Energy bill legislation moving through House and Senate committees

Maureen Lorenzetti
Washington Editor

WASHINGTON, DC, Mar. 24 -- Republican congressional leaders redoubled efforts last week to reach consensus on a comprehensive energy bill this year that tracks the White House's energy policy goals.

In the House, an Energy and Commerce subcommittee passed a measure Mar.19 that largely follows legislation the full House approved last year. The House Energy and Air Quality Subcommittee passed Chairman Joe Barton's energy plan relatively intact, with few amendments accepted.

Democratic lawmakers unsuccessfully tried to change the bill throughout the 1-day mark up. Rep. Sherrod Brown (D-Ohio) offered an amendment calling for a national gasoline stockpile modeled after the Strategic Petroleum Reserve. That measure failed on a 10-18 vote.

Other rejected amendments would have boosted auto fuel efficiency standards and discouraged diesel fuel use in hydraulic fracturing.

A proposal by Rep. Ed Markey (D-Mass.) seeking to boost natural gas price transparency was withdrawn but may see action on the committee level. Markey said he wants a government-controlled clearinghouse to gather price information instead of having marketers use trade publication figures as benchmarks.

Next action
Barton's bill, which as yet does not include clean fuel reform provisions or a tax title, will likely be considered by the full House and Energy Commerce Committee the first week in April. Republican leaders in both houses want a comprehensive bill to include new tax incentives for domestic oil and gas production and provisions that retool the reformulated gasoline market.

A May 2001 White House energy blueprint called for RFG market rules to be simplified but did not offer specific guidance on such thorny issues as how to address water contamination problems associated with the clean fuel additive methyl tertiary butyl ether. Congress this session is expected to tackle MTBE concerns and to consider a possible ethanol mandate plan.

The White House energy plan does not advocate new tax incentives to boost domestic production. Both the House and Senate, however, are expected to add new tax incentives into a bill, albeit not as generous as the versions discussed last year, which included $8 billion in the House bill and $4 billion in the Senate package for oil and gas.

One key proposal expected to be missing from a final energy bill is leasing within the Arctic National Wildlife Refuge. The Senate defeated 52-48 a proposal to effectively allow leasing under a budget resolution last week (see OGJ Online, Mar. 19, 2003.)

ANWR supporters, which include most of the House Republican leadership, say they will not give up on ANWR drilling and may seek to include a leasing provision in an energy bill. Last year, the House energy proposal included ANWR; the Senate version did not.

This year Senate ANWR leasing opponents have warned Republican leaders that an energy bill will not pass Congress with an ANWR development plan in it. House leaders remain undaunted, however, and say they will press to see ANWR leasing happen. They have not ruled out trying to include it in other pending measures before Congress.

Another proposal that could sidetrack a comprehensive energy bill is reform of the wholesale electricity market. Senators from Western states dislike an administration plan to standardize the wholesale electricity grid, saying it oversteps federal authority.

Senate proposals
In the Senate, the chairman of the Committee on Energy and Natural Resources Pete Domenici (R-NM) plans to mark up an energy bill Apr. 1-10 with a goal of getting the measure to the Senate floor in May. Although a draft of the pending proposal has not yet been released, committee staff members have outlined what they anticipate in the draft.

Like Chairman Barton in the House, Domenici at least initially plans to leave RFG reform and tax issues to other committees that hold jurisdiction. However, another energy committee member may seek to include an RFG proposal during the mark-up process on Domenici's bill, Senate energy staff said.

Similarly, the Bush administration's new controversial "Clear Skies" plan, which seeks to streamline the way that utilities meet federal air quality rules, also may be inserted as an amendment during the mark-up process in committee or added during floor debate, which could take 3-6 weeks.

One item guaranteed to be missing from a Domenici draft is ANWR leasing, because the Senate already rejected a proposal under a budget resolution plan that did not require a 60-vote supermajority.

A Domenici spokesperson said that while the senator was "sorely disappointed" an ANWR provision was stripped from the Senate budget blueprint, he is "pragmatic" enough to understand that ANWR probably has an even smaller chance of surviving an energy bill that can be filibustered.

