Republicans Seize Moment to Push Energy Policy Overhaul

Times Staff Writer

With a possible U.S.-led war against oil-rich Iraq helping drive up gasoline prices to more than $2 a gallon in California and other parts of the country, congressional Republicans are stepping up their efforts to pass the most thorough overhaul of energy policy since the 1970s.

The war itself -- if it comes -- probably will highlight arguments by the White House about the danger of U.S. dependence of foreign sources of oil and its push for more domestic energy production.

Seizing the moment, House Republicans are circulating a 285-page energy bill that includes measures to enlarge the nation's emergency stockpile of oil, build a pipeline to bring natural gas from Alaska to the lower 48 states, authorize President Bush's call for developing hydrogen-powered fuel-cell vehicles and extend a cap on the nuclear industry's liability in accidents. That last provision is designed to remove an obstacle to expansion of nuclear power.

The bill also includes proposals spawned by California's electricity crisis of 2000-01, such as prohibiting trading practices used by energy companies to drive up the price of power and boosting to $1 million the penalty for violating federal laws governing the wholesale power markets.

Separate measures are being drafted to advance Bush's goal of opening up the Arctic National Wildlife Refuge in Alaska to oil and gas drilling, provide billions of dollars in tax incentives to promote energy production and conservation, and require greater use of corn-based ethanol in the nation's gas supply.

Phil Sharp, a former Democratic congressman from Indiana who serves on a national commission studying energy policy, expects a possible war with Iraq "to keep the attention of Congress on energy issues" because of the anticipated effect on the already-rising cost of gasoline.

"It's just an old saw in American politics: The one thing that gets the politicians' and public's attention is higher prices," he said. "So everybody scrambles to do something. Over and over, you'll hear people ... claiming that [the energy bill] is going to help make us a more secure America by reducing our oil dependence."

Sen. John B. Breaux (D-La.), a leading voice on energy matters in the Senate, said Tuesday that a war would focus attention on U.S. dependence on the Middle East for oil and the need for a better energy policy.

"It helps those of us who want to do things to encourage domestic production," he said, adding that he is optimistic Congress will pass a bill. "We came very close last year. Conditions are such that politically, it's going to be easier to get a bill this year than last year."

As evidence of the growing interest in energy issues, the Bush administration Tuesday released $150 million in energy assistance to low-income residents. Also, a bipartisan group of senators introduced legislation to strengthen federal oversight of energy markets.

A senior administration official directly involved in lobbying for the energy bill said the administration sees no need to specifically cite Iraq as a need for passing the legislation. "As a practical matter, it's fairly easy to make the case" without Iraq, the official said.

Bush in recent speeches has cited the importance to economic and national security of reducing imports from countries "that don't care for America." Imports account for more than half of the country's oil consumption, up from 36% during the 1973 Arab oil embargo. And those imports included about 366,000 barrels a day from Iraq as of December under a United Nations program that allows that country to use the proceeds from oil sales to buy food and humanitarian supplies.

Some Republican strategists are skittish about directly linking the energy bill to a confrontation with Iraq for fear it would play into antiwar arguments that an invasion is an effort to control Middle East oil.

The last time Congress approved a comprehensive energy legislation was 1992, after the Persian Gulf War, when Bush's father was president. But to ensure passage, sponsors were forced to drop the two most hotly contested provisions -- calling for oil exploration in the Arctic refuge and higher fuel-efficiency standards for vehicle.

Experts say a similar scenario is possible this year.

Larry Sabato, a University of Virginia political scientist, said that if the White House is going to win approval of an energy bill, "we are probably approaching the ideal legislative moment for it."

"The high gas prices are really starting to grate on the voters, so much so that they may be willing to overlook some environmental concerns to expand domestic energy capacity," he said.

Also, the "rally 'round the president and flag" effect, if war occurs, could help the legislation.

"If the Iraq war goes well and America wins it quickly and decisively, there will be a brief second honeymoon for Bush's proposals in Congress," Sabato said. If Iraqi President Saddam Hussein sets fire to Iraq's oil wells, gas prices may skyrocket, adding to the pressure on Congress, he added.

Same Conflicts Remain

Still, some of the same fights that doomed the energy bill last year are likely to flare up anew, perhaps more so because of another outside influence: the emerging presidential campaign.

Democrats objected that the GOP energy proposals tilted too heavily toward greater use of coal, oil and nuclear power, while not doing enough to promote conservation and use of alternative energy sources, such as solar and wind power.

For these same reasons, many Democrats are unlikely to embrace the new bill. It doesn't include party priorities such as tougher fuel-economy standards for sport-utility and other vehicles; a requirement for utilities to generate much more electricity from alternative sources, such as solar and wind power; and a mandate for businesses to reduce emissions of carbon dioxide and other so-called greenhouse gases blamed for global warming.

"Democrats are in no mood to be cooperative," said Ric Uslaner, a University of Maryland political scientist. "They see [Bush] as very vulnerable in 2004 and are not terribly interested in compromising now."

House Republicans have set an ambitious timetable for energy legislation, hoping to bring it to the floor by Easter.

"With the world's current energy situation, and natural gas and oil prices as high as they've ever been, we can no longer afford to just talk about a national energy policy. We need to have one in place," said Rep. Joe Barton (R-Texas), chairman of a key House Energy subcommittee.

In the Senate, GOP leaders are proceeding on two tracks.

Sen. Pete V. Domenici (R-N.M.), chairman of the Senate Energy and Natural Resources Committee, is pushing to pull out the Arctic drilling proposal and put the contentious issue to a separate vote, probably later this month.

Domenici hopes to attach the drilling proposal to a budget bill that under Senate rules would prevent a Democratic-led filibuster that has blocked the initiative in the past. But it is unclear whether he has the votes to pass the measure.

The senior administration official close to the energy issue conceded that the proposal to allow drilling in the Arctic refuge faces an uphill battle.

Domenici also is drafting a comprehensive energy bill that he hopes to bring to the Senate floor in May or June. He said that his bill will include provisions that address what he termed "unnecessary delays" in oil and gas development on public lands after the federal government has awarded leases.

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Times staff writers Edwin Chen and James Gerstenzang contributed to this report.

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