Congress walks away from energy reform bill this year

Maureen Lorenzetti
Washington Editor

WASHINGTON, DC, Nov. 14 -- Lawmakers late Wednesday killed a 2-year effort to pass comprehensive energy legislation.

"Senate Democratic and Republican conferees, after a joint meeting today, declared that efforts to pass an energy bill this year are ended," said Bill Wicker, a spokesman for the Senate Energy and Natural Resources Committee. "With the House expected to adjourn tomorrow, the odds were long, the time was short. Too short. "

Lawmakers earlier this week briefly considered a so-called "energy lite" proposal by the House that included pipeline safety and nuclear plant insurance, two major issues lawmakers agreed earlier this fall. But dozens of other pending proposals, including expanded drilling incentives, favorable tax treatments for construction of a new Alaska natural gas pipeline, updated clean fuel rules, and royalty reform measures will be now considered at an undetermined future date.

Pipeline safety passes
One exception to the gridlock was pipeline safety. That title passed Congress Thursday and President Bush is expected to sign the measure shortly.

But given the upcoming power shift this January, Congressional leaders and the White House made it clear that they preferred revisiting the larger energy reform bill next session.

"Time ran out, but the need for an energy bill has not," said Sen. Frank Murkowski (R-Alas.), a dogged supporter of expanded drilling in Alaska's Arctic National Wildlife Refuge, who will be leaving the Senate Dec. 2 to become governor of that state.

"I remain convinced that in very near future, Congress will not only produce an energy package but that it will allow for the safe exploration of ANWR. "

A House energy bill passed in August 2001 largely mirrored a White House energy blueprint published the previous May, although one key difference between President George W. Bush's plan and the Republican-led House was over energy tax incentives. The president's energy plan did not advocate new tax incentives, while the House bill called for about $8 billion over 10 years for domestic drilling. A Senate bill, passed in April 2002, included about $4 billion for domestic production over the same period. It included incentives for the construction of an Alaskan gas pipeline to the Lower 48 but did not address possible leasing on ANWR's coastal plain, as the House bill did.

Possible resurrection
Senate Republican leaders have pledged to resurrect an energy reform package as soon as January.

Democrats are less hopeful there will be enough interest to tackle the measure, especially given that lawmakers still must address long-delayed spending bills. Indeed, Murkowski's Democratic counterpart, Jeff Bingaman said that, barring a major crisis, Congress may lose interest in the subject.

"We missed an opportunity to do something good for the country," said Bingaman, the outgoing chairman of the Senate Energy Committee. "The political will to act did not match the rhetoric of the past 2 years on the need to address looming problems such as electricity reform, natural gas supply, and our increasing thirst for foreign oil for transportation. I think the task of coming up with a comprehensive approach to energy policy, absent a major crisis, will only grow more difficult in the next Congress."

Ethanol to fight another day
One high-profile casualty of failed energy deliberations was the push for clean fuels. Among the items under consideration: a phase-out of the clean fuel additive methyl tertiary butyl ether, an accompanying fuel ethanol mandate plan, and product liability protection for MTBE producers. Both supporters and opponents of the clean fuel title vowed to press the issue early next year with the new Congress.

Frank Maisano, spokesman of the Oxygenated Fuels Association, a group representing MTBE producers, said his group is hopeful that Congress will craft a more "balanced" motor fuel policy next year.

"Next year, starting from a clean slate, it is our hope that a more constructive approach to motor fuels policy can be undertaken. We will again work hard to achieve that result," he said.

OFA warned that the "ill-conceived effort to ban MTBE would have resulted in potential fuel shortages in our nation's largest cities. Further, the size of the ethanol mandate proposed by the Senate could well have undermined important energy and environmental objectives to the detriment of the nation as a whole."

Supporters of the clean fuel plan offered a different view.

"The fuels agreement and ethanol continue to enjoy strong bipartisan, bicameral support. Further, the need to address water-polluting MTBE, the inflexibility of the oxygen standard, and (efforts) to promote renewable fuels will not go away; it will only intensify," said Bob Dinneen, president of the Renewable Fuels Association, which represents ethanol producers. "We will continue to work with leaders from both parties and both houses of Congress to pass the fuels agreement, either as a part of an energy bill or on its own, as early as possible next year. We feel strongly that pending MTBE bans in the Northeast will compel a quick resolution to this issue in the 108th Congress."

Other reaction
Meanwhile independent producers said they "remained encouraged" by the attention paid to energy issues this year and predicted an even more intense effort to pass a bill when the next Congress convenes in January.

"The 107th Congress tackled and debated energy issues like no other Congress in recent years," said Independent Petroleum Association of America Chairman Diemer True. "It deserves credit for focusing attention on the need to reduce foreign oil imports and to encourage domestic oil and natural gas production.
"The next Congress is well poised to pass comprehensive energy legislation that will provide small and large oil and natural gas producers with the tools they need to supply the nation with reliable, affordable energy." True is a partner with True Oil Co., Casper, Wyo.

IPAA pushed for comprehensive energy legislation that included the following provisions: more access to federal lands; tax and royalty reforms to encourage domestic production; and new federal regulation assessments that IPAA maintains will lead to environmental safeguards without burdening the industry or government.

Sounding a similar note was the Interstate Oil and Gas Compact Commission.
"America needs a meaningful energy policy, now more than ever," said Arkansas Gov. Mike Huckabee, 2002 IOGCC chairman. "The Bush Administration's energy policy plan remains viable and balanced, and I hope Congress will revisit this issue next year."
The group, which represents oil and gas producing states, said future US oil and natural gas policy should be designed to minimize the loss of domestic resources, protect the environment, enhance economic development, safeguard national security and lessen dependence on foreign sources of petroleum.

Huckabee warned that policy makers could not afford to let energy issues "languish".
"We do not have the luxury of burying our heads in the sand over energy policy," Huckabee said. "America is 60% dependent on foreign oil, and here we are on the verge of war in the Middle East.
"If we're not going to get serious about energy policy now, then when?"