Nevertheless, the senator has not completely abandoned the idea of Congress passing legislation that includes ANWR. A staff member said that it is not the "current" intention to have it in an energy bill. ANWR proponents insist there still is a chance such legislation may be approved by this Congress, perhaps in the context of improving energy security if world events were to trigger a dramatic increase in world oil prices.

Other domestic issues
Another Alaska-related provision likely to be hotly debated is a plan to encourage the construction of a $20 billion natural gas export pipeline from Alaska's North Slope to the Lower 48.

Before the November 2002 elections, lawmakers considered a Senate plan that offered both loan guarantees and a floor price to spur construction of the Alaskan gas line. Senate language included a $10 billion loan guarantee, along with a tax credit triggered when the Alberta hub price falls below $3.25/MMbtu.

The White House endorsed the idea of a pipeline but had serious reservations about incentives connected with the project.

The House bill did not offer any kind of tax incentive for the pipeline but mandated a southern route favored by Alaskans. Domenici's new proposal is expected to endorse that southern route which parallels the existing oil pipeline from the North Slope to Fairbanks and then the Alaska Highway to British Columbia.

Producers also are considering a northern route favored by the Canadian government that runs across the Beaufort Sea into Canada's Mackenzie Valley.

Senate Energy Committee officials said they expect negotiations to commence shortly on what kind of "fiscal incentives" may be needed to build the pipeline, which proponents say could become the single largest US construction project so far.

One proposal now being informally discussed within industry would allow producers to receive as much as 52¢/MMbtu credit for Alaska gas transported to market. The credit phases out when prices are $1.35/MMbtu.

Additionally, the US government would guarantee up to 80% of the total capital cost of the project. Producers also want the government to allow pipeline owners to accelerate depreciation of the asset to 7 years from 15 years. Finally, they would like to see a 35% tax credit for a gas treatment plant connected with the project.

Lower 48
The Senate energy bill also would encourage domestic production in frontier areas and deep water, although there would be no effort to lift existing drilling moratoriums, Republican energy committee staff said.

Of keen interest to Domenici are means of streamlining the public land permitting process. And while the administration has existing legal authority to reduce bureaucratic red tape, Congress may want to offer statutory guidance to help reduce costly and time consuming litigation, staff members said.

Contact Maureen Lorenzetti at

Related Articles

WAFWA: Aerial survey finds lesser prairie chicken population grew

07/06/2015 A recent range-wide aerial survey found the lesser prairie chicken population rose 25% from 2014 to 2015, the Western Association of Fish & Wil...

Production ramps up from Sunrise oil sands project

07/06/2015 Husky Energy Inc., Calgary, reported that 25 well pairs are now on production at its Sunrise oil sands project in northeastern Alberta. Steaming is...

Buru awarded onshore Canning licenses

07/06/2015 Buru Energy Ltd., Perth, and Mitsubish Corp. have been granted two production licenses for Ungani oil field in the onshore Canning basin of Western...

Cenovus sells royalty business for $3.3 billion

07/06/2015 Cenovus Energy Inc., Calgary, inked an agreement to sell its wholly owned subsidiary Heritage Royalty LP to Ontario Teachers’ Pension Plan for gros...

CERI: Energy, operational efficiencies possible in Canadian oil, gas

07/06/2015 Measures can be taken by operators in the expanding resource-intensive Canadian oil and gas sector to improve both energy efficiency and operationa...

AGL Energy to scale back upstream gas operations


Gas retailer AGL Energy Ltd., Sydney, says it will exit the oil business and massively scaling back its upstream gas operations.

Woodside lets contracts for Browse LNG project

07/06/2015 Woodside Petroleum Ltd. has let more contracts for the Browse floating LNG project offshore Western Australia. The contracts, awarded to a Technip-...

Macondo settlement seen ‘positive’ for BP

07/06/2015 BP Exploration & Production Inc.’s recent agreement to settle federal and state claims related to the 2010 Macondo blowout and spill improves t...

