House OKs Energy Bill; Critics Say Big Oil Wins

The House on Friday approved a major energy bill, handing President Bush a victory on a key domestic issue he has called critical to economic growth and national security.

Against the backdrop of a war that put the spotlight on U.S. oil imports from foreign sources, the 247-175 vote signaled the Republican-controlled Congress’ determination to complete the first overhaul of national energy policy in more than a decade.

“This bill is great for America,” said Rep. W.J. “Billy” Tauzin (R-La.), chairman of the House Energy and Commerce Committee and one of the bill’s authors. “During this time of war and energy instability, it is more critical than ever that we update our energy infrastructure to keep America safe and our power supply strong.”

Democrats complained that the bill, which includes $18 billion in tax breaks -- many of which would benefit the oil and gas industries -- is skewed too much toward promoting production over conservation.

“This is an oil company bill,” said Rep. Jim McDermott (D-Wash.). “It’s oil, oil, oil. It has a greasy feeling to it.”

The drive to pass the legislation, which gained momentum during California’s electricity crisis in 2000 and 2001 but sputtered as that and other energy-related problems eased, has returned to center stage on Capitol Hill.

Bush praised the House for passing a “balanced” bill, calling the vote “a major step forward in the effort to secure our nation’s energy future.”

“I look forward to prompt Senate action and to working to ensure that fiscally responsible legislation to reduce our reliance on foreign sources of energy can be brought to my desk,” Bush said.

The Senate could pass its version of energy legislation as early as next month, paving the way for talks expected to lead to a final bill that would be sent to Bush for his signature.

“It’s fairly likely that [an energy bill] will pass the Congress this session simply because politicians on both sides of the aisle and in both ideological camps want to be able to tell voters that they’ve done something to promote energy independence and environmentally friendly energy sources,” said Jerry Taylor, director of natural resource studies for the Cato Institute.

Taylor said he is skeptical that the bill will reduce U.S. dependence on foreign oil. “The bottom line is that we import oil from abroad because it’s cheaper than securing oil from within the United States,” he said.

The House bill contains many initiatives taken from an energy plan the Bush administration unveiled in the spring of 2001. These include authorizing $1.6 billion to develop technologies that would reduce pollution emitted by coal-fired power plants.

But the White House expressed concern about the bill’s $18 billion in tax breaks to spur more energy production and conservation -- a figure more than double the amount favored by the administration.

Also, Bush seems unlikely to achieve one of his most prized initiatives -- opening Alaska’s Arctic National Wildlife Refuge to oil and gas exploration. The House bill includes the drilling provision, but the Senate last month voted to strip it from a different bill. The proposal is widely seen as doomed for the year.

Nor is the bill’s final version expected to include new fuel economy standards for motor vehicles, a provision sought by many Democrats. The House on Thursday rejected a proposal to raise standards for all vehicles to 30 miles per gallon by 2010. Currently, fleets of light trucks -- including sport utility vehicles, minivans and pickups -- must meet an average of 20.7 miles per gallon, due to rise to 22.2 miles per gallon for the 2007 model year. The average for cars is 27.5 miles per gallon.

A main aim of the House bill is to reduce oil imports, which account for more than half of U.S. oil consumption, up from 36% during the 1973 Arab oil embargo. Lawmakers debating the bill this week made note of the 600,000 barrels a day imported from Iraq under the United Nations’ oil-for-food program.

“The war in Iraq has once again highlighted the importance of ensuring America’s energy independence,” said Rep. Doc Hastings (R-Wash.).

The 768-page bill includes a measure, popular in the politically important Midwest, to double the amount of corn-based ethanol that would have to be added to the nation’s gasoline supply by 2015. Ethanol advocates say the additive is a cleaner-burning, homegrown alternative to foreign oil.

The bill would enlarge the nation’s emergency stockpile of oil, and promote building a $20-billion pipeline to bring natural gas from Alaska to the Lower 48 states. Addressing problems brought to light by California’s electricity crisis, the bill would prohibit trading practices used by energy companies to drive up the price of power and would boost to $1 million the fine for violating federal laws governing power markets.

It also would extend a cap on the nuclear industry’s liability in accidents. And it would authorize nearly $32 billion for research, including $1.8 billion for Bush’s initiative to develop hydrogen-powered fuel-cell vehicles.

Those measures are on top of the $18 billion in tax breaks, which are designed, for example, to spur more drilling in the Gulf of Mexico and encourage home buyers to purchase energy-efficient dwellings.

The energy bill drew opposition from a wide range of groups.

David M. Nemtzow, president of the Alliance to Save Energy, a bipartisan coalition of business, consumer and environmental leaders, called the bill “one small step for efficiency, one giant leap for production.”

He said the bill does not include Bush’s call for tax credits to promote the purchase of gas and electric hybrid cars. The bill’s authors contended the credits were not necessary because consumers have been buying the cars.

Sport-fishing groups opposed a provision streamlining licensing for more than 500 hydroelectric plants. The critics contended that it could allow utilities to avoid installing “fish ladders” and other means to allow fish to pass around dams.

The National Hydropower Assn., however, said the bill would “bring significant reforms to the hydropower licensing process using a moderate and responsible approach.”

Some lawmakers objected to the ethanol mandate, saying it was unnecessary and could lead to price spikes at the gas pump.

Although California officials previously have expressed concern about the ethanol mandate, a state government spokesman said the bill was an improvement over existing federal law that could have forced the state to use 1 billion gallons of ethanol next year as a substitute for MTBE, a fuel additive being phased out in the state by the end of the year because it has been blamed for fouling water supplies.

Rep. Doug Ose (R-Sacramento) broke with the majority of his Republican colleagues and opposed the bill, citing the ethanol provision. “California consumers already pay the highest gas prices in the country, and the ethanol mandate will mean even higher gas prices at the pumps,” he said.

Ose was the only California Republican to vote against the bill. Among the state’s Democratic House members, only Reps. Joe Baca of Rialto and Calvin M. Dooley of Visalia supported it.