By the OGJ Online Staff
WASHINGTON, DC, Aug. 2 -- Oil and gas industry groups were pleased Thursday with passage of the omnibus energy bill in the US House of Representatives.
The American Petroleum Institute said, "House approval of the comprehensive energy legislation without crippling amendments is a major step forward in shaping a national energy strategy addressing the energy problems facing our country.
"An effective national energy strategy that promotes adequate supplies while improving conservation and efficiency and safeguarding the environment is vital to continued US economic growth and America's quality of life."
A spokesman for the Independent Petroleum Association of America said his group was pleased that the House bill contained many of the tax reforms industry has sought for year. "That's a worthwhile first step in dealing with the capital formation problems industry faces if it is to meet growing natural gas demand."
He said the bill contains many lands access and royalty provisions directed toward independents, "all of which are good, important steps to try to deal with energy resource access on federal lands."
IPAA does not expect Senate energy bills to mirror the House legislation.
"We will have a more difficult time dealing with the tax issues in the Senate Finance Committee, where the budget process requires them to have financial offsets to balance the costs of new legislative provisions.
"From what we have seen so far they're going to be inclined to keep the costs down as much as they can. I don't know if we'll have initial success in the Senate getting as many of the tax provisions as we have had in the House."
The Senate Energy and Natural Resources Committee also will consider a public lands bill that is markedly different than the House measure.
The American Gas Association said, "With this vote, the House has taken a giant step toward boosting the economy and providing relief and protection to consumers by setting policies that reaffirm the need to provide a reliable, affordable supply of natural gas -- and other energies - through a modern infrastructure."
AGA said the bill would help expand the natural gas infrastructure by allowing pipelines and utilities a 10-year depreciation period for new infrastructure. And it requires a government study of existing rights-of-way on federal lands to determine if additional infrastructure can be supported within them.
It said the tax incentives in the bill would stimulate additional supply, such as credits to ensure production from existing marginal wells. It would fund research and development for gas technologies, including exploration and production in ultradeep water.
And it promotes more efficient use of natural gas and other energies, such as in alternative fuels vehicles.
The National Ocean Industries Association said, "The provisions of the bill that expand access to domestic resources and provide incentives for their production are especially vital in ensuring both the short and long-term stability of our energy supply and the sustained health of our national economy.
"Abundant and reliable domestic energy is a key component of our nation's economic vibrancy and competitiveness. This important energy bill will lay the foundations of a sound, forward-thinking national energy policy."
'Unbalanced response'
Environmental groups such as the Natural Resources Defense Council (NRDC) called the House energy bill a "grossly" unbalanced response to America's energy problems that will "threaten the environment and public health, rip off taxpayers by subsidizing the worst polluting energy industries, despoil public lands, and exacerbate global warming.
"This bill is a license to drill, burn and pollute," said Alyssondra Campaigne, NRDC's legislative director. "Overall it represents a craven capitulation to the auto, oil, coal, and nuclear industries at the expense of the environment and public health. Politics trumped science in the House today."
She particularly criticized $33.5 billion in subsidies, with 75% going to the coal, oil, gas and nuclear energy industries. Despite references to "energy efficiency" and "conservation," only a quarter of the bill's tax credits would go to promote greater efficiency or renewable energy sources, she said.
David M. Nemtzow, president of the Alliance to Save Energy, said the bill puts the Organization of Petroleum Exporting Countries back in the driver's seat. "This imbalanced energy policy bill does virtually nothing to make our gas-guzzling nation more energy efficient -- thereby guaranteeing us a future of even more imported oil, pollution, and high fuel bills. It's now up to the Senate to address what the House has so forcefully neglected," he said.
He criticized House members for squandering a vote on the most important energy efficiency measure to come before Congress since the 1980s, "an increase in the nation's fuel efficiency standards that would have reduced US oil consumption by up to 1 million b/d in 2010."