year in "hidden health costs" imposed by traffic and air pollution, according to a new report from the American Public Health Association (APHA) that maps the nexus between infrastructure and health care.

The APHA's report (available for download here) echoes many of the policy recommendations issued by the Centers for Disease Control last month: stronger incentives to expand bicycle and pedestrian networks, as well as more frequent measurement of the health impacts of new transport projects.

But the APHA, a trade association representing public health workers, went further than the government by adding up the estimated costs imposed by the absence of any mandatory evaluation of the health consequences of transportation decisions.

Citing U.S. DOT and American Automobile Association studies, respectively, the APHA pegged the annual price of congested roads at between $50 billion and $80 billion, with the health toll of traffic crashes -- including the treatment of fatalities, the resulting court costs, and lost wages -- reaching $180 billion per year.

The majority of those bills are paid indirectly by the transportation system users they affect, not factored in advance into local planning, as the APHA writes:

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The transit industry's leading D.C. lobbying outlet today joined the umbrella group for state DOTs and two major construction groups to protest the Senate climate bill's failure to set aside all of the revenue from its proposed new fuel fees for infrastructure projects -- specifically, to the cash-strapped highway trust fund that is generally split, 80-20, between roads and transit.

American Public Transportation Association (APTA) chief William Millar told reporters that while the local transit agencies he represents are "very supportive of legislation to address climate change and energy issues," the Senate bill's diversion of all but about $6 billion of its fuel revenues for purposes unrelated to transportation is a matter of serious concern.

"This is one of those cases where we really can't even talk about the merits of any portion of the bill because the fundamental position is flawed," Millar said.

Referring to the legislation's promise of funding for the clean transport and land-use grants known as "CLEAN TEA" and TIGER, he added, "Many of those are very good ideas … but you can't make those ideas work if there's no significant funding to make them work, and this bill would aggravate the funding situation for public transit."

John Horsley, executive director of the American Association of State Highway and Transportation Officials (AASHTO), was more direct in outlining where state DOTs want to see the Senate climate bill's fuel revenues directed. "Channel[ing] every dollar through the highway trust fund," he said, would help the industry break through a congressional stalemate and win passage of a new six-year federal transport bill.

Stephen Sandherr, CEO of the Associated General Contractors, and Pete Ruane, president of the American Road and Transportation Builders Association, echoed Horsley's interpretation of the new fuel fees in the climate bill -- which are imposed on oil companies and refiners but are likely to be passed along through higher gas prices -- as a de facto "user fee" on drivers.

The climate proposal, Ruane said, does "nothing more than finance a lot of goals, which are enviable in part, on the backs of transportation users."

It remains to be seen whether the transportation industry's combative stance against the partial diversion of the bill's transportation revenue, billed as a "call for a rewrite" of the climate legislation, will help force senators into restructuring the measure. Ruane said he "like[s] the odds" facing the four groups.

But a spokesman for Sen. John Kerry (D-MA) said that APTA, AASHTO, and 25 other industry groups mis-estimated the amount of revenue set aside for transportation in a letter outlining their concerns that was sent today to Kerry and his chief climate bill co-sponsor, Sen. Joseph Lieberman (I-CT).

“Let’s get the facts straight," Kerry spokesman Whitney Smith said via email. "This bill invests more than $6 billion annually in transportation infrastructure, which is more than any other comprehensive energy and climate bill and more than twice what's claimed in this letter. In effect, the letter advocates a policy that would accelerate emissions from the transportation sector and increase our dependence on foreign oil. That's not good for anyone, especially consumers."

One congressional source was befuddled by APTA's move to "bit[e] the hand that feeds them" by criticizing a climate bill that stands to give broad, lasting benefits to rail and bus systems.

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While transport reform advocates hailed last week's long-awaited Senate climate bill for directing an estimated $6 billion-plus towards local land use planning and green infrastructure, state DOTs and construction interests criticized the legislation -- suggesting that the measure's sponsors could face stiff resistance from the transportation industry's mainstream despite making concessions to win over all sides.

The central complaint raised by mainstream transport players boils down to, as American Association of State Highway and Transportation Officials (AASHTO) executive director John Horsley put it in a statement, the Senate bill's "preemption" of user-fee revenue that historically has gone into the nation's dwindling highway trust fund.

