No one disputes the need to take a hard look at how the US manages its energy needs.
The recent gasoline price spikes and blackouts in California have given lawmakers a unique opportunity to galvanize public opinion. And the omnibus energy package sponsored by Sens. Frank Murkowski (R-Alas.) and John Breaux (D-La.) seeks to address industry concerns from wellhead to burnertip (OGJ, Mar. 5, 2001, p. 40).
Yet the harsh reality, in the minds of some veteran policymakers, is that the Murkowski plan has too many controversial pieces-namely drilling on the coastal plain of the Arctic National Wildlife Refuge and a host of new tax incentives. At best, these elements will stall the 300-page-plus bill from becoming law this year and at worst cause so much bickering that it could reduce chances that any meaningful package gets passed.
Too much of a good thing?
Several congressmen have already threatened to block any bill with an ANWR drilling provision by stalling a vote through parliamentary maneuvers.
Meanwhile, most major oil companies privately concede that the long lead time involved with building the infrastructure to support ANWR, combined with the threat of eco-terrorism, makes it easy to walk away for the moment. That's especially true if the sanctions-adverse President George W. Bush allows US companies to reenter lucrative fields overseas, such as Iran's.
White House may soften edges
Industry may have another chance to refocus the debate when the White House releases its own energy blueprint. A draft is expected by the end of the month, with a final report due this April, according to Vice-Pres. Dick Cheney, who has spearheaded the project. President Bush also favors opening ANWR. But the White House has also been careful not to endorse major new tax incentives. In Mar. 5 testimony prepared for a House ways and means panel, US Treasury tax legislative counsel Joseph Mikrut noted that US producers, mainly independents, have available to them a total $9.8 billion in tax benefits over the next 5 years. It would be premature to assume that the Bush White House has shut the door on tax breaks, although for now it appears they are cautiously avoiding endorsing any kind of tax package that Democrats could seize on as "corporate welfare."
Common ground sought
A major focus of the Cheney report is expected to be seeking access to public lands in the Lower 48.
Another priority will be retooling the power and gas transportation permiting process so more transmission lines can be built. It's a major theme of the Murkowski bill as well. It also has the support of moderate Democrats such as New Mexico's Jeff Bingaman, making a compromise still possible.
The end result could be a plan that leaves industry reasonably happy, without a protracted battle. Working to meet new policy goals that increase domestic supply while encouraging environmental programs that reduce demand is an entirely realistic goal that can be reached between Congress and the administration before the heat of summer.
But Congress could be in for a long, hot season of discontent if lawmakers insist on keeping controversial provisions such as ANWR and big tax incentives in pending energy legislation.
