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National energy bill in final stretch Tax incentives, direct appropriations total tens of billions of dollars Larry Persily Petroleum News Juneau Correspondent
Not all lawmakers and lobbyists were happy with what finally made it in or out of the nation’s first comprehensive energy bill since 1992, but supporters said it’s a politically practical series of compromises as they pushed for its quick passage into law.
The House-Senate conference committee adopted the measure Nov. 17, with Republicans sticking together to defeat multiple Democratic amendments.
The House approved the bill the next day 246-180, with just one hour of debate. As Petroleum News went to press the morning of Nov. 20, Senate approval looked likely before lawmakers were scheduled to break for Thanksgiving, though some Democrats were talking about a possible filibuster.
President George Bush said he will sign the bill when it reaches his desk, calling it a good step in his economic plan to build the nation’s economy.
The president and lawmakers had been waiting for the bill since Congress returned to work after Labor Day from its summer vacation.
After passage of different bills in each chamber earlier in the year, the measure went to a House-Senate conference committee of 58 members, though only a few key Republican players were involved in the closed-door meetings where the final committee version was drafted. Little time for public review The full 1,100-page bill was presented to lawmakers, and the public, just two days before the committee vote.
“This has not been a traditional conference from the beginning,” said John Katz, head of the state of Alaska’s Washington, D.C., office.
Even in the last hours of committee work, before sending the bill to the House for a vote, Republicans found time — and the political need — to add several more items to the near-final legislation, including a few to help the coal industry:
• Federal loan guarantees for a proposed power plant using lignite coal from the Great Plains, requested by Sen. Byron L. Dorgan, D-N.D., the only conference committee Democrat to approve the bill’s final version.
• A $5 million Midwest demonstration project to prove the coal-cleaning effectiveness of “high-energy electron scrubbing technology.”
• A $2 billion provision, supported by Rep. Joe Barton, R-Tex., to help utility companies cover the costs of installing pollution-control equipment in older coal-burning power plants. Senate Democrats grumble “This bill should be stopped in whatever way possible, and I will be checking with my colleagues to see if we have the support to do so,” said Sen. Charles Schumer, D-N.Y. Amending the bill after it moves to the Senate, however, is extremely difficult, and few expected Democrats to block the bill by filibuster.
“I think we’re being asked to take it or leave it,” said Sen. Jeff Bingaman, D-N.M., the ranking minority member of the Senate Energy and Natural Resources Committee.
And although Democrats complained about the process, many are from farm states that are well represented by increased federal subsidies in the bill for increased use of corn-based and soybean-based blended ethanol fuels. The legislation expands the federal tax credit program for ethanol to almost double the use of ethanol-blended fuel to 5 billion gallons a year by 2012. Farm states are happy “It’s good for agriculture, good for jobs in Nebraska,” said Sen. Ben Nelson, D-Neb.
The tax break for ethanol is among the multitude of federal incentives in the legislation, with critics estimating the total for tax credits and other incentives at $23.5 billion over the next decade. The total is almost three times what the president had said he wanted.
Of those tax credits, an estimated $14.5 billion are earmarked for coal, oil and gas over the next 10 years.
Direct federal spending called for in the bill — much of which is subject to future appropriations by Congress — has been estimated at billions of dollars more. Product liability shield is controversial One of the more controversial items in the bill is a provision to protect from liability lawsuits those companies that make a gasoline additive blamed for contaminating groundwater. MTBE, or methyl tertiary butyl ether, is used to make gasoline burn cleaner, but presents its own problems when it lingers in groundwater from gasoline spills. The chemical is suspected of being a carcinogen.
The legislation would phase out MTBE over the next decade, replacing it with corn-based ethanol that also helps reduce gasoline emissions.
The protection against liability for cleanups is retroactive to Sept. 5, potentially disrupting a number of legal actions under way to recoup cleanup costs in several states.
“Americans will pay more in property taxes and water bills if Congress lets oil companies off the hook for billions in MTBE cleanup costs,” said U.S. Public Interest Research Group Clean Air Advocate Emily Figdor.
“It’s completely immoral,” said Sen. Barbara Boxer, D-Calif.
MTBE producers also could receive up to $2 billion in federal funding to help cover the cost of phasing out the product. The payments could come at $250 million a year through 2012. Home-state protection The MTBE provisions were championed by House Majority Leader Tom DeLay, R-Texas, and House Energy and Commerce Committee Chairman Billy Tauzin, R-La., whose states are home to MTBE producers. Tauzin said attorneys were trying to reach into the pockets of MTBE manufacturers, and said the immunity from liability would not apply in cases of negligence.
Manufacturers argued they should be shielded from product liability claims because the federal government encouraged use of the additive to ease air pollution.
While much of the bill deals with oil and gas issues, the drive for passage came after much of the East Coast and Midwest went dark in August.
The regional blackout prompted Congress and the president to pledge solutions to the nation’s electrical distribution problems. Electrical utility provision The legislation repeals the 1935 Public Utility Holding Company Act, which bars non-utility companies from buying or taking a controlling stake in utilities. Supporters of the repeal, including the electrical power industry, said it would help attract investments needed to strengthen the nation’s electrical transmission system.
Opponents said it could lead to concentration of utility ownership in a small number of large companies.
Despite calls early in the negotiations for a federal overhaul of the nation’s electrical distribution grid, the bill stopped short of an immediate change and instead orders a three-year delay of a federal plan requiring utilities to adopt a national grid design. The plan, if it is eventually adopted, would force utilities to turn over operation of their power grids to regional managers.
But profitable utilities and state regulators are resistant to give up control oppose the national grid design.
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