What are the risks and potential opportunities for energy and environment issues as Washington debates a way to avoid the fiscal cliff?
This so-called "fiscal cliff," which has become the most popular buzz phrase inside the Beltway, is a metaphor to describe a combination of automatic tax hikes and budget cuts--including the first round of sequester cuts Congress approved in 2011--that will go into effect in January unless lawmakers strike a deal on budget cuts. Several tax policies, including the Bush-era tax cuts and the payroll tax holiday will also expire at year's end unless Congress votes to extend some or all of the policies at stake.
Congress is focusing mostly on the big issues, like the Bush-era tax cuts. But energy and environment issues are also at stake. The production tax credit for wind energy is set to expire at year's end unless Congress votes to extend it. The mandatory, across-the-board sequestration cuts set to go into effect on Jan. 2 would affect all parts of the government, including the Environmental Protection Agency and the Energy and Interior departments. It's unclear exactly which projects would face the chopping block.
Congressional Democrats are pushing to eliminate oil and gas subsides as part of any compromise. Meanwhile, some fossil-fuel industry and business groups are making the case that increased oil and natural-gas drilling can help solve the country's fiscal crisis, too. Do either or both of these efforts have a chance at making it into any grand bargain?
What are the other factors that will influence how much energy and environment issues are affected by the fiscal cliff?
Will the wind-energy PTC be renewed if Congress strikes a broad deal on all tax extenders?
If Congress lets the country fall off the cliff, does that create doomsday scenarios for the energy industry and environmental protection? Or, are these issues not affected much at all by the broader fiscal-cliff debate?