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

Vol. 8, No. 48 Week of November 30, 2003

Federal energy bill vote falls short

Legislation back on agenda for when senators return in January

Larry Persily

Petroleum News Juneau Correspondent

Although the federal energy bill is in hibernation until at least January, congressional leaders are showing no shortage of energy in passing out blame for its failure to pass this year.

Democrats blame Republicans for adding too much spending and too many tax credits to the bill, which is being called by its critics a “porkfolio” of special-interest legislation.

Republicans blame Democrats for stalling essential legislation that they claim would create almost 1 million jobs nationwide.

And labor unions have joined the tussle, too, with the United Auto Workers opposing the bill because of its provision removing limits on utility company mergers. The Teamsters Union pulled its support from the bill because it fails to open Alaska’s Arctic National Wildlife Refuge to oil and gas drilling — and jobs.

Meanwhile, opponents of the 1,100-page bill are finding a seemingly endless stream of provisions to hold up for public ridicule, including a bond proposal for a Shreveport, La., mall that would include a Hooters restaurant. The mall would be covered under a provision for $2 billion in federally backed “green bonds” to finance four projects nationwide featuring high-efficiency windows and other energy-saving construction materials.

Home district benefit

Rep. Jim McCrery, R-La., whose district includes Shreveport, is a member of the tax-law-writing House Ways and Means Committee and one of 45 House members on the closed-door conference committee that wrote the energy bill.

“I warned our Republican friends that they were going to load up this bill to a point where it couldn’t pass,” said Senate Democratic Minority Leader Tom Daschle of South Dakota. “That’s exactly what happened. They ignored my warnings.”

Daschle, however, was himself at the table when home-state provisions were parceled out by Republican leaders to collect support for the bill. Daschle, and other farm-state senators, were successful in winning a provision to double the amount of corn-based ethanol blended into motor fuels by 2012. Having taken care of his constituency, Daschle broke from most Democrats and supported the bill.

Not all Democrats support ethanol

Not all saw the farmer-friendly ethanol provision as a plus. Sen. Bill Nelson, D-Fl., called it “truly ugly,” arguing that growing corn and turning it into ethanol consumes more energy than it produces.

Not to miss note of the holiday season, Sen. John McCain, R-Ariz., among the loudest critics of the bill, called it a “Thanksgiving turkey” stuffed with provisions to please special interests.

The House passed the bill on a 246-180 vote Nov. 17, sending it to the Senate where supporters had hoped to win passage in time for Thanksgiving adjournment. The plan failed when they came up two ayes short Nov. 21 on a motion to close off debate and vote on the final bill. Without 60 votes to stop a filibuster, Senate leaders Nov. 24 called a halt to the campaign and said they would bring up the bill again when they return to work in January.

Several options for next year

The Senate could adopt the bill as is, amend it just enough it to win a few more votes — assuming the House agrees with any amendments — or start over. John Katz, head of the state of Alaska’s office in Washington, D.C., said he hasn’t seen any interest by congressional leaders in starting over to build a new energy bill.

He also expects the bill stands a better chance of passage early in the year, before campaigns get too far along for the 2004 presidential and congressional races.

But there’s no need to wait for the campaigns to hear political rhetoric on who is to blame for the bill’s failure to pass. Senate Republican Majority Leader Bill Frist of Tennessee said on CNN two days before he officially declared the bill done for the year that “the Democrats are going to have to explain it” if the nation is hit with higher natural gas prices or a power blackout this year.

Six Republicans broke ranks

Efforts to pick up the two votes needed for passage failed when Senate leaders could not entice any of the six Republicans or 33 Democrats who had voted in support of the filibuster to change their minds.

The Republicans were Sens. John Sununu and Judd Gregg of New Hampshire, Olympia Snowe and Susan Collins of Maine, Lincoln Chafee of Rhode Island and McCain.

GOP opponents focused on the provision that would protect manufacturers of the gasoline additive MTBE, or methyl tertiary butyl ether, from pollution liability. The additive, used to clean up gasoline emissions, faces its own cleanup problems where it has leaked and threatens underground water supplies.

“A safe harbor for manufacturers of MTBE is unacceptable,” said Sununu, whose state has filed a lawsuit against oil and chemical companies for damages from water contamination.

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, pushed hard to win the federal protection from liability lawsuits.

Senator blames lawyers

Coming to the defense of his colleagues, House Speaker Dennis Hastert, R-Ill., blamed trial lawyers for stirring up the opposition to the liability waiver.

Then there are those who split on the bill’s two most controversial provisions. Sen. Richard Durbin, R-Ill., called the liability waiver “the most egregious giveaway I’ve ever seen in my time on Capitol Hill.” But the ethanol tax credit is a good provision, he said.

Democratic presidential candidates Sens. John Kerry of Massachusetts and John Edwards of North Carolina missed the Senate vote to shut off debate on the bill and thus escaped taking a position on the measure.

Newspapers, which have reported the stream of criticism of the bill, make money by focusing on the negative, said Sen. Lisa Murkowski, R-Alaska. She spoke to the Alaska Resource Development Council in a recorded address Nov. 20.

Sen. Murkowski supports bill

“It is not perfect, but it is a good bill,” she said in a prepared statement that same day. “I urge my colleagues to support its adoption.”

The bill includes more than $1 billion in funding for rural energy projects in Alaska and several key permitting and financial incentive provisions to promote construction of a natural gas pipeline from Alaska to mid-America.






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