Capitol: A wide range of topics will be on the table as lawmakers warn of national crisis. Battles shape up as some push conservation, alternative fuels and others favor expanded drilling, nuclear power.
WASHINGTON--Within days,
Congress will launch a debate that could lead to the most thorough overhaul of
U.S. energy policy since the oil shortages and price spikes of the 1970s.
Spurred by California's power problems and lesser
energy shocks in other parts of the country, lawmakers of both parties say
momentum is growing to consider a wide range of legislative remedies.
In the Senate, a key Republican is putting the
final touches on a 250-page-plus omnibus bill that would promote new development
of oil, natural gas, coal and nuclear power.
Democrats plan to counter with legislation that
would put more emphasis on conservation, energy efficiency and alternative fuels
such as solar and wind power.
Individual House and Senate members are weighing
in with proposals of their own, from allowing West Coast states to regulate
daylight saving time to boosting federal home energy assistance to low-income
families.
Some of the measures, especially President Bush's
favorite energy initiative--opening up Alaska's Arctic National Wildlife Refuge
to oil drilling--are already drawing opposition from environmentalists, many
Democrats and even some Republicans. Proposals to offer tax incentives to
encourage domestic oil and gas production are opposed by some taxpayer groups.
For the first time in years, energy legislation is
attracting as much attention on Capitol Hill as perennial show-stoppers such as
tax cuts.
"We're facing another energy crisis in this
country, and we need to move quickly," said Rep. Billy Tauzin (R-La.),
chairman of the House Energy and Commerce Committee.
"We've got to look at comprehensive energy
policy," echoed Senate Minority Leader Tom Daschle (D-S.D.). "I think
both parties are prepared to do that."
And while it's not just about California anymore,
the state has clearly become the poster child for the campaign to draft a new
national energy strategy.
"California depended on 25% of its energy
coming from outside of the state, and look at the pickle they got in," said
Sen. Frank Murkowski (R-Alaska), chairman of the Energy and Natural Resources
Committee.
"We're 56% dependent on imported oil in this
country. How much further does it have to go before our national energy security
is at risk?"
Murkowski is the principal author of the Senate
GOP bill, which he plans to introduce in about a week. Although the White House
is conducting its own energy policy review, Murkowski's measure will include
many of the proposals that Bush pledged to pursue as a candidate:
The bill would provide new tax incentives for
domestic production of oil and natural gas. It would attempt to revive the
nuclear power industry.
The plan also boosts federal funding for
"clean coal" technology. It would require a study of ways to speed up
construction of pipelines and transmission lines. It would promote energy
efficiency and the use of alternative fuels.
And, it would carry out Bush's most divisive
energy initiative: allowing drilling for oil in the Arctic National Wildlife
Refuge.
Murkowski's bill would not, however, provide
immediate relief to California.
With that in mind, a bipartisan group of
California lawmakers is pushing legislation that would impose federal price
controls on wholesale electricity. But price caps face strong opposition from
the Bush administration, and the prospect of passage seems remote.
Other consumer-friendly proposals are expected to
fare better. In response to natural gas price spikes across the country,
Congress is expected to act quickly to boost home heating and air-conditioning
assistance for low-income families.
Murkowski said his National Security Energy Act
seeks to reduce U.S. dependence on foreign oil to 50% of total supplies by 2010.
During the 1973 Arab oil embargo, the United States imported 36% of its oil. It
now imports 56%, including about 750,000 barrels a day from Saddam Hussein's
Iraq. "We get his oil, put it in our airplanes and then go bomb him,"
Murkowski said.
Murkowski insists the bill would be balanced. It
wouldn't give significant breaks to big oil companies, he said, but rather would
extend help to the little guys whose low-output wells become uneconomical when
prices drop below a certain level.
Lee Fuller, vice president of government relations
for the Independent Petroleum Assn. of America, said most of the tax incentives
in the bill would help "small producers who are drilling 85% of the wells
in this country and producing 65% of the natural gas."
High Expectations by Energy Industry
Energy industry officials have good reason to have
high expectations this year.
Besides the energy scares in California and
elsewhere, two ex-oilmen were just elected president and vice president. Bush
has not only made energy a top priority, he already has appointed Vice President
Dick Cheney to head a task force to develop a new national energy strategy.
