Maureen Lorenzetti
OGJ Online
Sen. Jeff Bingaman (D-NM), a key lawmaker in the congressional debate on comprehensive energy legislation, says there is a good chance the Democratic-controlled Senate will follow the lead of the Republican-led House and pass an energy bill early this year.
"I'm optimistic that [Senate Majority Leader] Tom Daschle (D-SD) will bring an energy bill [to the floor] in February before we take the President's Day recess, and I am hopeful we can have a good debate, consider several amendments, and pass a bill through the Senate," Bingaman said in an interview.
The Senate Committee on Energy and Natural Resources chairman said his committee and others "carefully" will examine the collapse of energy marketer Enron Corp., although Bingaman does not anticipate the company's high-profile bankruptcy will overshadow his plans to advance a broader energy bill.
"We'll be looking at how the energy markets have operated, how they function, what oversight is required and appropriate, and what regulation is needed," Bingaman said.
Bingaman's counterpart in the House, Rep. Billy Tauzin (R-La.), the Committee on Energy and Commerce chairman, has held hearings on Enron and has not ruled out legislation addressing energy futures markets, something opposed by commodity exchanges like the New York Mercantile Exchange and the energy companies that rely on those markets to manage risk.
Lobbyists expect Bingaman, a moderate Democrat from an oil-producing state, would play a key role in brokering a compromise if Congress tightens regulation of energy markets.
He largely has agreed with the White House and lawmakers from other oil-producing states that Enron's troubles should not be an indictment of restructured energy markets in general.
For example, last November Bingaman told other Democrats not familiar with the energy business that several of Enron's competitors, all which had significant trading operations, quickly stepped in to handle customer demand after Enron's trading operations were halted. Electric, gas, and oil deliveries continued as scheduled and no supply disruptions occurred.
ANWR impasse
While Enron's troubles have dominated the headlines, larger energy policy questions will resurface when Congress takes up omnibus legislation this winter, Bingaman predicted.
The White House, congressional Republican leaders, and lawmakers from oil-producing states want to allow industry to lease part of the Arctic National Wildlife Refuge (ANWR) coastal plain. Their efforts have been successful in House, which has passed a broad energy policy reform bill that would permit ANWR leasing, but not in the Senate.
Senators who support the Alaskan exploration hope to frame ANWR access as a national security issue, in light of the US military action in Afghanistan.
Daschle and Bingaman introduced a Senate Democratic leadership bill (S 1766) on Dec. 5 but it does not have a provision to lease ANWR.
Since ANWR is such a controversial issue, its inclusion in legislation could stall or block an energy bill indefinitely, say some lawmakers who oppose drilling.
But Bingaman is less fatalistic about the process.
"We'll have to see how that plays out. The Alaska delegation would like to see ANWR opened to drilling, and of course we have others that oppose that effort. Each side has procedural options that could be considered."
The senator said despite the absence of ANWR, the legislation he and Daschle introduced "strikes a good balance" between energy conservation and supply measures (OGJ Online, Dec. 5, 2001).
And Bingaman and other Senate leaders dismiss Republican assertions that their party does not support a robust oil and gas industry.
The New Mexico senator pointed to several items unique to the Senate bill that could dramatically boost marginal well production.
Under Title 6 of the bill, 10 sections focus on domestic oil and gas production. And bill sponsors say many if not all of those proposals already have bipartisan support (OGJ Online, Dec. 5, 2001).
Other provisions
The Daschle-Bingaman bill would give the Interior Department's Bureau of Land Management more personnel to review and issue environmental permits in a timely manner for onshore oil and gas leases.
"It's extremely important for oil and gas producers to get permits approved," Bingaman said. "And whether it's industry or whether it's land owners everyone seems to want BLM to be adequately staffed."
Another provision responds to consolidation in the domestic oil and gas industry. It excludes existing oil and gas leases from the limit on how many acres of federal leases that producers can hold in a state.
The bill also would copy at the federal level a successful Oklahoma program -- instituted by former Oklahoma Energy Sec. Michael Smith, who now is the Department of Energy's top fossil fuel official -- to address environmental problems caused by abandoned wells.
Also, the bill would have the National Academy of Sciences study how the hydraulic fracturing of wells might impact underground supplies of drinking water. Using the study, the Environmental Protection Agency would determine if regulation of hydraulic fracturing is needed.
The legislation would have the Interior Department administer an Outer Continental Shelf Energy Infrastructure Security Program. Under it, coastal states and their political subdivisions would receive federal funding to improve the protection of energy installations.
The bill would provide up to $10 billion in federal loan guarantees for a pipeline to move Alaska natural gas from Prudhoe Bay field to the Lower 48 states. It would provide an expedited federal review after private firms agree on a route.
Republican leaders have not been particularly enthusiastic about the pipeline. The House-passed bill only would allow expedited permitting. "The bill holds out the promise of fairly substantial government support," Bingaman told OGJ Online. "And I would hope that would be adequate incentive for companies that are considering construction of a pipeline."
Sponsoring companies are expected to meet with the White House and lawmakers this month on pending pipeline proposals.
Electric reform
Another difference between the House bill and the Democrats' Senate bill is that the latter that would give the Federal Energy Regulatory Commission a "roadmap" for deregulating wholesale electric markets.
Bingaman thinks Congress, with the support of the White House, will pass electricity reform legislation.
"There's a good chance we'll see it in a final bill," he said. "We think we are close to something being accepted."
His proposal would not give FERC jurisdiction over the siting of new electric transmission lines, a power now held by states. However, it does give FERC more authority in other regulatory areas. It would strengthen the agency's jurisdiction to include mergers of holding companies that own utilities, mergers of generation-only utilities, and acquisitions of natural gas companies by electric companies. It would repeal the Public Utility Holding Company Act, update the Public Utility Regulatory Policy Act, and expand federal authority to oversee consumer protections and reliability.
Bingaman's bill does not yet include tighter fuel efficiency standards for new automobiles. The Senate Committee on Commerce has held hearings on that issue and is expected to report legislation this winter that will be merged into Bingaman's bill.
Although environmental groups predict automakers will fight hard against tougher standards, Bingaman said, "We are optimistic about there being a good proposal for consideration. Clearly the Senate has to consider something on such an important issue."
Contact Maureen Lorenzetti@[email protected]
