Democrats Introduce ‘Balanced’ Energy Bill

Senate Democrats unveiled an energy bill on Wednesday that stresses conservation over production, calls for higher miles-per-gallon gasoline standards for sport-utility vehicles and eschews President Bush’s goal of opening up the Arctic National Wildlife Refuge to drilling.

The new measure is sharply different from the Bush-backed energy bill passed by the Republican-controlled House earlier this year, underscoring the tough task facing a divided Congress as it attempts to craft the most sweeping energy legislation in more than a decade.

Still, the bill’s unveiling signaled that energy policy, which lost steam after price shocks and supply shortages eased in California and elsewhere, is moving back to center stage on Capitol Hill.

The Senate is expected to take up the issue early next year.

Republicans have been attacking Senate Democrats for failing to act on one of Bush’s top domestic priorities--an issue that has taken on new importance because of the uncertainty over America’s next move in the Persian Gulf region. Senate Majority Leader Tom Daschle (D-S.D.) responded that he wanted his party to take time to craft what he termed a balanced energy bill.

Said Sen. Maria Cantwell (D-Wash.), a member of the Senate Energy Committee: “This legislation moves beyond the Republican energy policy of dig, drill and burn.”

At the White House, spokeswoman Claire Buchan said the administration had not seen details of the bill but was pleased that Senate Democratic leaders agreed that “we need to address energy independence.”

The GOP-backed House bill calls for opening up Alaska’s Arctic refuge to drilling and providing the oil, coal, gas and nuclear industries with billions of dollars in tax breaks and subsidies.

The Democratic bill would require that an additional 10% of the nation’s electricity come from renewable sources, such as solar and wind power, by 2020. Currently, about 2% of the nation’s electricity comes from renewable energy other than hydropower.

The greater emphasis on renewable energy, along with a yet-to-be-specified increase in fuel economy standards for SUVs, is designed to reduce emissions of greenhouse gases, which have been linked to global warming.

But Paul Georgia, environmental policy analyst for the Competitive Enterprise Institute, a conservative think tank, said the bill “follows the California policies of market interference, obstacles to increasing supply, and efficiency and renewable energy mandates, all of which contributed to the rolling blackouts.”

Environmentalists praised the Democratic bill as better than the House measure but still found shortcomings.

Philip E. Clapp, president of the National Environmental Trust, said the bill is “more notable for what it’s missing than for what it includes. Senate Democrats can’t pretend they’re doing anything about the nation’s energy security until they come up with a plan to increase auto fuel efficiency standards.”

A Senate panel will hold a hearing today on what is expected to lead to a recommendation in the coming weeks on how much the standards for average fuel economy should be boosted for SUVs. Some lawmakers have pushed to require SUVs to meet the 27.5 mpg standard required for cars. SUVs currently must meet a 20.7 mpg standard. But any significant increase in the standards is expected to face resistance from lawmakers--Democrats as well as Republicans--from vehicle-producing states.

The Democratic measure calls for greater efforts to increase drilling on public lands already open to oil and gas production. It also provides for up to $10 billion in federal loan guarantees to build a pipeline to ship Alaskan natural gas to the Lower 48 states.

The bill would increase within a decade the amount of renewable fuel, primarily ethanol, used in the nation’s gasoline supply from the current 2 billion gallons to 5 billion gallons.

This proposal could create controversy in California and several other states where officials are moving to phase out methyl tertiary butyl ether (MTBE), a gas additive credited with helping to reduce smog but blamed for polluting ground water. California officials have sought to avoid having to use ethanol, the only practical substitute for MTBE, contending it would increase prices at the pump.

Democratic aides said their party’s bill would give oil companies the flexibility to meet the standard. But Sen. Dianne Feinstein (D-Calif.) said she will talk with Daschle--who represents an ethanol-producing state--about lowering the ethanol mandate in California.

A spokesman for the American Petroleum Institute expressed concern that the bill would mandate the use of ethanol in gasoline in amounts that could cause supply disruptions while providing little, if any, reduction in crude oil imports. “Imposing such a large mandate would force ethanol’s use in areas where it is not economical or environmentally sensible,” said Juan R. Palomo.

The bill does have some common features with the House-approved measure, such as increasing energy assistance for low-income families and allowing solo drivers in alternative-fuel vehicles to use carpool lanes.

Ultimately, any energy legislation is likely to come down to how the Senate decides one issue: drilling in the Arctic refuge.

Republicans assert that they have the votes to open up the refuge to drilling. But Democrats have promised to filibuster, setting up a procedural hurdle difficult for Republicans to overcome. Republicans could use the same hurdle to block passage of an energy bill unless Democratic leaders allow a vote on drilling in the refuge.

“I hope that those who feel as strongly as they do about drilling in ANWR would not hold all of the energy policy hostage to that issue,” Daschle said.

The U.S. Geological Survey estimates that, at $20 per barrel, approximately 3.2 billion barrels of oil are economically recoverable from the coastal plain of the Arctic refuge. The current price of oil is $19 per barrel. This year, the United States will consume 7.2 billion barrels of oil, according to an Energy Department estimate.