White House, Pelosi Sell Omnibus as a Climate Win, Despite Oil Concession

The White House and House Minor­ity Lead­er Nancy Pelosi are seek­ing to de­fuse charges that the year-end spend­ing agree­ment with Cap­it­ol Hill Re­pub­lic­ans is a raw deal for the plan­et.

The ef­fort ar­rives a day be­fore House and Sen­ate votes on the om­ni­bus pack­age, which in­cludes a ma­jor win for the oil in­dustry and Re­pub­lic­ans: re­mov­ing the 40-year-old ban on U.S. crude-oil ex­ports.

A num­ber of Demo­crats and en­vir­on­ment­al act­iv­ists are balk­ing at the pro­vi­sion.

Pelosi sup­ports the over­all bill, but told re­port­ers Thursday that the oil meas­ure is “prob­ably the biggest obstacle I have to over­come to sup­port what is be­fore us today and to­mor­row.”

Later in the day, with Fri­day’s vote draw­ing closer, she sent a let­ter to Demo­crat­ic law­makers mak­ing the case that green-en­ergy pro­vi­sions more than off­set the oil lan­guage that she de­tests.

“While lift­ing the oil ex­port ban re­mains at­ro­cious policy, the wind and sol­ar tax cred­its in the Om­ni­bus will elim­in­ate around ten times more car­bon pol­lu­tion than the ex­ports of oil will add,” Pelosi wrote.

The White House also says there’s a lot more good than bad on the cli­mate-change front, des­pite its op­pos­i­tion to pro­vi­sions that re­quire the ban to be lif­ted. Dan Utech, a seni­or cli­mate ad­viser to Pres­id­ent Obama, used the White House blog Thursday to make the case for the bill.

Utech wrote in a blog post that the five-year ex­ten­sions of tax in­cent­ives for wind and sol­ar-power pro­jects—the pro­duc­tion tax cred­it (PTC) and the in­vest­ment tax cred­it (ITC)—will help cut car­bon emis­sions far more than any po­ten­tial pol­lu­tion bump from open­ing the taps to crude ex­ports.

He called it one of the biggest in­vest­ments in re­new­able-en­ergy de­ploy­ment in the na­tion’s his­tory (and in­deed the Joint Com­mit­tee on Tax­a­tion tal­lies the wind pro­vi­sion’s cost at roughly $14.5 bil­lion over 10 years, and the sol­ar piece costs bil­lions of dol­lars too).

“In fact, pre­lim­in­ary [Na­tion­al Re­new­able En­ergy Labor­at­ory] ana­lys­is in­dic­ates that an ex­ten­sion of the PTC and ITC through 2020—a rough proxy for the bill in front of Con­gress—would help spur the con­struc­tion of enough wind and sol­ar to power 30 mil­lion homes in 2020,” he wrote. That would cut car­bon emis­sions by more than 200 mil­lion met­ric tons in 2020, Utech said.

Utech then cited ana­lys­is from the fed­er­al En­ergy In­form­a­tion Ad­min­is­tra­tion about the ef­fect on U.S. oil pro­duc­tion of lift­ing the ban to con­clude that, from a cli­mate stand­point, the ef­fect on emis­sions is likely to be “min­im­al.”

“EIA’s core case—the one con­sidered most likely—pro­jects that re­mov­ing the ban has no im­pact on pro­duc­tion or ex­ports and thus no im­pact on green­house gas emis­sions between now and 2025. So our ex­pert agency’s best es­tim­ates in­dic­ate the green­house gas im­pacts of re­mov­ing the crude oil ban is neg­li­gible,” he said.

Utech is not alone.

Mi­chael Levi, an ana­lyst with the Coun­cil on For­eign Re­la­tions, pos­ted an ana­lys­is this week con­clud­ing that any in­crease in emis­sions from lift­ing the ex­port ban is very small com­pared to the be­ne­fits of oth­er White House policies: a big in­crease in auto-mileage stand­ards and sweep­ing En­vir­on­ment­al Pro­tec­tion Agency rules to force cuts in power-plant emis­sions.

But claims of a largely be­nign cli­mate im­pact from lift­ing the ex­port ban are not go­ing un­chal­lenged.

The en­vir­on­ment­al group Oil Change In­ter­na­tion­al is vig­or­ously mak­ing the case that al­low­ing crude-oil ex­ports—which un­der some es­tim­ates could even­tu­ally boost U.S. pro­duc­tion by up to a half-mil­lion bar­rels daily—will en­able ma­jor car­bon emis­sions.

The group warns against dis­miss­ing the im­pact of policies that push more fossil-fuel sup­plies onto the mar­ket. More broadly, en­vir­on­ment­al­ists ar­gue that cli­mate policy must do more to choke off fossil-fuel ex­trac­tion (a com­mon ral­ly­ing cry is “keep it in the ground”) in ad­di­tion to meas­ures that cut de­mand and help burn fuel more cleanly.

“Pro­fes­sion­al scep­tics con­tin­ue to doubt the im­port­ance to cli­mate change of fossil fuel sup­ply. In real­ity, the cli­mate prob­lem is caused by the quant­ity of fossil fuels, which can be ad­dressed at either end of the sup­ply chain, as the same amount is con­sumed as is ex­trac­ted,” wrote Greg Mut­titt, a seni­or cam­paign ad­viser with Oil Change In­ter­na­tion­al, in an ana­lys­is this week.

Oil in­dustry lead­ers have been push­ing for re­mov­al of heavy ex­port re­stric­tions that were im­posed after the Ar­ab oil em­bargo in the 1970s.

They’re eager to even­tu­ally take ad­vant­age of high­er prices that have of­ten been avail­able on world mar­kets, al­though right now the dif­fer­ence is slight, and with crude prices low there may be little short-term ef­fect from end­ing the re­stric­tions.

In­dustry of­fi­cials ar­gue that lift­ing the ban would be an over­all boost for the U.S. eco­nomy and cre­ate large num­bers of jobs by stim­u­lat­ing more spend­ing on do­mest­ic pro­duc­tion pro­jects and re­lated in­dus­tries.

The tim­ing of the deal, just days after the Par­is cli­mate agree­ment was struck, rankles en­vir­on­ment­al­ists—and Pelosi, des­pite her sales pitch.

“The tim­ing of it is so in­cred­ible—that right when the rest of the world is say­ing, ‘We are go­ing to re­duce our de­pend­ence on fossil fuels, we are go­ing to re­duce emis­sions,’ we are tak­ing an ac­tion that is go­ing to in­crease emis­sions,” Pelosi said at her press con­fer­ence Thursday morn­ing.

(Image via Gencho Petkov / Shutterstock.com)