WATCHING WASHINGTON ACTION ON OIL AND GAS ISSUES

With Patrick Crow Effervescent congratulations were traded in the Senate energy committee after it recently reported out National Energy Strategy legislation. The oil industry had reason to be pleased, too. The bill gives gas producers and pipelines some debottlenecking at the Federal Energy Regulatory Commission, improving the climate for gas sales. Independents won a provision requiring more oversight of Canadian gas imports.

June 3, 1991

3 min read

Effervescent congratulations were traded in the Senate energy committee after it recently reported out National Energy Strategy legislation.

The oil industry had reason to be pleased, too. The bill gives gas producers and pipelines some debottlenecking at the Federal Energy Regulatory Commission, improving the climate for gas sales.

Independents won a provision requiring more oversight of Canadian gas imports.

For majors, the bill would permit leasing of the Arctic National Wildlife Refuge Coastal Plain. It also rejected an oil import setaside that was akin to an oil import fee.

ENVIRONMENTALISTS UNHAPPY

Although the bill may have something for everyone in the oil and gas industry, environmentalists aren't happy.

When the measure goes to the Senate floor, probably this summer, environmentalists will press for exclusion of ANWR leasing and inclusion of a bill by Sen. Richard Bryan (D-Nev.) which sets tougher--the oil and auto industries say unrealistic--fuel economy standards for new cars.

In contrast to the Senate's haste, the House of Representatives is considering NES issues at a leisurely pace. The House energy and power subcommittee plans a few more hearings and may begin markups in July or September.

Deputy Energy Sec. Henson Moore sagely observes that the present Senate bill is the high water mark for NES legislation. In DOE's eyes, the journey through the Senate floor and through the House is likely to dilute or distort the bill into something much less appealing.

Because most energy issues are wrapped up in the NES, there has been no action on separate energy bills this session. None is likely unless the NES process crumbles.

Most of the action on energy issues this summer will be in the federal agencies. Foremost is the Environmental Protection Agency's effort to implement the Clean Air Act amendments passed late last year.

The oil industry is most concerned about the reformulated gasoline and oxygenated fuel requirements in that bill.

EPA has been using a new procedure, the regulatory negotiation ("neg-reg") process, to Write the rules. Neg-reg is seeking a consensus among the oil and auto industries, petroleum marketers, state and local governments, environmental and consumer groups, and EPA.

NO PROGRESS

The work has been split into four subgroups, but days and days of talks have produced very little that could be called negotiation. Oil industry representatives allege the environmentalists have adopted unrealistic positions and are trying to win in regulations things they could not win in legislation.

EPA plans to publish a notice of proposed rulemaking this month that will outline options and focus neg-reg negotiations on the key issues.

The Federal Energy Regulatory Commission has several key rulemakings pending.

It recently conducted a hearing to explore pipelines' role in the natural gas industry in the wake of open access transportation.

FERC also is grappling with pipeline rate design, amending its historic cost based ratemaking approach with a goal of shifting to a market based approach.