Collateral damage

Energy companies and federal policymakers are still coming to terms with the full impact of recent terrorist attacks on US soil.

Energy companies and federal policymakers are still coming to terms with the full impact of recent terrorist attacks on US soil.

Beyond the incalculable emotional toll, it will take weeks and possibly months before the government and industry can put a price tag on what happened Sept. 11. The key question now is: Will it happen again?

Intelligence experts say that, given a military response from the US is likely, there could be more terrorism against US interests, including critical infrastructure such as refineries and power grids.

For industry, this means issues once near the top of the White House's domestic agenda, such as revamping new source review, pipeline permitting, and low-sulfur diesel rules, are barely on the radar screen.

Those issues will not go away. Nor should they even be seriously neglected, given that industry needs answers from government before making key investments.

Still, those answers will be delayed in the near term. Even before the tragedy, the administration was still filling political appointments. The nomination process, always laborious because of exhaustive background checks, will now take even longer. Congress, however, won't stand in the way anymore. They want decisionmakers in government as much as the White House does.

Congressional outlook

Lawmakers quickly passed a $40 billion emergency spending measure that will help the country rebuild and be used for counterterrorism measures.

But beyond that, it is possible Capitol Hill, like the White House, may defer most domestic issues outside the annual budget process.

Lobbyists say the outlook for comprehensive energy legislation has grown increasingly muddled, because lawmakers are telling them they may not be able to stomach weeks of debate on a comprehensive bill this year (see related story, p. 29).

That doesn't mean Congress will abandon all energy-related issues before they leave this year. Some issues, such as fuel efficiency standards or leasing of the Arctic National Wildlife Refuge coastal plain, may be considered as part of a defense spending bill that funds the Department of Defense.

Agencies deployed

Meanwhile, the clean-up continues.

Every agency and branch of the US government has been mobilized.

The US Environmental Protection Agency, for example, is studying the ash from the explosions and fires resulting from the attacks to see if the pollution could have any long-term effects on health or the environment.

The Department of Energy held discussions with the Organization of Petroleum Exporting Countries to be assured that OPEC oil supplies will be reliable.

The Department of the Interior is reviewing and updating security measures on all public lands, including areas where oil and gas leases are held.

And the Federal Energy Regulatory Commission said pipeline and electric transmission companies could recover through higher rates money spent for security to safeguard the electric power grid and gas and oil pipelines.

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