The U.S. Senate will continue debate this week on an omnibus energy bill and could vote on whether to allow exploration on the Alaska National Wildlife Refuge Coastal Plain.
After taking up the energy bill the Senate approved 68 amendments, many of them concerning alternative fuel auto fleets. The amendments have not changed core elements of the bill.
The Senate rejected 57-39 an amendment by Sen. James Jeffords (R-Vt.) that would have required refiners and importers to sell "replacement and alternative fuels" equal to 10% of their gasoline sales by 2001 and 30% by 2010.
About 65 amendments still are pending, although many of them are likely to be withdrawn.
Sen. Frank Murkowski (R-Alas.) has the major pending amendment, which would permit ANWR exploration. The Senate scheduled 4 hr of debate on that issue this week.
Although the debate likely will be held, Murkowski may not press for a vote at the end of it. Aides said if the Senate approved ANWR drilling, opponents would filibuster the entire bill, and proponents lack the votes to block the filibuster.
A Murkowski aide said, "We're not sure if we are going to offer the amendment or not." He said Murkowski and Sen. Ted Stevens (R-Alas.) were polling constituents and state leaders to determine if now is the most advantageous time to press the issue and will decide later on whether to seek a vote.
The energy bill is designed to promote conservation, use of alternative fuels, and production of most forms of U.S. energy. It would promote use of natural gas and facilitate pipeline construction.
After the Senate rejected the energy bill last fall (OGJ, Nov. 11, 1991, p. 17) sponsors deleted provisions for ANWR drilling, Corporate Average Fuel Economy (CAFE), waste motor oil recycling, and upgrading of powerplants.
A similar bill before the House energy panel does not cover ANWR or CAFE.
ANWR VOTE?
Bennett Johnston (D-La.), Senate energy committee chairman, said there is "an excellent chance of a huge supply of oil" on ANWR and it should be drilled.
But Johnston said the Senate has spoken once on that issue and "ANWR drilling, as desirable as I think it is, cannot and will not pass this Senate."
He dropped CAFE because it would put an additional burden upon U.S. automakers which would be "absolutely unacceptable" in today's financial markets, considering competition with Japanese and other automakers.
Murkowski and Stevens argue ANWR also is an economic issue for the country.
Murkowski said, "Wharton Econometric Forecasting Associates studied the impact of developing ANWR and projected that by 2005 development could create 755,000 jobs in this country. These are jobs spread through every state in the nation-80,000 in California alone, 60,000 in Texas, 34,000 in Florida, and even 2,000 in tiny Delaware."
He said the Wharton study predicted developing ANWR would boost the gross national product by $50.4 billion, provide federal and state governments billions of dollars in taxes and royalties yearly, and help the trade deficit.
Murkowski read a Feb. 3 letter in which President Bush called ANWR "a critical component of my energy strategy."
Last fall administration officials said they would recommend a veto of an energy bill that did not contain ANWR drilling, but Deputy Chief of Staff Henson Moore recently said, "We will cross that bridge when we come to it."
AMENDMENTS
Jeffords said his amendment would help small refiners, force a $2/bbl drop in the price of imported oil, and lower gasoline prices or raise them only 2.5/gal in the worst case scenario. The amendment would allow a credit against the 10% requirement if refiners used stripper crude to produce gasoline.
Johnston noted stripper wells provide 10% of domestic oil supply so there would be little motivation for refiners to make alternative fuels.
He said the amendment could push stripper prices to $100/bbl. "The owners of that stripper oil would get rich, rich, rich-and not by producing more oil."
The American Petroleum Institute had threatened to oppose the entire energy bill if the Jeffords amendment were adopted.
API said, "It would substantially and unnecessarily increase energy costs to consumers, interfere with the efficient refining and distribution of gasoline, and impose costly economic burdens on the petroleum industry with no real benefits to anyone. It is the wrong approach for increasing fuel supplies and reducing U.S. dependency on foreign oil."
The Senate approved an amendment by Sen. Paul Wellstone (D Minn.) striking a provision in the bill that would have allowed members of the Federal Energy Regulatory Commission to discuss policy issues in private.
The Senate also removed a provision that would have shifted gas import approval powers from the Department of Energy to FERC and required the latter to "redress any anticompetitive impacts on domestic natural gas producers" from Canadian gas imports.
A pending FERC rulemaking would allow U.S. rates to be set similar to the Canadian method.
Senators approved an amendment to prevent bankruptcy courts from extinguishing the rights of farmout interest owners to existing production when their predecessor in title goes bankrupt.
And it approved an amendment helping Hawaiian refiners obtain oil from the Strategic Petroleum Reserve during a drawdown and giving their tankers expedited access to SPR loading docks.
Copyright 1992 Oil & Gas Journal. All Rights Reserved.
