US congressional leaders forge energy bill

Nov 14, 2003 01:00 AM

Congressional leaders forged a national energy bill that contains tens of billions of dollars worth of tax breaks and subsidies to oil, gas, coal and nuclear industries while emphasizing production over conservation. A cornerstone of President Bush's energy policy -- the controversial drilling for oil in Arctic National Wildlife Refuge -- was eliminated because of a lack of support in the Senate. Also missing is the oil industry's desire to test for oil and natural gas along the Atlantic and Pacific coasts.
Details of the legislation remain under wraps to all but a handful of Republican lawmakers and their aides, who promised to make it public. Those who wrote the bill, however, acknowledge that the details may not look good.
"We know that as soon as you start reading the language, we're duck soup," said Senate Energy Committee Chairman Pete Domenici, R-N.M., one of the two major authors.

Congress has struggled for years to come up with a national energy bill. This one reflects Bush's general philosophy to boost domestic production, but the overall costs are substantially higher than what the administration sought.
Lobbyists say there are at least $ 20 bn in tax breaks for the oil, gas and coal industries in the new bill. The size of the tax breaks may be a problem because the Senate allowed for only $ 16 bn worth of energy tax cuts in its annual budget while President Bush wanted only $ 8 bn.

With subsidies, loan guarantees and direct spending, the total cost of the bill is well past $ 100 bn.
"It's an Iranian bazaar, not an energy bill. It's a leave-no-lobbyist-behind bill," Sen. John McCain, R-Ariz., told. He vowed to oppose the measure. Industry lobbyists and some Republicans worry Democrats will filibuster to stop the bill.
"The comprehensive energy plan may not be the sexiest or most tangible legislation we pass this year, but there are few other issues that are more critical to job creation, our security, and our quality of life," said House Majority Leader Tom DeLay,R-Texas.

Over the years there have been several energy problems, but it was the Northeast blackout in August that prompted legislators to rewrite decades-old laws governing electrical transmission, power company ownership, reliability standards and connection costs for new power plants.
House Energy Committee Chairman Billy Tauzin, R-La., said the new bill would have some kind of federal, but still voluntary, oversight for new reliability standards. While drilling for oil in the Arctic refuge is out, Congress would give the industry a loan guarantee, estimated at $ 18 bn, to build a natural gas pipeline from Alaska to Chicago, according to Domenici. Environmentalists also say the bill would increase drilling for oil and natural gas on public land in western states.

The energy bill won't mandate an increase in car gas mileage as environmentalists and many lawmakers wanted, Domenici said. But it will give the makers of a gas additive that taints water supplies protection from multimillion-dollar lawsuits, he said. Industry lobbyists said the bill adds $ 800 mm to clean up tainted water.
To encourage farm-state Democratic support, the energy deal would eventually nearly double the amount of ethanol used in gasoline to 5 bn gallons. There is also language allowing some smoggy areas, such as the Dallas-Fort Worth region, more time before they have to clean up their air, contrary to federal court orders that ban such extensions.

Environmentalists complain this provision undermines the Clean Air Act. Republicans say the bill would stimulate domestic energy production and create 1 mm jobs.
"This is, in essence, a jobs bill," Tauzin said. "This bill will begin the process of stopping the erosion of jobs in our economy." Democrats were sceptical about the number of jobs promised and the bill itself.
"This is a grab-bag of goodies for special interests at a time when we desperately need a comprehensive energy policy to deal with the very real energy problems our nation faces," said Sen. CharlesSchumer, D-N.Y.

The price tag for the tax breaks appeared to be shifting. The Senate Finance Committee said the tax deals were not complete despite what negotiators in the House of Representatives and Senate claimed.
Environmentalists accused the deal's authors of following Vice President Dick Cheney's lead in 2001 when he drafted national energy policy in secret with energy industry lobbyists and no input from consumer advocates and environmentalists.
"Domenici and Tauzin crafted this pro-polluter bill behind closed doors," said Karen Wayland, acting legislative director for the Natural Resources Defence Council.

Source: Knight Ridder Newspapers
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