Lawmakers, industry sound national security theme as energy bill debate heats up

Sept. 25, 2002
A key US congressional lawmaker pledged to industry leaders Sept. 24 that Congress would pass "a good bill, perhaps even a great bill" this year emphasizing national security and economic stability.

By the OGJ Editors

WASHINGTON, DC, Sept. 24 -- A key US congressional lawmaker pledged to industry leaders Sept. 24 that Congress would pass "a good bill, perhaps even a great bill" this year emphasizing national security and economic stability.
House Energy and Commerce Chairman Billy Tauzin (R-La.), the manager of a pending energy bill before Congress, acknowledged that consensus will be difficult on key issues such as leasing in Alaska's Arctic National Wildlife Refuge, climate change provisions. and clean fuel standards.
Senate leaders say that they will not accept any final energy bill that includes an ANWR leasing plan.

"I think there's strong support for climate change (in the Senate provisions) and strong opposition to ANWR—that's the Senate position," Tauzin's counterpart, Jeff Bingaman (D-NM), chairman of the Senate Energy Committee, told reporters after addressing a US Chamber of Commerce energy forum.
But Tauzin insisted there is room for compromise on those and other issues. He insisted that a final bill is obtainable and suggested that even the highly controversial ANWR provision in the House may be acceptable to the Senate under the right conditions.
In a playful reference to a famous scene in the movie "The Godfather," Tauzin joked: "We're going to make the Senate an offer they can't refuse. There's going to be a horse's head in somebody's bed."

Despite that aside, Tauzin sought to strike a conciliatory tone, saying that "everything is on the table" and that "I know I have to give; I know I have to compromise, and the Senate does too, for the sake of the country."
Tauzin said that opening ANWR would not dramatically reduce US reliance on foreign oil, but said it is "a good start" toward shifting supply patterns away from the crisis-torn Middle East.
"It won't break the dependence, but it will give us just one little measure and just help us with the future that much more," he said.

Tauzin said he hoped that any final bill would help encourage energy supplies from within the US as well as encouraging supplies from friendly allies such as Canada. He conceded, however, that there are portions of the bill that the Canadian government objects to—namely, a provision that encourages the construction of an Alaskan North Slope gas pipeline via a "southern" route along the Alaskan Highway. Canadian politicians are also unhappy with a pending plan, still to be voted on, that would provide loan guarantees and a gas floor price to encourage the pipeline's construction.
Tauzin said he is aware of their concerns and is still considering options to address that issue.

No deal breakers
Tauzin also refused to speculate on what the White House might or might not accept in a final bill. The Louisiana lawmaker rejected the notion that the White House would summarily reject a bill that does not include an ANWR leasing provision.
President George W. Bush's administration meanwhile, has been sending mixed signals. Interior Sec. Gale Norton recently indicated that she would recommend that Bush veto a bill that does not include ANWR leasing. But Energy Sec. Spencer Abraham, although voicing support for ANWR leasing, has not signaled what provisions he thinks might lead the White House to reject the bill.

On tax issues, the White House's Office of Management and Budget Director Mitch Daniels has been a critic of both the House and Senate energy tax titles, which carry respective price tags of $30 billion and $16 billion over a 10-year period. But the author of the House tax provision, Bill Thomas (R-Calif.), chairman of the House Appropriations Committee, said in the summer that the White House gave its blessing for his provisions.
The tax title, as with ANWR and clean fuel provisions dealing with ethanol fuels, will likely be decided at the end of the energy conference, lawmakers predict.

More discussions on the bill are expected this week, with a focus on electricity restructuring and possibly a preliminary discussion on a Senate provision that essentially mandates a 5 billion gal/year fuel ethanol market by 2012. House lawmakers are said to be considering a measure that would extend that timeline and possibly offer the clean fuel additive methyl tertiary butyl ether the same kind of product liability productions now specified in the Senate bill (OGJ Online, Sept. 18, 2002).

Industry views
Energy trade associations and related business interests also weighed in on the energy bill discussions, saying lawmakers need to pass a bill to help reengage the sputtering US economy and keep US interests secure.
"If certain legislative and regulatory conditions are met, and natural gas use increases 50-60% by 2020, we could reduce oil imports by some 4 million bo/d and reduce emissions of carbon dioxide by 930 million tons/year," said American Gas Association Chairman William Michael Warren. Warren is also chairman, president, and CEO of Energen Corp. in Birmingham, Ala.
To counter the trend toward increased oil imports from volatile areas, Warren said US energy policies should promote increased production, delivery, and use of natural gas—adding that almost all of which US consumers use is produced in the US (84%) and Canada (15%).

He noted that natural gas producers need access to new supplies to meet increased demand.
"Innovative exploration and production technologies alone won't be able to produce enough new natural gas to keep up with demand. No matter how many ways you improve a drinking straw, if you keep sticking that straw into the same milkshake, at some point the glass is going to be empty. The same is true of existing natural gas and oil fields. At some point, we will need to explore new ones, and that day is coming sooner rather than later," he cautioned.