Congress on Collision Course With Energy Issue

greenspun.com : LUSENET : Grassroots Information Coordination Center (GICC) : One Thread

Fair use for educational/research purposes only

Congress on Collision Course With Energy Issue

Capitol: A wide range of topics will be on the table as lawmakers warn of national crisis. Battles shape up as some push conservation, alternative fuels and others favor expanded drilling, nuclear power.

By RICHARD SIMON, Times Staff Writer

WASHINGTON--Within days, Congress will launch a debate that could lead to the most thorough overhaul of U.S. energy policy since the oil shortages and price spikes of the 1970s.

Spurred by California's power problems and lesser energy shocks in other parts of the country, lawmakers of both parties say momentum is growing to consider a wide range of legislative remedies. In the Senate, a key Republican is putting the final touches on a 250-page-plus omnibus bill that would promote new development of oil, natural gas, coal and nuclear power.

Democrats plan to counter with legislation that would put more emphasis on conservation, energy efficiency and alternative fuels such as solar and wind power.

Individual House and Senate members are weighing in with proposals of their own, from allowing West Coast states to regulate daylight saving time to boosting federal home energy assistance to low-income families. Some of the measures, especially President Bush's favorite energy initiative--opening up Alaska's Arctic National Wildlife Refuge to oil drilling--are already drawing opposition from environmentalists, many Democrats and even some Republicans. Proposals to offer tax incentives to encourage domestic oil and gas production are opposed by some taxpayer groups. For the first time in years, energy legislation is attracting as much attention on Capitol Hill as perennial show-stoppers such as tax cuts. "We're facing another energy crisis in this country, and we need to move quickly," said Rep. Billy Tauzin (R-La.), chairman of the House Energy and Commerce Committee.

"We've got to look at comprehensive energy policy," echoed Senate Minority Leader Tom Daschle (D-S.D.). "I think both parties are prepared to do that." And while it's not just about California anymore, the state has clearly become the poster child for the campaign to draft a new national energy strategy.

"California depended on 25% of its energy coming from outside of the state, and look at the pickle they got in," said Sen. Frank Murkowski (R-Alaska), chairman of the Energy and Natural Resources Committee. "We're 56% dependent on imported oil in this country. How much further does it have to go before our national energy security is at risk?" Murkowski is the principal author of the Senate GOP bill, which he plans to introduce in about a week. Although the White House is conducting its own energy policy review, Murkowski's measure will include many of the proposals that Bush pledged to pursue as a candidate: The bill would provide new tax incentives for domestic production of oil and natural gas. It would attempt to revive the nuclear power industry. The plan also boosts federal funding for "clean coal" technology. It would require a study of ways to speed up construction of pipelines and transmission lines. It would promote energy efficiency and the use of alternative fuels.

And, it would carry out Bush's most divisive energy initiative: allowing drilling for oil in the Arctic National Wildlife Refuge.

Murkowski's bill would not, however, provide immediate relief to California. With that in mind, a bipartisan group of California lawmakers is pushing legislation that would impose federal price controls on wholesale electricity. But price caps face strong opposition from the Bush administration, and the prospect of passage seems remote. Other consumer-friendly proposals are expected to fare better. In response to natural gas price spikes across the country, Congress is expected to act quickly to boost home heating and air-conditioning assistance for low-income families.

Murkowski said his National Security Energy Act seeks to reduce U.S. dependence on foreign oil to 50% of total supplies by 2010. During the 1973 Arab oil embargo, the United States imported 36% of its oil. It now imports 56%, including about 750,000 barrels a day from Saddam Hussein's Iraq. "We get his oil, put it in our airplanes and then go bomb him," Murkowski said.

Murkowski insists the bill would be balanced. It wouldn't give significant breaks to big oil companies, he said, but rather would extend help to the little guys whose low-output wells become uneconomical when prices drop below a certain level. Lee Fuller, vice president of government relations for the Independent Petroleum Assn. of America, said most of the tax incentives in the bill would help "small producers who are drilling 85% of the wells in this country and producing 65% of the natural gas."

