US Senate leaders said congressional negotiators might resolve longstanding differences over a pending energy bill and pass legislation this year.
Senate Majority Leader Tom Daschle, (D-SD) and Minority Leader Trent Lott (R-Miss.) told reporters in separate meetings Oct. 8 that it is too soon to consider the measure dead, despite an apparent deadlock between the House and Senate over controversial portions of the bill, including leasing in the Arctic National Wildlife Refuge, climate change, and electricity restructuring.
"I would like to see an energy bill. I don't think there's any question," Daschle said.
To break the impasse, lawmakers are working with the White House on the possibility of more-modest legislation that does not include highly controversial items such as ANWR leasing, which the Senate refuses to accept, or climate change provisions, which the House opposes with the same vigor.
"The question then is, `Is there still enough policy there to salvage an energy bill?,' and I would say that there still is," Daschle said.
Before a meeting with energy bill negotiators, Lott also indicated that a bill still might pass this year, saying he is "an incurable optimist."
Meanwhile, Canadian officials have blasted the part of the US energy bill that mandates and supports a southern route for the proposed Alaskan North Slope (ANS) natural gas pipeline.
Scenarios
Industry lobbyists and congressional sources said one scenario seriously being considered involves passing a bill that includes an ethanol mandate plan, an energy tax incentive package with a $20 billion price tag over a 10-year period (including provisions designed to encourage domestic oil production from marginal wells), and pipeline safety.
It is uncertain whether a House plan to extend liability protection to producers of the oxygenate methyl tertiary butyl ether is considered too controversial for the Senate to accept.
Also unclear is whether Congress will include in any final bill provisions related to access to public lands. For example, lawmakers still must consider language on hydraulic fracturing. The Senate provision directs the Environmental Protection Agency to complete a study on the effects of hydraulic fracturing on underground drinking water sources. There are also various offshore and onshore lands access initiatives. These include a study of the impact of financial incentives on production, funding for the timely processing of leases and permits, exemption of production acreage from lease acreage caps, a coalbed methane study, subsalt lease suspensions, and potential expansion of royalty-in-kind programs.
And the fate of a plan to encourage construction of an ANS export gas line via a southern route along the Alaskan Highway also remains unclear. The proposal is not nearly as controversial as ANWR leasing or climate change policy, but its cost, perhaps $10 billion or more, is considered a potential obstacle. The Senate bill calls for loan guarantees and a price floor to spur industry interest in the line, which would be the largest US construction project ever.
Other views
At a gathering of energy economists in Vancouver, BC, last week Canadian politicians, academics, and industry leaders unanimously panned the pipeline proposal, saying it violated the spirit, if not the letter, of the North American Free Trade Agreement.
Canadian producers have complained that any price "floor" is a subsidy for North Slope producers.
"We take away our subsidy for northern gas only to have the US turn around and try to do it on their own," said Andre Plourde, associate professor of the University of Alberta and an officer of the International Association for Energy Economics. The group includes members from various governments, industry, and academia.
The group held its 22nd annual North American conference this week.
Some US economists attending the IAEE meeting in Vancouver were as critical of the US energy bill as were their Canadian counterparts.
They argued that a sweeping omnibus bill is by its nature difficult for politicians to reach consensus on, and this year even more so, given that the House is controlled by Republicans and the Senate by Democrats.
"Some would say it is fortunate we haven't had an energy bill in the past 10 years and are hoping there isn't one this time," said James Smith, professor of finance at Southern Methodist University. "An omnibus approach cannot foster clear and consistent public policy; it inevitably devolves into horse trading and subsidies," he said.
