Competing interests add fire to fuel debate 

WASHINGTON – There’s a new power struggle on Capitol Hill, and this one isn’t between Republicans and Democrats.

Instead, it’s a battle among producers of all sorts of energy – from wind and solar to oil and gas – as they scramble to get a sliver of shrinking federal subsidies and make sure they benefit from policies that could drive up demand.

President Barack Obama kicked off the contest over scarce federal dollars earlier this year when he asked Congress to abolish tax incentives for oil, natural gas and coal to pay for investments in “clean energy” technologies.

Obama takes a similar direction in his proposal for a clean energy standard requiring the U.S. to generate 80 percent of its electricity from low- or zero-emission power sources by 2035.

In both cases, lawmakers will decide how much (if any) clean energy to mandate and define what counts as “clean.”

Their decisions will dictate what fuels prevail as new generation capacity is planned and brought online, said Kevin Book, an analyst with ClearView Energy Partners in Washington.

Lawmakers’ actions will determine whether the decisions are based purely on economics or instead come “from a stringent standard that picks winners,” Book said.

Part of the standard

Advocates of wind and solar power have been pushing to make sure that they are part of any standard.

And they want renewable requirements high enough that sun and wind energy aren’t pushed aside by allowing cleaner but non-renewable power sources – such as nuclear and natural gas – to qualify toward clean energy mandates.

Coal backers, meanwhile, want to make sure the mix includes still-developing technology they call “clean coal,” which can trap carbon dioxide and other greenhouse gas emitted during combustion of the plentiful fossil fuel.

And supporters of natural gas, which burns with about half the carbon dioxide emissions as coal, don’t want to be left out either.

If Congress writes it broadly enough, a clean energy standard could boost demand for natural gas. But industry leaders fear lawmakers will instead develop a narrow standard that undercuts natural gas’ growth as a generation fuel.

Electric utilities are switching from coal to natural gas already because of looming environmental regulations and because of its recent low price, said Martin Edwards, vice president for legislative affairs at the Interstate Natural Gas Association of America.

Fighting for recognition

But a clean energy standard could actually turn back some of that progress, Edwards said.

If power utilities are forced to rely on renewables to generate a share of their electricity, they may seek the cheapest, already available non-renewable source for the remaining percentage. Edwards said his organization’s analysis suggests that would be coal rather than gas.

“Obviously, a clean energy standard that ends up backing out natural gas before coal doesn’t make sense,” he said.

The natural gas industry is still fighting for recognition on Capitol Hill and struggling to shed its reputation as an unreliable source of energy prone to boom-or-bust cycles and volatile prices.

“A lot of policymakers base their assumptions on natural gas based on the way things looked 10 years ago,” Edwards said.

Coal backers already are trying to exploit natural gas’ vulnerabilities while fighting looming regulations on conventional air pollutants, coal ash and greenhouse gases.

In recent presentations for congressional aides, coal supporters have warned that natural gas prices will rise if regulators force retirement of coal-fired plants and encourage use of natural gas to generate electricity.

Other power sources are at odds, too. Oil refiners scored a victory against ethanol producers late last month, when the House adopted a proposal that blocks the Environmental Protection Agency from spending any federal funds on allowing a higher percentage of ethanol in transportation fuels.

Daniel J. Weiss, director of climate strategy at the left-leaning Center for American Progress Action Fund, called that measure a “gift-wrapped valentine present to Big Oil,” because ethanol and other advanced biofuels produced domestically compete with petroleum as components in motor fuel.

“That’s a preview of things to come,” Weiss predicted. “Big oil will be very aggressive in pushing oil alternatives out of the way and coal will be very aggressive in trying to maintain its market share by stopping EPA from issuing public health standards.”

Fossil fuels have a big edge over alternative energy producers when trying to influence lawmakers and regulators.

While oil and gas companies and trade groups spent $146.3 million on lobbying last year, the wind and solar industries recorded just $6.6 million in lobbying expenditures, according to the not-for-profit Center for Responsive Politics and disclosures filed with the Senate.

Wind and solar developers are pushing to renew expiring federal incentives that helped fuel new construction. These include a program that reimburses up to 30 percent of construction costs for renewable energy projects like wind farms and solar arrays, and a renewable energy production tax credit.

Tough sell on tax credits

Keeping these incentives could be a tough sell on Capitol Hill, where scores of lawmakers were elected on promises to cut federal spending.

Peter Kelley, vice president of public affairs for the American Wind Energy Association, argues that continuing the tax credit and reimbursements would ensure a “level playing field with the other forms of energy,” that have long benefited from tax incentives.

He said his association isn’t advocating removing those incentives, arguing instead that wind should be part of an “all-of-the-above” energy policy.