The Senate's recent vote upholding the U.S. Environmental Protection Agency's ethanol mandate was a classic congressional struggle over energy policy.
After a long, testy debate, the Senate deadlocked 50-50 on an amendment by Sen. Bennett Johnston (D-La.) to deny EPA funds to implement the mandate, which requires reformulated gasoline (RFG) to contain 30% oxygenates (OGJ, Aug. 8, Newsletter).
It was no accident that Vice President Al Gore, who under the Constitution is president of the Senate, was on hand to break the tie and table the amendment. The Clinton administration had lobbied hard to preserve the EPA rule.
PRO AND CON
The debate pitted farm state senators against oil state and consumer oriented northeastern senators.
Other than that, little was clear. Every fact or piece of data asserted by one side was challenged by the other.
Johnston argued that ethanol production uses more energy than it creates. He said the EPA rule would increase gasoline prices 26 cents/gal, create logistical problems for the oil industry, and carry no environmental benefit.
The Congressional Budget Office found the mandate would cost $249 million in subsidies during the next 5 years.
Johnston said the ethanol subsidy already has cost the government $4.6 billion in the past 10 years. "If it cannot compete with that, we should not force feed it down the throats of consumers."
Farm state senators argued tenaciously for the ethanol mandate and supplied bushels of endorsements from farm groups. They charged the oil industry opposes ethanol because it has a vested interest in methanol production.
Sen. Bob Kerrey (D-Neb.) noted the oil industry was opposing aid for farmers at the same time it is seeking tax credits for its stripper and deepwater offshore production.
It appeared major environmental groups would fight the ethanol mandate, but Friends of the Earth, Sierra Club, National Wildlife Federation, and Natural Resources Defense Council just couldn't align themselves with Big Oil.
Those groups finally cosigned a letter saying they oppose setting government policies through denial of appropriations "regardless of the substantive merits of such amendments."
Farm state senators were so happy about that letter they inserted it five times in the Congressional Record.
Another disappointment for oil lobbyists was the fact that a couple of months ago 48 senators sent EPA a joint letter and three others sent separate letters opposing the ethanol mandate. Somewhere along the line, a critical vote was lost.
Industry's last hope is its federal court lawsuit challenging the rule (OGJ, July 11, p. 75).
ANOTHER ISSUE
The Senate bill did contain one provision denying EPA the funds to implement one of its rules.
The appropriations committee had inserted a provision blocking a proposed rule designed to assist Venezuelan gasoline imports under the RFG program (OGJ, May 30, p. 30). A bill passed by the House is silent on the point, so a House-Senate conference committee will decide the issue this fall.
Copyright 1994 Oil & Gas Journal. All Rights Reserved.
