Conservationists, Bush Camp Appear Locked in Stalemate Over Energy Plan

For weeks, President Bush and Democratic leaders have framed the energy legislation pending in Congress this week as a form of homeland defense: a way to reduce America’s reliance on oil from the turbulent Middle East.

But now, the Senate appears poised to reject the principal ideas of each side for maximizing America’s energy independence.

In a form of mutually assured destruction, the central proposals for increasing both domestic energy production and conservation look doomed. Environmentalists appear to have the votes to prevent oil drilling in the Arctic National Wildlife Refuge, the top priority of the Bush administration and the energy industry. Meanwhile, the administration and the auto industry are in position to block mandated increases in automotive fuel economy, the top goal for the environmental movement and most Democrats.

The result, critics say, may be a bill that only tinkers around the margins of America’s energy problems--if a bill emerges from Congress at all.

“These are the two elephants in the legislation,” said William W. Martin, a former deputy Energy secretary in the Reagan administration and now chairman of a Washington consulting firm. “If any compromise results in having neither of them, then we don’t have much of a policy as far as the impact on oil imports.”

The standoff suggests that renewed national security concerns about foreign oil haven’t altered the dynamic that has largely frozen energy policy for more than a decade: Neither the environmental movement nor the oil and auto industries appear strong enough to move their priorities past the other.

Indeed, when Congress last tried to craft a comprehensive energy policy, passage of the measure in 1992 came only after the provisions to increase auto fuel efficiency and drill in the Arctic were removed.

The same could happen in the days ahead.

Privately, senior administration officials acknowledge they are well short of the 60 Senate votes they would need to break a filibuster against Bush’s effort to open a portion of the Arctic refuge to oil drilling. Sens. John F. Kerry (D-Mass) and Joseph I. Lieberman (D-Conn.), both of whom are exploring a run for the 2004 Democratic presidential nomination, have pledged to filibuster any provision to open ANWR to drilling.

The administration “is a long way from having the votes to [break] a filibuster on ANWR,” said former Sen. J. Bennett Johnston (D-La.), now an energy lobbyist.

Tougher Fuel Economy Standards Resisted

The prospects for increasing fuel economy requirements--known formally as CAFE, or corporate average fuel economy standards--don’t look much brighter.

Last week, Kerry and Sen. John McCain (R-Ariz.) reached agreement on a bipartisan proposal that would require cars, SUVs and light trucks combined to meet a fuel economy average of 36 miles per gallon by 2015. That would be a 50% increase from today, when the vehicles combined average 24 mpg.

The administration, the United Auto Workers and especially the auto industry are all vigorously opposing that proposal. All argue that it would lead to less powerful, less safe vehicles and threaten U.S. auto jobs.

Kerry continues to work on potential compromises. He’s trying, for instance, to win the votes of farm-state lawmakers by amending the bill to exclude full-size pickup trucks used for work from tougher fuel economy standards. And new radio ads featuring actor Robert Redford start today in six states urging key senators to support the new standards. But with the auto industry pummeling the CAFE increase in ads targeted at swing senators--and Sens. Carl Levin (D-Mich.) and Christopher S. Bond (R-Mo.) pushing an alternative that would leave the setting of standards to the Transportation Department--even supporters are pessimistic about their prospects of pushing a mandated increase through the Senate.

“The auto industry has the upper hand,” acknowledged Dan Becker, director of the global warming and energy program at the Sierra Club.

Although the oil industry and environmentalists each dispute the other’s numbers, most experts agree that the Arctic refuge and fuel economy provisions would have a greater impact on limiting U.S. use of foreign oil than other aspects of the legislation.

Proponents say the Kerry-McCain proposal could save as much as 1 million barrels a day in 2015, 2 million a day in 2020 and 2.8 million a day in 2025. The oil industry projects that drilling in ANWR could ultimately yield 6 billion to 16 billion barrels of oil.

Together, these two measures could put a significant dent in America’s growing dependence on foreign oil. During the debate, senators have flashed photos of Iraqi leader Saddam Hussein--from whose country the United States imports oil--to underscore the national security implications of energy policy.

Several lawmakers also have noted that during the 1973 Arab oil embargo, the U.S. imported 36% of its oil; it now imports 56%.

Imports are likely to increase from about 10 million barrels a day now to 15 million barrels in 2010, experts say. Between them, the Arctic drilling and fuel economy standards would probably eliminate about half of the projected increase, Martin said.

Tax Credits Proffered to Encourage Conservation

The Senate bill has other provisions that would reduce dependence on foreign oil. The measure contains $16 billion in tax credits to encourage conservation and domestic production; it would also seek to accelerate development of alternative fuels by requiring both the federal government and private utilities to purchase an increasing share of their electricity from such supplies over the next 20 years. Few, though, are projecting vast short-term impact from those proposals.

“Any bill that avoids both [expanded] drilling in the United States and enhanced car technology is a bill that will be extremely ineffective in reducing the growth in our dependence on the Middle East” for oil, said Amy Myers Jaffe, an energy expert at Rice University in Houston.

If the ANWR proposal and new fuel economy standards are each eliminated, the political question for both Republicans and Democrats may be whether there are sufficient remaining inducements to reach agreement on a final bill that could win Bush’s signature.

Privately, the White House has made clear it wants the Senate to pass a bill, virtually no matter what it contains.

Such passage would move the measure along to a conference with the House, which last year passed an energy bill that authorized drilling in ANWR but proposed only a negligible increase in the fuel economy standards. Presumably, a conference committee would tilt whatever the Senate produces at least somewhat in the House direction, which is closer to what Bush wants.

Precisely for that reason, Democrats face the more difficult calculation as the Senate debate continues.

Democratic leaders as of now are committed to passing a bill, even if the improved fuel economy standards are eliminated, aides say. But environmentalists are nervous about proceeding to a conference where Arctic drilling would be on the table--because it passed the House--and tougher CAFE rules would not, because it did not clear either chamber. Rather than face that prospect, environmentalists may pressure Senate Democrats to shelve the bill outright if the fuel economy standards are defeated.