Energy and Climate Report provides current, thorough coverage of clean energy, efficiency, and climate change legislation, regulation, policy, legal developments, and trends in the U.S. and...
By Ari Natter
March 31 — Sen. Chuck Schumer (D-N.Y.), who is emerging as the likely successor to Sen. Harry Reid (D-Nev.) as leader of Senate Democrats, presents a mixed bag for the energy industry, analysts told Bloomberg BNA.
On the one hand, he opposes a mandate requiring billions of gallons of ethanol and other biofuels into the nation's fuel supply and supports hydraulic fracturing. On the other, he supports more stringent crude-by-rail requirements that could increase oil industry costs and has voted to put a price on carbon and repeal oil industry tax incentives.
Schumer, currently the Senate's No. 3 Democrat, was the author of an amendment to 2002 energy legislation that would have stricken the renewable fuel standard from the bill. The bill never became law, but it was a predecessor to the Energy Policy Act of 2005, which established the renewable fuel standard.
“This provision adds an astonishing new anticonsumer, anti-free market requirement that every refiner in the country, regardless of where they are located, regardless of whether the state mandates it or not, and of whether the state chooses a different path to get to clean air, must use an ever increasing volume of ethanol,” Schumer's office said in a 2006 statement. He added that the “expensive ethanol mandate will increase gas prices. It is nothing less than an ethanol gas tax levied on every driver.”
The requirement, which was expanded by the Energy Independence and Security Act of 2007 to require 36 billion gallons of biofuel in the motor supply by 2022, is opposed by refiners such as ExxonMobil Corp. and Chevron Corp., which are required to blend it into their product.
Lawmakers frustrated with the Environmental Protection Agency's ongoing delays in issuing the annual RFS requirements have vowed to alter the law in 2015, but analysts have mixed views about how successful those efforts will be.
In addition, Schumer in remarks made on MSNBC in 2014 said many other Democrats have supported fracking, which is used to develop unconventional sources of oil and gas, such as shale gas. The technique is opposed by environmentalists, but it has made the dramatic U.S. oil boom possible.
“Overall, the Democrats throughout the country have supported fracking. The President has, most of us have, and it's worked quite well. It has to be done carefully, and it has to be done right,” Schumer said, adding that he would support the use of fracking in New York “if it's done carefully.”
New York Gov. Andrew M. Cuomo (D), however, announced a ban on the practice in the state because of public health and environmental concerns in late 2014.
In addition, Schumer has been a proponent of energy efficiency, introducing legislation in 2009 that would have set up a national Energy Efficiency Resource Standard that would have required electric utilities and natural gas distributors to achieve savings of 15 percent and 10 percent, respectively, between the years 2012 and 2020. The bill was never enacted into law.
Other energy issues that Schumer has championed include more stringent federal requirements for trains shipping crude-by-rail, including mandating volatility standards that could increase costs for Bakken oil producers.
The Pipeline and Hazardous Materials Safety Administration's proposed rule on enhanced tank car standards for crude oil and other flammable liquids is expected to be finalized in May. The proposed version didn't address the volatility issue.
“I think he’s sees a grand bargain in working with all of the different sides and all of the different sources of energy,” said Israel “Izzy” Klein, a former policy adviser for Schumer. “He’s done hearings on energy efficiency, and he's done hearings on energy independence, and he's also been a tremendous supporter of renewables.”
Schumer has secured commitments of support from most of his caucus to replace Reid, who announced March 27 that he wouldn't seek reelection in 2016, according to Bloomberg News.
Reid, who has made promoting clean energy and fighting climate change one of his signature issues and has been key in making Nevada one of the leading states in the country for solar installations, won't easily be replaced, analysts noted.
“It would be hard to follow Mr. Reid's footsteps. They would be big shoes to fill,” Melinda Pierce, the Sierra Club's director of federal policy, said in an interview. “That is something Senator Reid was absolutely passionate about.”
Still, Schumer is considered one of the leading Democrats when it comes to the environment, Pierce said.
According to the League of Conservation Voters, which ranks lawmakers based on their energy and environmental legislative records, Schumer has a lifetime score of 91 percent because of votes for measures to extend clean energy tax credits and against the Keystone XL pipeline.
Still some environmentalists, such as RL Miller, who chairs the California Democratic Party’s environmental caucus and the co-founder of the super-PAC Climate Hawks Vote, are concerned that Schumer hasn't made climate change enough of a focus.
“Reid has been awesome,” Miller told Bloomberg BNA. “Nobody can fully replace somebody that good.”
A Schumer spokesman didn't return a request for comment.
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