Court to EPA: Costs matter

07/06/2015 Oil and gas groups did not respond immediately when the US Supreme Court ruled on June 29 that the US Environmental Protection Agency acted unreaso...
White Papers

Definitive Guide to Cybersecurity for the Oil & Gas Industry

In the Oil and Gas industry, there is no single adversary and no single threat to the information tech...

UAS Integration for Infrastructure: More than Just Flying

Oil and gas companies recognize the benefits that the use of drones or unmanned aerial systems (UAS) c...

Solutions to Financial Distress Resulting from a Weak Oil and Gas Price Environment

The oil and gas industry is in the midst of a prolonged worldwide downturn in commodity prices. While ...
Sponsored by

2015 Global Engineering Information Management Solutions Competitive Strategy Innovation and Leadership Award

The Frost & Sullivan Best Practices Awards recognise companies in a variety of regional and global...
Sponsored by

Three Tips to Improve Safety in the Oil Field

Working oil fields will always be tough work with inherent risks. There’s no getting around that. Ther...
Sponsored by

Pipeline Integrity: Best Practices to Prevent, Detect, and Mitigate Commodity Releases

Commodity releases can have catastrophic consequences, so ensuring pipeline integrity is crucial for p...
Sponsored by

AVEVA’s Digital Asset Approach - Defining a new era of collaboration in capital projects and asset operations

There is constant, intensive change in the capital projects and asset life cycle management. New chall...
Sponsored by

Transforming the Oil and Gas Industry with EPPM

With budgets in the billions, timelines spanning years, and life cycles extending over decades, oil an...
Sponsored by
Available Webcasts

Better Data, Better Analytics, Better Decisions

When Tue, Oct 27, 2015

The Oil & Gas industry has large amounts of data stored in multiple systems which are purpose built for certain tasks. However, good decisions require insights based upon the data in all of these systems. These systems in turn do not talk to each other. So the process of analyzing data, gaining insights, and making decisions is a slow one and often a flawed one. Good decisions require accurate analytics and accurate analytics require superior/sustainable data quality and governance. This webinar focuses on:

  • The importance of data quality and governance
  • How technological advances are making data quality and governance sustainable in order to get the accurate analytics to make solid decisions.

Please join us for this webcast sponsored by Seven Lakes Technologies and Noah Consulting.


Operating a Sustainable Oil & Gas Supply Chain in North America

When Tue, Oct 20, 2015

Short lead times and unpredictable conditions in the Oil & Gas industry can create costly challenges in supply chains. By implementing a LEAN culture of continuous improvement you can eliminate waste, increase productivity and gain end-to-end visibility leading to a sustainable and well-oiled supply chain.

Please join us for this webcast sponsored by Ryder System, Inc.


On Demand

Leveraging technology to improve safety & reliability

Tue, Sep 22, 2015

Attend this informative webinar to learn more about how to leverage technology to meet the new OSHA standards and protect your employees from the hazards of arc flash explosions.


The Resilient Oilfield in the Internet of Things World

Tue, Sep 22, 2015

As we hear about the hype surrounding the Internet of Things, the oil and gas industry is questioning what is different than what is already being done. What is new?  Using sensors and connecting devices is nothing new to our mode of business and in many ways the industry exemplifies many principles of an industrial internet of things. How does the Internet of Things impact the oil and gas industry?

Prolific instrumentation and automation digitized the industry and has changed the approach to business models calling for a systems led approach.  Resilient Systems have the ability to adapt to changing circumstances while maintaining their central purpose.  A resilient system, such as Maximo, allows an asset intensive organization to leverage connected devices by merging real-time asset information with other critical asset information and using that information to create a more agile organization.  

Join this webcast, sponsored by IBM, to learn how about Internet of Things capabilities and resilient systems are impacting the landscape of the oil and gas industry.


Emerson Micro Motion Videos

Careers at TOTAL

Careers at TOTAL - Videos

More than 600 job openings are now online, watch videos and learn more!


Click Here to Watch

Other Oil & Gas Industry Jobs

Search More Job Listings >>
Stay Connected