The White House has notified US House Speaker Nancy Pelosi (D-Calif.) that President George W. Bush would veto any energy bill that reduced instead of increased domestic production, raised taxes or used the tax code to single out specific industries, or imposed price controls that would bring back long gasoline lines reminiscent of the 1970s.
Advisors also would recommend that a bill be vetoed if it contained elements such as the so-called “NOPEC” provision, which encouraged retaliation against US businesses abroad, discouraged foreign investments in the US economy, and injured US relations with other countries, said Alan B. Hubbard, assistant to the president for economic policy and director of the National Economic Council, in an Oct. 15 letter to Pelosi.
Hubbard’s letter came as oil and gas industry association officials and others responded to Pelosi’s Oct. 11 announcement that she would use less-formal meetings between House and Senate Democrats to produce compromise energy legislation if a formal conference including Republicans did not appear possible.
“Every indication we see is that the Democratic leaders in the House and Senate plan to get together and try to cobble together an energy plan. We’re concerned that several members with oil and gas experience may be left out,” Mark Kibbee, a senior policy analyst at the American Petroleum Institute, said on Oct. 16.
He told OGJ that API and its members remain concerned about provisions in energy bills that passed the House and Senate earlier this year. Both contain language aimed at stopping alleged gasoline price gouging, for example. API has said that such provisions actually are indirect efforts to reintroduce price controls.
Punitive provisions
Kibbee said that other provisions would roll back incentives included in the Energy Policy Act of 2005 to assist the global competitiveness of US producers. “Some of the tax offsets were very punitive and would deter more domestic production,” he observed.
“We won’t be energy independent anytime soon. But taking away incentives doesn’t square with trying to improve energy security,” Kibbee said.
The Institute for Energy Research said on Oct. 16 that Pelosi, by refusing to review the bills in a bipartisan conference committee, is trying to avoid public scrutiny of legislation that will raise consumer energy prices and put domestic producers at a disadvantage.
IER economist Robert Murphy said past government attempts to regulate oil and gas prices failed. The US could expect more of the same if new energy legislation isn’t openly debated, he warned.
Ben Lieberman, senior policy analyst with the Heritage Foundation, characterized the bills that passed the House and Senate as “raising taxes on energies that work to subsidize energy sources that don’t work.”
Margo Thorning, senior vice-president and chief economist at the American Council of Capital Formation, said an ACCF study found that “if price controls like those being considered in legislative proposals earlier this year had been in effect during Hurricanes Katrina and Rita in 2005, losses to households and businesses would have totaled $1.9 billion.”
In Dallas, the leader of the Texas Alliance of Energy Producers said on Oct. 12 that Pelosi was trying to go around standard legislative procedures in an effort to pass energy legislation which does not have the necessary support.
“She is attempting to circumvent long-standing legislative procedures.... The leadership of both parties should be allowed to appoint their members to the conference committee and work out the differences between the energy bills passed by the House and the Senate,” said TAEP Chairman Frank King.
