REGULATORY: Government Relations: Washington Notes by Thomas J. Spulak and Allison F. Kassir

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Is There a Carbon Tax in the Future?

Hidden beneath the various discussions about environmental regulations is a nascent effort by some conservatives simultaneously to promote tax reform and environmental stewardship through a tax on carbon emissions. Recently the conservative American Enterprise Institute held a forum in which conservative economists (and some Democrats) promoted the need to enact a carbon tax. Such a tax would curb greenhouse gas emissions and at the same time reduce income tax rates by applying the proceeds of the tax to the Treasury. Recall that a carbon tax was dismissed out of hand during the congressional consideration of “cap and trade” legislation several years ago. While many believed that a carbon tax was a more straight forward way of dealing with greenhouse gas reduction than cap and trade, there was virtual unanimity that any form of a new tax was dead on arrival. Nevertheless, a carbon tax to these conservatives no longer seems so impossible.

Senator Ron Wyden and Congressman Edward Markey Continue to Promote a “Time Out” on Natural Gas Exports

Notwithstanding the fact that there is a growing global demand for natural gas, two highly respected energy wonks in the House and Senate continue to press for a moratorium on the export of natural gas.

As the U.S. inventory of natural gas expands due in large part to the discovery of new shale gas formations, natural gas prices have sunk from $15 per million BTU in 2005 to around $3 per million BTU today. Not surprisingly, natural gas producers are seeking ways to increase their profits. One way to do that is to meet increasing global demand where prices can exceed four times the current U.S. price. Senator Ron Wyden (D-OR) and Congressman Ed Markey (D-MA) claim that they are not against exports in general, but believe that there needs to be a “pause” at this time to consider the impact. Among other issues, they are concerned that exports will drive up domestic prices and will curtail America’s ability to become energy independent. The Obama Administration has not taken a formal position in opposition to natural gas exports, but is likely to do little to alter the status quo in the next few months pending the election.

“No More Solyndras” Bill Under Consideration

Spurred on by a 17-month investigation of now defunct solar manufacturer Solyndra, Congressman Cliff Sterns (R-FL) and others on the House Energy and Commerce Committee are considering legislation that would drastically restrict the Department of Energy’s loan guarantee programs. The legislation would set a cut-off date on applications for new loans, increase reporting requirements for existing loans and prohibit loan subordination. Like most bills under consideration in Congress today, this bill has little chance of being enacted into law. It does, however, provide Republicans an opportunity to remind the American public during the election season about the $535 Million loss to the U.S. Treasury as a result of the Solyndra bankruptcy.


  Thomas J. Spulak
  Washington, D.C.
  +1 202 661 7948
  tspulak@kslaw.com

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      Allison F. Kassir
  Washington, D.C.
  +1 202 626 5600
  akassir@kslaw.com

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