November 2003

$31 Billion National Energy Bill Dead For This Year

(November 25)  The Bush administration and U.S. Republican leaders have failed to reach an agreement on a stalled $31 billion energy bill, leaving the measure dead until at least next year, a Republican aide said.

Loaded with incentives for oil, natural gas, coal, electricity and nuclear power, the 1,200-page measure was a top priority for the White House, which has close ties to the oil industry.

It was swiftly approved last week by the House of Representatives, but collapsed despite a last-minute lobbying push by the Bush administration to resolve a fight over whether oil companies that make the gasoline additive MTBE should be protected from water contamination lawsuits.

A group of Midwestern and Northeastern lawmakers complained in the Senate on Friday that it would shield oil companies from lawsuits for contaminating water with MTBE. Some 1,500 cities say they face costly clean-ups if they cannot sue.

Republicans tried over the weekend to win the two votes needed to end the Senate filibuster, or procedural hurdle.

When that failed, the Bush administration pressed both House and Senate Republican leaders to drop the MTBE lawsuit protection from the energy bill. House Republicans balked at the idea, legislative sources said.

"We are done for the year," said Amy Call, a spokeswoman for Senate Republican Leader Bill Frist. Asked if the bill was dead for 2003, Call said, "Yes."

Congress is set to wrap up most of its remaining business for 2003 on November 25. And when it returns in January, the 2004 presidential and congressional races will be heating up, further complicating bids for find bipartisan common ground.

Lobbyists and other legislative aides expressed doubt that a similar version of the bill could muster support in 2004 for passage. The looming presidential election and both parties' maneuvering for advantage in Congress "is a recipe for gridlock," said one energy industry lobbyist.

Source: Reuters

Opponents Block Energy Bill in Senate

(November 21)  Opponents of a massive energy bill on Friday blocked the Senate from taking a final vote and sending the measure to President Bush

On a 57-40 vote, supporters failed by three votes to cut off debate on the legislation, which they said would increase and diversify energy production and provide farmers an economic boost by expanding use ofcorn-based ethanol. They needed 60 votes under the Senate's rules to close debate on the bill and move on to a final vote. The House passed the legislation earlier this week.

"This will not be the last vote on this bill," said Majority Leader Bill Frist, R-Tenn. "We're going to keep voting until we pass it and get it to the president."

Opponents of the bill waged a frantic campaign for votes to derail the legislation, arguing the $31 billion bill — crafted largely in closed-door Republican negotiations with the House — was too expensive and amounted to a collection of subsidies to special interests.

Six Republicans joined Democrats in opposing the bill.

As opponents to the bill appeared to gain strength, Vice President Dick began calling GOP senators urging them not to abandon the president on the issue. Energy Secretary Spencer Abraham, a former senator from Michigan, was dispatched to Capitol Hill in the hours before the voting.

Republican supporters of the bill called it balanced and said it would provide for diversifying the nation's energy sources.

But a growing number of senators — both Democrats and at least six Republicans — criticized the bill as too costly, a giveaway to energy industries, and bad for the environment.

The bill has "glaring examples of industry favors," said Sen. John McCain, R-Ariz., another opponent. He called it a "Thanksgiving turkey" stuffed with goodies for special interests.

Sen. Judd Gregg, R-N.H., also objected to the bill's price tag — an estimated $31 billion over 10 years — arguing that the measure exceeds the congressional budget ceiling.

The debate is over "allowing this country to get back into the business of producing energy," countered Sen. Larry Craig, R-Idaho. But that argument didn't sway enough senators to approve the first overhaul of the nation's energy agenda in more than a decade.

Source: Associated Press

Public Citizen Puts Together Analysis of the Energy Bill

(November 19) Public Citizen, a national, nonprofit consumer advocacy organization founded by Ralph Nader, has put together a quick analysis of the electricity policy sections of the national energy bill approved by a House-Senate conference committee this week. In addition, the group identifies some of the specific corporations receiving "pork" in the bill, such as the companies receiving the three separate federal loan guarantees to build privately owned coal-gasification power plants.

The information is available at http://www.citizen.org/cmep/energy_enviro_nuclear/electricity/deregulation/articles.cfm?ID=10717

Republicans OK Broad Energy Bill Draft

(November 17)  Congressional Republicans say they're pushing for completion of energy legislation after finishing a version that calls for doubling use of corn-based ethanol and provides billions of dollars in tax subsidies to energy industries. Approval of the bill is virtually assured by the House, probably next week, but it is likely to spur controversy in the Senate.

GOP lawmakers called the bill a path to "restructuring energy in this country" and said it would provide hundreds of thousands of jobs and bring greater stability into an energy sector stung by sharp price volatility, impending shortages and power blackouts.

