The US House of Representatives Apr. 11 approved on a 247-175 vote a comprehensive energy bill largely similar to a proposal it passed in August 2001 that mainly follows the White House's domestic energy policy blueprint.
The Senate will resume consideration of its own energy plan when Congress returns from recess at month's end.
The House measure again includes a controversial plan to lease a portion of the coastal plain of the Arctic National Wildlife Refuge. The House bill also provides new royalty relief measures, updated clean fuel rules including an ethanol mandate plan, and wholesale electricity market restructuring (OGJ Online, Apr. 4, 2003).
Industry groups largely praised the bill because it emphasizes domestic production and streamlining permitting for public lands. And predictably, environmental groups uniformly denounced the House bill just like they did in 2001. They maintain the bill does little to improve energy efficiency and ignores clean air problems associated with burning fossil fuels.
Taxes appear to be the biggest difference between the August 2001 version and this new version. The old proposal contained more than $36 billion in energy tax measures over a 10-year period. This latest plan is scored at $18 billion with oil and gas provisions expected to cost $6-7 billion.
Although the White House has endorsed the House measure, the Office of Management and Budget told lawmakers in an Apr. 10 letter that it is concerned about the "significant and direct cost" of the tax provisions, which exceed President George W. Bush's budget requests. But most industry lobbyists do not expect those concerns to translate into a veto.
A pending Senate plan contains similar tax incentives and also includes fiscal incentives for an Alaskan natural gas export pipeline that the White House does not want in the budget.
The White House also wants to wait before expanding the 700 million bbl capacity Strategic Petroleum Reserve to 1 billion bbl, as recommended in the House bill.
"The administration recommends we analyze the optimal size of the SPR and review the results of this analysis with the Congress before determining whether further expansion of the SPR is warranted," OMB said.
NPRA reaction
The National Petrochemical & Refiners Association commended the progress made by both the US House and Senate committees' on their creation of what the NPRA termed "comprehensive national energy legislation."
"NPRA favors a supply-oriented approach that increases the supply of critical energy products available to American consumers," the association said. The additional supplies would "ensure our nation's continued economic growth and national security," it added.
NPRA noted that the House bill-being the more supply-oriented of the two bills—was more to its liking, however. But NPRA said that both bills "could better focus on the nation's energy supply needs."
It said, "The recent past has provided us with a vivid reminder of the tight supply-demand balance in petroleum product markets, including gasoline, diesel andUheating oil. Crude oil and petroleum product inventories remain at very low levels, meaning that refiners will have to work hard this summer to provide needed gasoline supplies while rebuilding inventories.
"Failing unforeseen problems, the refining industry will accomplish this task. But the US Energy Information Administration reminds us often that the US petroleum product supply- demand balance is so tight that there is little or no room for error if unforeseen problems arise.
"And key American industries, such as the petrochemical industry, face grievous competitive consequences if natural gas supplies do not increase. The petrochemical industry depends on natural gas and natural gas liquids as a key feedstock to produce the basic chemical products that are the building blocks for millions of products that are crucial to daily life, America's trade balance, and American jobs."