"Congress can ill-afford to consider any legislation that" siphons off money from the trust fund, which has required more than $30 billion in replenishment from the general Treasury over the past 18 months, Horsley said.

Stephen Sandherr, chief of the Associated General Contractors -- a backer of the Senate effort to bar the Environmental Protection Agency (EPA) from regulating greenhouse gas emissions in the absence of congressional action -- echoed that sentiment in his own statement on the upper-chamber climate proposal.

"[B]y taking funds raised through the proposal’s new transportation fees and committing all but a small percentage to unrelated spending, the legislation leaves our aging and inefficient roads, airways and transit systems vastly underfunded," Sandherr said.

But does the Senate climate bill impose a user fee on transportation fuel consumers? The text of the measure specifically requires "each refined [fuel] product provider" to purchase emissions permits from the EPA on a quarterly basis at a fixed price, with no permit trading allowed. Horsley's depiction of those charges as a "user fee" relies on the considerable likelihood that oil companies and refiners would pass on the cost of those emissions permits to consumers in the form of higher gas prices.

In the meantime, how much of the revenue raised by the bill's new fuel permits would infrastructure receive?

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Transportation would receive more than $6 billion of the revenue generated by selling carbon emissions permits to fuel providers under a new Senate climate bill introduced today by Sens. John Kerry (D-MA) and Joseph Lieberman (I-CT).

That money for infrastructure would be divided into three equal parts, according to the legislation. One-third would go into the nation's cash-strapped highway trust fund – with a mandate to set aside the funding for projects that decrease greenhouse gas emissions – while another third would go towards competitive federal grants in the style of the stimulus law's Transportation Investments Generating Economic Recovery (TIGER) program. 

A final third would go towards local land-use planning, as envisioned in the so-called “CLEAN TEA” bill championed by Sen. Tom Carper (D-DE).

“We want to make this the Senate where we finish the job and cast the decisive vote for the future,” Kerry told reporters at a packed Capitol Hill press conference where veterans' groups and industry representatives lent their support to the legislation.

The climate bill also takes a step towards requiring a set of national transport objectives – a longtime goal of reform groups – by giving the U.S. DOT and Environmental Protection Agency one year to propose “national transportation-related greenhouse gas emissions goals” as well as unified strategies for states and metro areas to measure their compliance with those goals.

State and local transportation planners would then have two more years to draft plans for emissions reduction, using a variety of strategies named in the bill, including transit-oriented development, high-speed rail, zoning changes, and promotion of biking and walking. Any areas that do not propose plans for reducing transport emissions would be declared ineligible for the proposed “CLEAN TEA” grants.

The bill states that emissions allowances set aside for the highway trust fund “shall be used to promote the safety, effectiveness, and efficiency of transportation,” specifying that the money should be used in accordance with the principles of the “CLEAN TEA” package. But the legislation did not specify how such a firewall surrounding highway trust fund money would be enforced within the U.S. DOT.

Nonetheless, transportation reformers hailed the bill as a step forward. Read more...

Sens. John Kerry (D-MA) and Joseph Lieberman (I-CT) are set to roll out their long-awaited, somewhat delayed climate change bill tomorrow without onetime co-sponsor Lindsey Graham (R-SC).

The legislation no longer includes its originally conceived "linked fee" on motor fuels -- which was quickly branded as a gas tax increase, alarming Graham and the White House while catching many members of the transport industry off-guard. But how does the Senate climate bill address the 30 percent of U.S. greenhouse gas emissions that come from transportation?

The Washington Post's Juliet Eilperin has an early look, reporting that the transportation section makes room for a "cap" on emissions but eliminates the "trade" aspect of the House-passed climate bill:

The transportation sector will not have any allowance trading, sources said. Instead, companies will have to buy quarterly carbon allowances that would be based on the average price in the previous quarter; the fee would be tacked on at a stage known in the industry as "the rack," which is after the fuel has left the refinery but before it reaches gas stations.

The bill would put electric utilities first in line for a sector-specific emissions cap, with other fossil fuel-using industries to follow, according to a report in National Journal that also includes a link to a leaked four-page summary of the measure. That summary suggests that the transportation industry may be pleased with the measure, referencing annual funding of "over $7 billion" for infrastructure.

For more details on how the legislation would affect U.S. infrastructure, check this space tomorrow ...

(ed. note. This post was updated to add a link to the bill summary.)