U.S. Senate passes ‘recycled’ energy bill

Out with this session’s bill, in with the old, Senate-House conference committee next step

Steve Sutherlin

Petroleum News Associate Editor

The U.S. Senate passed a comprehensive energy bill July 31, identical to the energy bill passed overwhelmingly last year under Democratic leadership. In a stroke of bipartisan compromise, the Senate adopted its previous stab at an energy bill, to end bitter partisan bickering that threatened to derail Senate passage of an energy bill this session.

Democrats praised the move, saying the Senate’s new (and old) energy plan, the Energy Policy Act of 2003, is far superior to the one that was attempting to emerge from the current, Republican-controlled Senate.

“This bill isn’t perfect, but it is a vast improvement over the Republican bill in the Senate and an immeasurable improvement over the Republican bill in the House,” Senate Minority Leader Tom Daschle said in a statement.

Daschle was pleased with the Senate’s bill because it contains ethanol-use incentives as well as incentives to build an Alaska natural gas pipeline, both of which will benefit South Dakota agricultural interests Daschle must please in this election year.

“One of the ways the legislation reduces our dependence on foreign oil is by nearly tripling our use of ethanol in the United States,” Daschle said, adding that the so-called Renewable Fuels Standard benefits agriculture and the nation’s economy, particularly in South Dakota, potentially adding 10,000 jobs there, as well as $620 million a year to state coffers.

Daschle said a pipeline from the North Slope of Alaska would create jobs for American workers and bring 35 trillion cubic feet of natural gas to other states.

“This is estimated to generate 400,000 jobs and enormous quantities of U.S. made raw materials, including 5 million tons of steel,” he said. “It will improve our air quality; and reduce emissions of greenhouse gases.”

At odds with Alaska’s delegation

But Daschle is at odds with the Alaska Congressional delegation on another major issue, which the Senate bill ignores. The House bill includes a provision to open the 1002 area of the Arctic National Wildlife Refuge to oil and gas exploration, an energy solution Daschle and other Senate Democratic leaders oppose. The Senate bill has hotly debated ANWR exploration in the past. The ANWR issue remains likely to resurface before a national energy bill is finalized.

Before any energy bill hits the president’s desk, the both the Senate version of an energy bill, and a House version, must be blended into a compromise bill by a Senate-House conference committee, and that compromise version must be ratified by both the House and the Senate. Republicans will hold a swaying edge in the committee, making it likely that a combined bill will include an ANWR development clause.

Sen. Pete Domenici, chairman of the Senate Energy and Natural Resources Committee will chair the Senate-House conference committee negotiations to craft a final energy policy package.

Domenici said in a July 31 statement, the 84-14 agreement to resurrect the last year’s Senate-passed energy bill is a vehicle for moving the bill forward.

“This deal is not how I envisioned getting an energy bill to conference. But if it gets us closer to our goal, I consider it a win,” Domenici said.

“I look forward to chairing the conference on this bill. I promise you we will write many of this year’s energy provisions into the bill at conference. We will do more production. We will do more for energy diversity. We will do more for research,” he said. “The final bill will look more like what I produced in committee this spring than the bill we just passed.”

Tax incentives in the Senate bill to promote construction of a trans-Alaska gas pipeline in the are different from this year’s hybrid gasline incentive package, but they will do for now, Sen. Lisa Murkowski said.

“The provisions clearly are sufficient to allow Senate and House conferees to craft assistance to help get a gasline from Alaska built.”