"For the first time, we're going to have
these things focused on in the right manner," said Jerry Jordan, chairman
of the petroleum association.
In the House, pro-business lawmakers will play key
roles in crafting energy legislation. They include Tauzin, the House energy
panel chairman; Majority Whip Tom DeLay (R-Texas), who has been put in charge of
coordinating energy legislation; Rep. Joe Barton (R-Texas), chairman of a
subcommittee on energy and air quality; and Rep. Bill Thomas (R-Bakersfield),
chairman of the House Ways and Means Committee.
The interest level reflects more than just
committee posts. Natural gas price spikes and supply shortages recently forced
six ammonia plants to shut down in Tauzin's home state, while Thomas likes to
point out that Kern County in his district produces more oil than Oklahoma.
In addition, the Republicans, who control both
Congress and the White House for the first time in decades, raised more than $23
million from oil and gas interests for the recent campaigns, according to the
Center for Responsive Politics.
Even so, passage of pro-industry legislation is
not necessarily a slam dunk.
"If you made me wager now whether there would
be a comprehensive energy bill that makes it to the president's desk, I think
you would get only even odds," said David Nemtzow, president of the
Alliance to Save Energy, a coalition of business, consumer, government and
environmental leaders.
"The big question before the administration
is, will they put forward a balanced energy proposal that has energy efficiency
as one of its cornerstones . . . or will they make the mistake that's been made
in the past and look at drilling and building as the only answers to our
problem?"
Still, environmentalists are worried.
"We're facing a very difficult period to try
to protect the public interest," said Daniel Lashof, senior scientist with
the Natural Resources Defense Council. "The oil and the coal industry have
a long wish list, and they have a sympathetic ear in both the chairman of the
Senate Energy Committee and the vice president."
Environmentalists characterize positive elements
in the Murkowski bill as a "Trojan horse" designed to mask more
controversial elements such as the Arctic drilling provision.
"We can't drill our way to energy
independence," said Melinda Pierce, a Sierra Club lobbyist.
Taxpayer Groups Target Incentives
Taxpayer groups are lining up to oppose many of
the tax incentives and subsidies. Among their targets: a provision to have the
federal government pay half the cost of installing clean-coal technology in
power plants, and another to renew royalty payment relief to oil companies that
drill deep-water wells in the Gulf of Mexico.
Cena Swisher, program director at Taxpayers for
Common Sense, said the bill represents "21st century trickle-down
economics. It gives billions of dollars to energy corporations, while taxpayers
don't get anything."
Lexi Shultz, staff attorney of the U.S. Public
Interest Research Group, said the oil and gas industry already receives $1.2
billion to $2.6 billion a year in tax breaks, and it doesn't need any more.
Sen. Jeff Bingaman (D-N.M.), the top Democrat on
Murkowski's committee, cautioned against moving too quickly to approve tax
incentives. "You've got the president releasing a $1.6-trillion tax cut
bill and insisting that he doesn't want any additions to it. Now these are
additions. Each one should be scrutinized."
Some of Murkowski's proposals enjoy bipartisan
support. They include a $1-billion increase in home heating assistance for the
poor, tax incentives for buying energy-saving appliances, and a $2-billion,
10-year program to make schools more energy efficient.
California lawmakers, meanwhile, are drafting
their own energy bills.
Sen. Barbara Boxer (D-Calif.) has proposed a
series of measures: a federal loan program that would help states create an
electricity "reserve" to provide power during shortfalls, a tax on any
"windfall profits" reaped by power generators, and tax credits for
conservation measures such as new insulation and weather stripping.
Sen. Dianne Feinstein (D-Calif.) plans to push one
of her pet causes: tougher fuel economy standards for sport utility vehicles, an
action she said would save 1 million barrels of oil a day and reduce imports by
roughly 10%.
Yet even the most aggressive reformers acknowledge
that there are limits to what Congress can do, particularly as the West heads
into the peak summer months with low reservoirs restricting the ability of
hydroelectric plants to provide enough power.
As one utility official noted during a recent
congressional hearing: "Not even Congress can make it rain."
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