Drilling to dominate September

Environmental groups lobbied to sweeten the bitter pill of offshore drilling, automakers looked for a legislative vehicle that would carry billions in federal loans to help them retool, and K Street faced life without two well-paying clients: Fannie Mae and Freddie Mac.

Lawmakers returned to Washington this week after a month-long hiatus. The August recess can be and often is a sleepy time in Washington — but not this year. There is much to do in September and little time to do it, as lawmakers will be leaving again in three weeks to hit the campaign trail.

{mosads}Lobbyists expected much of the first week to be dedicated to drilling, as Democrats in the House and Senate continued to work Monday to find a compromise that would open up some new areas to oil and gas companies but also promote renewable energy development.

Acknowledging the tide on the offshore debate may have turned against them, environmental groups tried to make the best of a bad situation.

“If they are going to do something we don’t like, it should be weighted heavily with something we do like on clean energy and renewables,” said Athan Manuel, director of lands protection for the Sierra Club.

For the Sierra Club, that means inclusion of a renewable electricity standard that would require utilities to produce a certain amount of their power by using renewable energy sources.

The groups also hold out hope that a package of tax credits fueling a solar and wind industry boom will be extended beyond its expiration date later this year.

It’s a delicate balance, because environmental groups, even in their weakened position, still can call on dozens of lawmakers to reject legislation they think goes too far. Republicans and some conservative Democrats may balk if they think the drilling bill is pro-production in name only.

Michael Gravitz, oceans advocate for Environment America, said his group was also pushing for new standards for buildings that would cut the amount of energy they consume, and therefore the amount of greenhouse gases produced to cool buildings in the summer or warm them in the winter.

A long-shot hope was language that would effectively direct federal regulators to speed up the deadline for automakers to meet fuel efficiency standards.

“If you really want quicker energy savings, that has got to be part of it,” Gravitz said.

Environment America and the Sierra Club estimate that if the National Highway Traffic Safety Administration (NHTSA) moved the fuel standard deadline from 2020 to 2015, it would save 22 billion gallons of gasoline over five years. NHTSA is responsible for regulating the corporate average fuel efficiency standard.

Proposals like a renewable electricity standard or the repeal of tax credits oil and gas companies now get, another potential component of a Democratic-crafted energy package, could engender opposition from Republicans.

At press time, Democrats had not yet released their energy package. One Democratic energy lobbyist said leaders were discussing opening areas 100 miles off the coastlines of Virginia, North Carolina, South Carolina and Georgia, and in additional areas in the eastern Gulf of Mexico.

{mospagebreak}Oil and gas companies may have to pay more in royalties to access the new areas, but states would not likely share in those payments, which could lead some coastal representatives to oppose the plan.

Drilling is hardly the only subject on lawmakers’ minds, however. The ongoing troubles of the American auto industry are likely to be the subject of debate in the remaining weeks of the session as well.

Auto lobbyists and executives were lobbying for billions of dollars in federal loans to help them retrofit plants to manufacture fuel-efficient cars.

{mosads}The industry is pushing for a $3.75 billion appropriation in a second economic stimulus package, a continuing resolution, or anything else with a chance of reaching the president’s desk.

If Congress appropriates that amount, the Energy Department could issue $25 billon in federal loans to help automakers retool.

In a note to investors, Friedman, Billings, Ramsey analyst Kevin Book said that help for the auto industry is “much more likely” to be reached this session than a deal on new oil production.

“Congressional divisions have not healed since lawmakers departed for their August recess. Nor is an election any time for delicate balances between regional resource bases or economic growth and environmental stewardship,” the note states.

Lobbyists who have worked on behalf of Fannie Mae and Freddie Mac, meanwhile, measured the fallout of the government takeover.

The two mortgage giants have spent more than $170 million on lobbying in the past 10 years, according to the Center for Responsive Politics.

In-house lobbyists held a conference call with their outside consultants on Monday afternoon.

One participant said they weren’t sent packing, but most believed their contracts would soon be ending.

“I don’t think there are going to be any outside lobbyists,” the lobbyist said.

The takeover requires Fannie and Freddie to cease their lobbying operations, although it wasn’t clear what would happen with their current contracts with consultants, or whether the prohibition would be permanent.

Meredith McGehee, policy director at the Campaign Legal Center, said that once the mortgage giants become part of the federal government, it might be possible for them to carry their retained lobbyists over as consultants.

But she said it would be extremely difficult for that to happen given the immense scrutiny that will come with the bailout.

“I don’t know if the gravy train is over, but it’s running into a break in the tracks,” McGehee said.

Mike Soraghan contributed to this article.