High Expectations by Energy Industry Energy industry officials have good reason to have high expectations this year. Besides the energy scares in California and elsewhere, two ex-oilmen were just elected president and vice president. Bush has not only made energy a top priority, he already has appointed Vice President Dick Cheney to head a task force to develop a new national energy strategy. "For the first time, we're going to have these things focused on in the right manner," said Jerry Jordan, chairman of the petroleum association. In the House, pro-business lawmakers will play key roles in crafting energy legislation. They include Tauzin, the House energy panel chairman; Majority Whip Tom DeLay (R-Texas), who has been put in charge of coordinating energy legislation; Rep. Joe Barton (R-Texas), chairman of a subcommittee on energy and air quality; and Rep. Bill Thomas (R-Bakersfield), chairman of the House Ways and Means Committee.

The interest level reflects more than just committee posts. Natural gas price spikes and supply shortages recently forced six ammonia plants to shut down in Tauzin's home state, while Thomas likes to point out that Kern County in his district produces more oil than Oklahoma. In addition, the Republicans, who control both Congress and the White House for the first time in decades, raised more than $23 million from oil and gas interests for the recent campaigns, according to the Center for Responsive Politics.

Even so, passage of pro-industry legislation is not necessarily a slam dunk. "If you made me wager now whether there would be a comprehensive energy bill that makes it to the president's desk, I think you would get only even odds," said David Nemtzow, president of the Alliance to Save Energy, a coalition of business, consumer, government and environmental leaders. "The big question before the administration is, will they put forward a balanced energy proposal that has energy efficiency as one of its cornerstones . . . or will they make the mistake that's been made in the past and look at drilling and building as the only answers to our problem?" Still, environmentalists are worried. "We're facing a very difficult period to try to protect the public interest," said Daniel Lashof, senior scientist with the Natural Resources Defense Council. "The oil and the coal industry have a long wish list, and they have a sympathetic ear in both the chairman of the Senate Energy Committee and the vice president." Environmentalists characterize positive elements in the Murkowski bill as a "Trojan horse" designed to mask more controversial elements such as the Arctic drilling provision.

"We can't drill our way to energy independence," said Melinda Pierce, a Sierra Club lobbyist.

Taxpayer Groups Target Incentives Taxpayer groups are lining up to oppose many of the tax incentives and subsidies. Among their targets: a provision to have the federal government pay half the cost of installing clean-coal technology in power plants, and another to renew royalty payment relief to oil companies that drill deep-water wells in the Gulf of Mexico.

Cena Swisher, program director at Taxpayers for Common Sense, said the bill represents "21st century trickle-down economics. It gives billions of dollars to energy corporations, while taxpayers don't get anything." Lexi Shultz, staff attorney of the U.S. Public Interest Research Group, said the oil and gas industry already receives $1.2 billion to $2.6 billion a year in tax breaks, and it doesn't need any more. Sen. Jeff Bingaman (D-N.M.), the top Democrat on Murkowski's committee, cautioned against moving too quickly to approve tax incentives. "You've got the president releasing a $1.6-trillion tax cut bill and insisting that he doesn't want any additions to it. Now these are additions. Each one should be scrutinized."

Some of Murkowski's proposals enjoy bipartisan support. They include a $1-billion increase in home heating assistance for the poor, tax incentives for buying energy-saving appliances, and a $2-billion, 10-year program to make schools more energy efficient. California lawmakers, meanwhile, are drafting their own energy bills. Sen. Barbara Boxer (D-Calif.) has proposed a series of measures: a federal loan program that would help states create an electricity "reserve" to provide power during shortfalls, a tax on any "windfall profits" reaped by power generators, and tax credits for conservation measures such as new insulation and weather stripping.

Sen. Dianne Feinstein (D-Calif.) plans to push one of her pet causes: tougher fuel economy standards for sport utility vehicles, an action she said would save 1 million barrels of oil a day and reduce imports by roughly 10%.

Yet even the most aggressive reformers acknowledge that there are limits to what Congress can do, particularly as the West heads into the peak summer months with low reservoirs restricting the ability of hydroelectric plants to provide enough power.

As one utility official noted during a recent congressional hearing: "Not even Congress can make it rain."

http://www.latimes.com/cgi-bin/print.cgi

-- Martin Thompson (mthom1927@aol.com), February 19, 2001


Moderation questions? read the FAQ