But even as details of the draft bill, which is said to cover 1,700 pages, were being printed, Democrats complained about the Republicans' priorities. And they groused about the bill being crafted behind closed doors in negotiations by only GOP lawmakers.

Democrats - as well as some moderate Republicans - have strongly objected to a provision in the bill that would protect makers of MTBE, a gasoline additive that is contaminating water supplies, from product liability lawsuits.

Sen. Pete Domenici, R-N.M., chairman of the energy conference, said he hoped "there will be a strong surge" to get the bill through and avoid delays in the Senate.

President Bush applauded the agreement, saying an energy bill is an imperative for both economic and national security. "America will be safer and stronger with a national energy policy that will help keep the lights on, the furnaces lit and the factories running," he said in a statement Friday.

Still, the measure does not include one of Bush's top energy goals: opening the Arctic National Wildlife Refuge in Alaska to oil development. The provision was dropped after it became clear that Democrats and Republican moderates in the Senate would scuttle the whole bill over Arctic refuge drilling.

Major provisions in the Republican energy draft released Friday:

• A doubling of ethanol production for gasoline to 5 billion gallons a year by 2012. Production would increase to 3.1 billion gallons by 2005.
  
• Billions of dollars in tax incentives for producers of oil, natural gas, clean coal and nuclear power. The size of the tax package has yet to be made public, but is expected to be more than $20 billion, the majority going to traditional energy industries.
  
• Authority and financial help, including $18 billion in loan guarantees, to build pipeline to bring natural gas from Alaska's North Slope.
  
• Mandatory reliability requirements for high-voltage power lines and incentives to spur power line production.
  
• Eminent domain authority for the federal government for building critical interstate power lines if states don't act.
  
• Tax incentives aimed at improving energy efficiency of homes and some appliances and encourage use of renewable energy sources such as solar, wind and biodiesel.
  
• A requirement to speed up permits and easing of some environmental rules to promote energy development on public lands.
  
• Authority for the Energy Department to build a $1 billion reactor in Idaho to produce hydrogen and tax breaks to spur development of six next-generation commercial power reactors.
  
• Product liability protection for manufacturers of gasoline additive MTBE, which has contaminated water supplies in 28 states.
  
• A 10-year, $1 billion program to deal with "coastal erosion" for six states with offshore oil and gas production. Louisiana would get more than half of the money.

Source: Associated Press

U.S. Energy Bill Delayed Again

(November 12)  A Republican-written U.S. energy bill has has run into fresh snags, forcing the House to delay a vote until at least next week, while the Bush administration said it would accept legislation that did not open an Alaskan wildlife refuge to oil drilling.

A bill with an estimated $16 billion in tax incentives for oil, nuclear, coal, corn-based ethanol and other forms of energy production is a top priority of the White House as Congress hurries to wrap up its session, which ends next week.

Republicans have spent weeks writing a draft bill, shutting Democrats out of the process for the most part and keeping virtually all of the proposed legislation secret. Republicans had promised to release a draft bill on Monday and scheduled a House vote on Thursday.

But over the weekend the bill ran into last-minute snags involving "parochial issues" sought by at least two senior Republican senators, Charles Grassley of Iowa and Pete Domenici of New Mexico, according to legislative aides. One of the projects was a provision committing taxpayers to underwrite up to $15 billion for building new nuclear power plants. An energy lobbyist said there were last-minute attempts to include subsidies for things like coal-burning plants.

Lack of agreement over these and other issues prompted House Republican leaders to cancel all votes in the House this week.

A spokeswoman for Domenici, the bill's head negotiator, said "a few items" were not yet completed. She declined to elaborate.

The compressed schedule leaves Congress little time to debate and vote on the first major overhaul of U.S. energy policy in a decade. Lawmakers aim to adjourn on Nov. 21.

Sources: Reuters, Palm Beach News

Democrats Threaten To Block Energy Policy Bill

(November 12)  Democrats, angry at being largely shut out of Republican negotiations to write a broad energy policy bill, have warned they may try to block the legislation if it favors energy companies over consumers.

The energy bill with about $16 billion in tax incentives and credits for oil drilling, coal production, nuclear power plants, electric transmission grid expansion and ethanol production is a top priority of the Bush administration.

"Let me make it very clear, there will definitely be a filibuster in the Senate over a bad energy bill. There's just no question about that," Sen. Ron Wyden of Oregon said.

Wyden was joined at a Capitol Hill briefing by other Senate and House Democratic lawmakers, who complained Republicans have blocked them from helping to write a broad energy bill. "The fact is, we have been in the dark throughout this process," Wyden said.

