Energy Bill Full of Production Incentives Advances in Congress
Apr 18, 2005 -- STATE DEPARTMENT RELEASE/ContentWorks
A bill aimed at increasing domestic production of energy and bringing down energy prices in the United States has been approved by a House of Representatives committee.
The bill could be considered by the full House as early as the week of April 17, according to news reports.
In an April 14 news release, Representative Joe Barton, Republican chairman of the Energy Committee, said, "This bill will increase our domestic energy supply, promote conservation and reduce prices for consumers."
In order to become law, a bill must be passed by both by the House of Representatives and the Senate and by signed by the president.
Democrats and environmental groups criticized the Energy Committee bill as a gift to big energy businesses that would harm the environment without doing much to lower energy prices.
The measure would provide tax incentives worth $8 billion to domestic producers of fuels such as oil, natural gas and coal as well as electricity derived from nuclear power. However, it would offer relatively little for conservation and generation of renewable energy.
The legislation also calls for more federal power over states and the relaxation of federal regulations to facilitate construction of liquefied natural gas terminals and nuclear power plants and to boost the capacity and reliability of the country's electricity transmission grid. In addition, it would authorize expansion of the U.S. Strategic Petroleum Reserve.
The Bush administration has long sought an energy bill that would promote conservation and efficiency, increase domestic production, diversify U.S. energy supply and modernize energy infrastructure. Recently, the president said that energy legislation is one of his top priorities for the second term.
In his budget request for the fiscal year that begins October 1, Bush has asked for a smaller package of tax incentives than the one included in the Energy Committee bill; the president's plan would have directed those incentive, to a larger degree, to producers of renewable energy.
The bill destined for House action is less costly but otherwise similar to the $30 billion energy bill considered by Congress in 2003 after an arduous legislative process. The previous measure failed to pass because of opposition by Democrats and some Republicans in the Senate to its most controversial provisions.
Those provisions are again likely to be the main points of contention in House-Senate negotiations on a final bill if both chambers pass their respective versions of the legislation.
Barton vowed to prevail over expected opposition to a provision that would give liability protection to producers of a gasoline additive called methyl tertiary butyl ether (MTBE).
A few states that brought lawsuits against producers of the additive claim that it contaminates drinking water when it leaks from underground tanks.
Another provision would allow drilling for oil in the Arctic National Wildlife Refuge (ANWAR) in Alaska. Democrats, who have long opposed it, said that oil development would spoil one of the most pristine areas in the world.
But Republican proponents of drilling said that tapping oil resources in the refuge is essential to making the U.S. economy less dependent on oil imports and that oil exploration there could be done without harming wildlife.
Republicans' attempts during Bush's first term to open ANWAR for drilling failed due to Democrats' resistance in the Senate. However, with Republicans holding a wider majority in the chamber and growing concerns about rising gasoline prices, the prospects for allowing oil exploration in the refuge are viewed as stronger.
House Democrats' efforts to direct the bill more toward energy conservation largely failed. Most amendments to that effect, including one calling for more stringent fuel-efficiency standards, were defeated. One of the approved measures would stop deliveries of crude oil to the Strategic Petroleum Reserve until fuel prices fall below a certain level; another would encourage more fuel-efficient aircraft.
The Senate, which has not taken up an energy bill yet, appears to be moving toward bipartisan energy legislation.
"I don't know if there's anything that we're working on that we think cannot be worked out," Alex Flint, majority staff director for the Senate Energy Committee, said at an April 14 press briefing.
The Republican chairman of the committee, Senator Pete Domenici, said he is planning to take up energy legislation later this spring.
(The Washington File is a product of the Bureau of International Information Programs, U.S. Department of State.)
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