The White House is playing a more active role in US energy bill discussions due to deep disagreements between US House and Senate tax writers over energy incentives for ethanol, congressional sources said. Also still in contention is a controversial House proposal that would extend a smog compliance deadline under federal clean air rules for some cities.
Government and industry sources said President George W. Bush's administration and congressional leaders are meeting daily to finalize remaining sticking points. Similarly, the president in recent public statements has sought to step up the political pressure by calling on Congress to deliver a comprehensive energy bill to his desk this year.
Congressional Republican leaders in charge of the bill on Oct. 24 delayed formal discussions on the package that had been scheduled for Oct. 28. At presstime last week, congressional sources expressed hopes that an impasse would be broken by early November.
Deep disappointment
"I am deeply disappointed to announce that we must again delay the conference on the energy bill that was scheduled for this coming Tuesday," Senate Energy and Natural Resources Chairman Pete V. Domenici (R-NM) said Oct. 24. Domenici noted that the House and Senate leaders in charge of tax legislation, Sen. Grassley (R-Iowa), chairman of the Finance Committee, and Rep. Bill Thomas (R-Calif.), chairman of the House Ways and Means Committee, were at an "impasse" over how to reform the excise tax on ethanol. Also in dispute are whether tax credits to encourage alternative energy production should be tradable and whether tax laws should encourage the construction of new, cleaner coal-fired power plants and environmental upgrades to existing plants.
Domenici added that the House does not want to compromise on a pending plan to update reformulated gasoline rules by lifting the oxygenated fuel requirement while still encouraging ethanol production. The Senate version largely phases out methyl tertiary butyl ether; the House version allows for a phase-down but also gives producers limited liability protection not included in the Senate bill. Domenici criticized the House's refusal to budge on the "faulty product liability protection while continuing to oppose a reasonable phase-down."
Several states have banned MTBE because of groundwater concerns, and several lawsuits also are pending. Domenici also said the House also was still insisting on a number of proposals to amend the Clean Air Act, including one by Rep. Joe Barton (R-Tex.) that would give some cities more time to meet smog rules.
Domenici said he knew the issues on the table are contentious, but said he would not give up efforts to pass a bill.
"I certainly understand the House's position on these matters. But I am a pragmatist. I have no intention of emerging from conference with a bill that cannot pass the Senate. I remain committed to developing a final conference report that will be supported by majorities of both Democrats and Republicans in the Senate."
But he also indicated the political will may not be strong enough to pass out a bill this year.
"I know we will eventually resolve these issues and get an energy bill. I would like that to be sooner rather than later, but it may be that more pressure needs to build to force compromise. That will happen as many of the tax incentives expire, and the [US Federal Energy Regulatory Commission] continues to operate without clear, new statutory guidance.
"I have just been elected to a 6-year term. I plan to spend those 6 years as chairman of the Energy and Natural Resources Committee. I know we will get an energy bill. I will be patient, but how long should the country wait?" Domenici said.
House remains optimistic
Meanwhile, Domenici's counterpart in the House, Energy and Commerce Chairman Billy Tauzin (R-La.), downplayed the disagreements between the two chambers.
"No one said this was going to be an easy process, but the sky is not falling, and I remain convinced that Congress will deliver a comprehensive national energy bill this year. For weeks, all parties have been negotiating around the clock in good faith. This latest setback is a speed bump, not a roadblock. Just as football has a bye week, this is a time for all of us to regroup and refocus on the important task at hand."
A few days after that announcement Rep. Joe Barton (R-Tex.), who oversees an Energy and Commerce subcommittee, was equally optimistic. He told a financial conference sponsored by Schwab Capital Markets LP he expects the bill to be passed this month.
He also indicated that a tentative deal had been struck regarding US assistance from a $20 billion proposed Alaska natural gas export pipeline to the Lower 48. He predicted the package would not include a controversial price floor for North Slope producers but would provide some loan guarantees and related incentives.
Industry and congressional sources said the pending package would provide loan guarantees for the portion of the 3,500 mile pipeline built in Alaska. It also would give pipeline owners accelerated depreciation on the asset to 7 years from 15 years, and extend a tax break to fuel produced from a related gas-to-liquids project.
