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Providing coverage of Alaska and northern Canada's oil and gas industry
October 2003

Vol. 8, No. 43 Week of October 26, 2003

Another energy bill deadline

House-Senate conference committee schedules vote Oct. 28

Larry Persily

Petroleum News Juneau Correspondent

The federal energy bill could come to a vote before House and Senate conferees Tuesday, Oct. 28, with action by the full House the next day and the Senate soon thereafter.

At least that was the tentative schedule circulating around Washington, D.C., on Oct. 23.

“We’ve had deadlines all through the process,” said John Katz, director of Alaska’s office in the nation’s capital. “This is just the latest one.”

The House Energy and Commerce Committee will post the compromise energy bill on its web site as soon as it is available, Katz said. Meanwhile, Alaska waits for answers to its wish list of energy bill provisions, including federal tax credits to encourage construction of the $20 billion natural gas pipeline from the North Slope, federal tax credits to promote development of heavy oil reserves on the slope, and congressional approval to open the coastal plain of the Arctic National Wildlife Refuge to oil and gas drilling.

Republicans promise 48 hours notice

House Energy and Commerce Chair Billy Tauzin, R-La., and Senate Energy and Natural Resources Chair Pete Domenici, R-N.M., have promised to give congressional Democrats 48 hours to review the bill in advance of the conference committee meeting, meaning the draft could be on the web site sometime Sunday, Oct. 26 (http://energycommerce.house.gov/).

Republican leaders have been debating and drafting the bill in private, prompting protests from minority Democrats. However, Democrats’ requests have not been ignored by negotiators, and one of the most contentious battles has been over increased federal tax support for corn-based ethanol production, a key demand of Senate Minority Leader Tom Daschle, D-S.D.

Deadlines, however, are flexible in Washington, and this latest attempt to bring the energy bill to a vote could go the way of so many other missed target dates since Congress returned from its summer break after Labor Day to finish work on the bill.

“They haven’t met any of their previous deadlines, have they?” said Roger Herrera of Arctic Power, the state- and industry-funded lobbying group that has been working to open ANWR for 10 years.

Not giving up on ANWR

Despite news reports that the state has lost in its push for congressional approval to open ANWR to oil and gas exploration, Herrera said he is still hopeful. “You just have to take little notice of the smoke that blows around here.”

Opponents to opening ANWR say they will filibuster the energy bill to protect the arctic coastal plain, and supporters acknowledge they are short of the 60 votes needed to stop a filibuster in the 100-member Senate. Domenici has not moved from his position that he will leave ANWR out of the bill to avoid a filibuster unless supporters can show him they have 60 votes.

Herrera last year promised his wife he would retire but, as he said, “she gave me a pass for this year,” and he does not know whether he will retire at the end of this year. “My promise is on hold,” while waiting for the energy bill, he said.

And while congressional Democrats and the public are not likely to see the full draft bill until 48 hours before the conference committee meeting, Domenici has invited Sen. Lisa Murkowski, R-Alaska, to look over the details that have been settled, said Chuck Kleeschulte, spokesman for Murkowski. But missing from that list are the oil and gas tax credits of interest to Alaska.

The fight is over tax credits

The bill’s major tax credits are the biggest obstacle to completion of the measure, with some fiscal conservatives arguing against billions of dollars of oil, gas, nuclear, solar, coal and ethanol credits vs. home-state supporters of the tax provisions. The battle also includes how much to devote in tax credits to so-called clean energy, such as solar power, vs. traditional sources, such as coal.

And even if Murkowski is given an advance look at the tax credit provisions, Kleeschulte said he doubts she would release them. “We would be bound by the rules of rationality,” he said, and would not want to make an early announcement for fear that opponents of individual provisions would gain more time to mobilize House and Senate members against them.

Even if someone does release the provisions ahead of schedule, that’s no guarantee the reports will be accurate. “In the normal course of business there is a lot of leaking on Capitol Hill,” however sometimes the leaks contradict one another, Katz said.

While waiting for the real announcement of the energy bill, Katz said he is answering a few technical questions about tax credits for heavy oil on the North Slope but otherwise the calls have pretty much stopped. House and Senate members and their staff have listened to the issues and know what they believe they need to know. It’s just a matter of finding the compromises needed to finish work on the bill, he said.

The state has pretty much shut down its educational lobbying on the issues, Katz said. “There’s very little we can do without overstaying our welcome.”

Waiting on the tax chairmen

Everyone seems to be waiting on the tax-writing chairmen for answers to the multibillion-dollar credit provisions of the bill. House Speaker Dennis Hastert, R-Ill., and Senate Majority Leader Bill Frist, R-Tenn., are pushing Senate Finance Chair Charles Grassley, R-Iowa, and House Ways and Means Chair Bill Thomas, R-Calif., to settle their disputes and move the bill to the conference committee for a vote.

Among the private battles under way is opposition among some moderate Republicans, particularly from coastal states, against a provision to inventory offshore oil and gas resources. Senate Budget Chair Don Nickles, R-Okla., has said he might not support the bill if it contains more than $1 billion for mining programs pushed by his Wyoming colleagues.

Money is an issue in the bill because all of the various proposed tax incentives and programs are estimated to cost the U.S. treasury $16 billion or more, which far exceeds the president’s limit and that of Congress’ own spending outline. Negotiators are looking at cutting federal sspending elsewhere to cover some of the costs, which adds to the political problems in writing a final bill.






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