Although the bill has not been made public, the Democrats said they were concerned the legislation includes language that would weaken federal clean air laws, shield MTBE fuel additive producers that pollute water supplies from lawsuits and other measures that would hurt American consumers.

"We are not at all reluctant to oppose bad energy policy," said Democratic Sen. Byron Dorgan of North Dakota.

Wyden said Democrats are willing to meet Republicans more than "half-way" and find "common ground" in coming up with a good energy bill. But he warned Republicans not to "stiff" consumers with bad energy policy.

Elsewhere on Capitol Hill, House Democratic Leader Nancy Pelosi of California said she would vote against the final energy bill, saying the legislation was "three-quarters corporate welfare and one-quarter political cynicism."

Under Senate rules, 60 votes would be needed in the 100-member chamber to end debate on the energy bill and proceed with a final vote. There are 51 Republicans in the Senate, along with 48 Democrats and Independent James Jeffords of Vermont, who normally votes with the Democrats.

Time will work in favor of the Democrats if they chose to filibuster the energy bill as Congress is aiming to adjourn in about two weeks. Before then, congressional leaders still have to schedule votes on a number of spending bills to fund the government and cannot afford to get bogged down in a multi-day Senate debate on energy legislation.

Source: Reuters

Senate Rejects Energy Regulation Plan

(November 6) On Nov. 5, the Senate rejected a proposal, growing out of the Enron scandal, to strengthen federal controls over energy trading and crack down on market fraud and manipulation.

Sen. Dianne Feinstein, D-Calif., argued that the nation was vulnerable to the kind of market manipulation that led to a crippling increase in electricity prices in her state several years ago.

But the Senate, in a 56-41 vote defeating her amendment to an agriculture-spending bill, sided with the administration view that federal regulations over the industry are already adequate.

Current cases against Enron and other energy companies accused of manipulating markets make clear, said Agriculture Committee Chairman Sen. Thad Cochran, R-Miss., that the government has the enforcement powers it needs to punish those defrauding consumers.

Feinstein, who said California's electricity bill jumped from $7 billion in 2000 to $28 billion in 2001, has tried twice previously, on larger energy bills, to advance her proposal for stricter oversight of energy markets, both times without success.

Her proposal would have closed the "Enron loophole" that allowed the energy trader to buy and sell energy holdings largely in secret without government regulation.

It would have improved price transparency in wholesale electricity markets, prohibited manipulation in electricity markets and provided the Commodity Futures Trading Commission more tools to monitor over-the-counter energy markets. Maximum fines for violating either the Federal Power Act or the Natural Gas Act would have risen from $5,000 to $1 million.

"We learned during the Western energy crisis that there was in fact pervasive manipulation and fraud in energy markets and that FERC (the Federal Energy Regulatory Commission) and the CFTC were either unable or unwilling to use the authority they had to intervene," she said.

"These markets do not work well without public confidence, without a degree of transparency," said Sen. Dick Lugar, R-Ind., one of three Republicans to vote for the measure.

But Treasury Department Secretary John Snow, Federal Reserve Chairman Alan Greenspan and other senior administration officials, in a letter to the Senate last June, warned that the proposed new regulations "could have significant unintended consequences for an extremely important risk management market."

Actions by FERC, CFTC and other agencies against Enron, Dynegy and others accused of market manipulation, "make clear that wrongdoers in the energy markets are fully subject to the existing enforcement authority of federal regulators," they wrote.

Source: Associated Press

Bush Urges Passage of Energy Bill

(November 4) In his sternest language yet, President George W. Bush has urged Republicans in the Senate and House to stop fighting over ethanol fuel tax credits and finish a broad overhaul of U.S. energy policy, which he said would help create more American jobs.

Bush has repeatedly called the energy bill one of his top legislative priorities. He dispatched Vice President Dick Cheney to Capitol Hill to prod Republicans to resolve an impasse over changes in an ethanol tax subsidy.

At issue is a long-simmering battle between Charles Grassley, chairman of the Senate Finance Committee, and Bill Thomas, chairman of the House Ways and Means Committee. Grassley, who has insisted on structural changes in the ethanol tax subsidy program, is from Iowa, the nation's leading corn producer. Ethanol is widely popular among the politically important Midwest states.

Thomas' home district in southern California has more than 37,000 producing oil wells, accounting for nearly 80 percent of the state's oil production. Oil refiners also make MTBE, a fuel additive that competes with ethanol but is being phased out by many states because it is a suspected carcinogen.

Thomas has rejected a Grassley plan to revamp ethanol tax credits so the government pays more money into the federal highway fund to make up the ethanol tax losses. Ethanol is exempt from 5.2 cents of the18.4 cent-a-gallon excise tax.

Source: Reuters

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