US House passes energy legislation amid Republicans' protests

The US House of Representatives passed a pair of energy bills Aug. 4 that Democrats said would greatly accelerate energy efficiency and alternative development efforts.

Nick Snow
Washington Correspondent

WASHINGTON, DC, Aug. 6 -- The US House of Representatives passed a pair of energy bills Aug. 4 that Democrats said would greatly accelerate energy efficiency and alternative development efforts. Republicans charged that the measures are mislabeled because they would place additional limits on currently available resources, drive energy costs higher, and produce no new domestic supplies.

"Plainly put, the so-called energy bills before us tonight contain not a single watt of new energy—and worse, actually seek to lock away the scarce resources we have available right now," maintained Republican Whip Roy Blunt (Mo.).

HR 3221 passed by 241 to 172 votes and heads to conference with the Senate. A companion measure, HR 2776, which contains taxes and other revenue-raising actions to fund new energy initiatives, was passed by 221 to 189 votes separately and combined with the larger bill.

The administration immediately announced that senior advisers would recommend that President George W. Bush veto the legislation in its current form. US Energy Secretary Samuel W. Bodman said that it "actually will lead to less domestic oil and gas production and increase dependence on imported oil."

House Republicans indicated they have enough votes to sustain a veto. "… this bill isn't going anywhere," said Joe Barton (R-Tex.), the Energy Committee's ranking minority member, who added that he was not even sure there would be an attempt to conference the bill with the other body.

Floor debate was delayed by a day on Aug. 3 as Republicans protested the manner in which a vote to recommit the farm bill was handled the night before and technicians tried to repair a vote display system malfunction. Members returned ready to tackle the energy bills on Aug. 4.

Roan Plateau language
HR 3221 retained language that Colorado Democrats John Salazar and Mark Udall persuaded the Rules Committee to insert that would prohibit surface activity on the Roan Plateau near Grand Junction if the US Bureau of Land Management issues leases there. They said this was a compromise because it did not ban leasing entirely, but other members and oil and gas and consuming industry groups said it effectively would lock up 9 tcf of natural gas.

The bill also kept provisions that Udall promoted from HR 2337 that would impose new requirements for handling produced water, delay oil shale leasing authorized under the 2005 energy policy act, and expand surface land holders' rights in split-estate situations involving the federal government.

Also retained in the main bill were provisions requiring the US Minerals Management Service to conduct at least 550 oil and gas lease audits annually and requiring holders of Gulf of Mexico deepwater leases erroneously issued without price thresholds in 1998-99 to renegotiate terms or be barred from future lease sales.

The final bill also contained provisions from HR 2776 that would deny a general manufacturing tax deduction to oil and gas companies, move geological and geophysical cost amortization for certain major oil companies back to 7 from 5 years, and rewrite the foreign tax credit for US oil and gas companies.

As Democrats emphasized the bills' provisions dealing with alternatives and efficiency, Republicans said the measures would unfairly penalize traditional energy sources.

"There's a war going on against fossil fuels and I don't know why," said Ralph M. Hall (D-Tex.), chief minority member of the Science and Technology Committee. He said it makes no sense to punish the oil and gas industry, hinder the nuclear power industry, and refuse to develop clean coal. "We need to develop new technologies, but it's not going to happen next year or in 10 years."

Industry reactions
Oil and gas industry associations immediately condemned the legislation. The American Petroleum Institute called it "the wrong prescription for a secure energy future. It would discourage production of the energy Americans must have to maintain a thriving economy with strong job creation and improving living standards."

Independent Petroleum Association of America President Barry Russell said, "The House energy bill ignores the stark reality that by 2030, oil and gas are projected to account for more than 60% of America's total energy mix."

Independent Petroleum Association of Mountain States spokesman Jon Bargas added, "It's especially harmful to the thousands of small, independent energy producers who drill 90% of the wells in the US and produce 82% of the nation's natural gas."

National Petrochemical and Refiners Association Executive Vice-Pres. Charles T. Drevna warned, "These bills turn back the clock by raising taxes on America's oil and gas industry, imposing onerous fees and additional restrictions on domestic energy production, and threatening to halt domestic production by nullifying existing contracts. Such policies will drive energy production and petrochemical businesses overseas."

Contact Nick Snow at nsnow@cox.net.

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