US House narrowly passes bill on refining, pipelines

Nick Snow
Washington Correspondent

WASHINGTON, DC, Oct. 10 -- The US House of Representatives passed the Energy and Commerce Committee's refining and pipeline bill Oct. 7 by a two-vote margin (OGJ Online, Oct. 4, 2005). But as members headed to their home districts for a week-long Columbus Day recess, it was still not clear how much effect the measure will have.

Proponents said HR 3893, the Gasoline for America's Security Act, would reform cumbersome siting procedures by requiring the Department of Energy to coordinate refinery permitting—but only if a state's governor requests the process or if the US president designates the site as potentially suitable for a refinery.

"In 1981, there were 324 operating refineries in the boundaries of the United States. Today there are 148. Do the math. There are a lot of reasons for it, but one of the reasons is the law as it exists today," said Energy and Commerce Committee Chairman Joe Barton (R-Tex.). "What company's board of directors in its right mind would want to go through this complicated process and tie up billions of dollars for years and years if they weren't certain whether this process would wrap up in a timely fashion?"

The bill did not include a provision addressing the New Source Review (NSR) permitting program under the 1977 Clean Air Act amendments. Electric utilities, as well as oil refiners, had sought reforms to clarify the process.

"Initially, we took the administration policy and put it in the bill just to clarify and give certainty to the industry on what they could and couldn't do," Barton said. "But I have agreed to do hearings in committee, and go through the regular process, and bring it to the floor later this year as a stand-alone bill or as a part of another piece of legislation."

NPRA response
National Petrochemical and Refiners Association Pres. Bob Slaughter said he was disappointed that the NSR provisions had been removed.

"We realize that the expedited schedule of this legislation did not leave time for adequate discussion of this crucial and complex language," he said in a statement following the bill's passage. "Nevertheless, we believe that the NSR reform effort retains wide majority support on Capitol Hill."

He did not address a provision that would require the president to designate sites on federal land, including at least three closed military installations, as possibly appropriate for refineries or that would allow the president to permit operation of refineries to manufacture oil products for the armed forces.

Slaughter also did not comment on a provision that would require the Environmental Protection Agency administrator to identify six gasoline and diesel formulations for a federal fuels list, reducing the number from its current level of 17.

He did call the bill "essentially a policy statement that increased petroleum product supplies and more domestic refining capacity are in the public interest and should be encouraged, rather than discouraged."

Slaughter said the House's passage of the bill "marks another stage of progress in America's growing realization that improvements in the nation's energy infrastructure and increased supplies of domestically produced gasoline, diesel, jet fuel, and home heating oil are a crucial element in maintaining the nation's global leadership and economic security."

Other parts of the bill would try to reform siting and construction procedures for pipelines and expansions and encourage prompt construction of a natural gas pipeline from Alaska to the Lower 48 states. The Alaskan pipeline provision includes a loan guarantee sunset provision if the state of Alaska and participants don't reach an agreement on constructing the system within 2 years of enactment.

The bill also would require the US energy secretary to study whether essential crude oil and product pipelines have backup power to continue operating if their regular sources are cut off. It also would give the Federal Energy Regulatory Commission authority to regulate gas gathering lines on the Outer Continental Shelf.

A provision that would have lifted offshore moratoriums and withdrawals for natural gas had been moved into the bill from a measure passed a week earlier by the Resources Committee (OGJ Online, Sept. 29, 2005). It was deleted during floor action.

Democrats critical
Resources Committee Democrats reiterated their charges that the bill was hastily conceived and moved to the floor without adequate consideration of the issues. "We have had no hearings on the specific measures before us; in fact, major changes in language were revealed late last night," ranking minority member John D. Dingell of Michigan said as debate got under way. "We have not received a single response to questions we asked of the Department of Energy and the Environmental Protection Agency. We do not know whether the provisions in the energy bill passed less than 2 months ago to expedite refinery siting are working. We do not know what these new provisions on refinery siting will do."

Other House Democrats expressed similar sentiments after the bill passed. "Sadly, in a display of total incompetence, the Republican leadership in the House barely passed another bill today that will do nothing to improve America's energy independence," declared Rep. George Miller (D-Calif.). "Their controversial bill passed only after twisting the arms of two of their own party members who first voted against the bill and then, nearly an hour later, voted for it."

Miller added, "This bill, and the process by which it passed, is a disgrace."

Twelve Republicans and independent Bernie Sanders from Vermont joined Democrats in voting against the bill. As the week-long break began, it was not certain how the Senate would respond, although the Energy and Natural Resources Committee has scheduled a full hearing for Oct. 18 on the winter fuels outlook.

Barton said that the House Energy and Commerce Committee would hold hearings after the recess to examine infrastructure needs in the wake of Hurricanes Katrina and Rita.

Contact Nick Snow at nsnow@cox.net.

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