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House Takes Action on Energy Measure

Times Staff Writer

The House moved Wednesday toward passage of a far-ranging energy bill, with its leaders hoping that high gasoline prices would finally enable President Bush to achieve his goal of overhauling national energy policy.

While the bill includes long-term measures to address price volatility and supply shortages, such as offering tax breaks to promote domestic oil production and speeding the approval of new refineries, it would do little to provide immediate relief from high gas prices. But the bill’s supporters are eager to pass it to show they feel the public’s pain at the pumps.

“I for one would like to be able to go home this weekend and tell my constituents that we are one step closer to a little relief,” said Rep. Ralph M. Hall (R-Texas).

A similar Republican-drafted bill fell two votes short of overcoming a Democratic-led filibuster in the Senate in 2003. The bill’s proponents, however, believe they stand a much better chance of getting a bill to the president’s desk this year, in part because last year’s election gave the Republicans four more Senate seats.

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Bush has made passage of comprehensive energy legislation a priority since 2001, calling it critical to economic growth and national security. The House is expected to approve the bill today. Senate leaders plan to write their version of the legislation next month.

Still, the bill’s passage in the House is far from certain. Despite the 2000-01 California energy crisis and the massive 2003 Northeast blackout that put the spotlight on energy policy, efforts to pass the bill sputtered in a Congress where energy issues often divide lawmakers by regional interests instead of the usual party labels.

The bill includes a measure opposed by the president’s brother, Florida Gov. Jeb Bush, as well as by California officials. It would limit states’ ability to fight the building of liquefied natural gas terminals they believed pose a safety risk.

It also includes a controversial measure, sought by House Majority Leader Tom DeLay (R-Texas), that doomed the previous bill in the Senate: limiting the liability of makers of MTBE, a fuel additive blamed for fouling water supplies from California to New Hampshire. Senators from both parties have objected that the provision would force taxpayers to pick up the tab for cleaning up the contamination.

The House took up the bill as concern heightened in Washington that fuel costs were becoming a drag on the economy and could become an issue in next year’s congressional elections.

Gasoline prices in recent days have pulled back as oil prices have eased somewhat. On Wednesday, California’s average price for a gallon of self-serve regular was $2.642 and the U.S. average was $2.223, both up slightly more than 20% in the last year, according to a survey by the American Automobile Assn.

Oil futures in New York rose for the second day in a row to $52.44 a barrel, up 15 cents. The closing price for light sweet crude, the U.S. benchmark, is 39% higher than a year ago, but is down 8% from the record close of $57.27 a barrel on April 1.

“This year, with consumers hurting the way they are at the pump, we’re hoping Senate Democrats will stop the obstruction,” said House Speaker J. Dennis Hastert (R-Ill.).

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As the House opened debate, Bush called on Congress to send him a bill before the August recess. He said he could not “wave a magic wand” to provide immediate relief but offered to become more personally involved in forging a compromise that could pass Congress.

The White House budget office said that the $8 billion in energy tax breaks in the measure were excessive. “With oil at more than $50 a barrel, by the way, energy companies do not need taxpayers'-funded incentives to explore for oil and gas,” Bush told the U.S. Hispanic Chamber of Commerce on Wednesday.

Democrats said the legislation was anti-consumer and anti-environment and accused Bush of misleading the public into believing that it would bring down gas prices.

“This energy bill is not just about an overreliance on fossil fuels, but about fossilized ideas,” said Rep. Lloyd Doggett (D-Texas). House Minority Leader Nancy Pelosi (D-San Francisco) called it a “warmed-over stew of old provisions and outdated policies.”

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Many Democrats, some Republicans and environmental groups said the bill does not do enough to promote conservation and energy production from alternative sources, such as solar and wind power. An effort to increase vehicle fuel economy standards to an average of 33 miles per gallon over the next decade was defeated, 254-177.

The 1,000-plus-page bill, incorporating a number of the recommendations made by an energy task force headed by Vice President Dick Cheney in 2001, includes measures designed to strengthen the electric grids. It calls for greater use of corn-based ethanol in gasoline, a provision designed to win the votes of farm-state lawmakers.

Among other provisions are extending Daylight Saving Time by two months, expanding the size of the nation’s emergency oil supply from 700 million barrels to 1 billion barrels, and authorizing $2 billon over five years to launch a “state-of-the-art program” to get hydrogen-powered automobiles on the road by 2020.

Like the last major energy bill, passed in 1992, this measure is aimed at reducing U.S. dependence on foreign oil, especially from the politically unstable Middle East.

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The bill’s proponents said their hopes of finally sending a bill to Bush were bolstered by the Senate vote last month to endorse Bush’s goal of opening Alaska’s Arctic National Wildlife Refuge to energy exploration.

The House bill authorizes the Arctic drilling; an effort to strip that provision from the legislation was rejected Wednesday night, 231-200.

But any energy bill that emerges from House-Senate negotiations is not expected to include the drilling; instead, the contentious environmental proposal is being considered as part of the budget, a procedural tactic designed to sidestep a threatened Senate filibuster.

California officials have objected to a provision of the bill that would put the Federal Energy Regulatory Commission in charge of siting liquefied natural gas terminals.

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The California Public Utilities Commission has gone to court challenging federal regulators’ claim that they have sole authority to decide whether such a facility will be built.

Supporters of the provision in the bill say that FERC would be required to consult with local and state officials about siting of these facilities, but that the provision is needed to end a burdensome regulatory process that has slowed building of the gas terminals.

Currently, three terminals, which would convert the super-cooled liquid into a gas for distribution through pipelines, are being proposed for the Southern California coastline -- one at the Port of Long Beach and two off the Ventura County coast.

In the meantime, the California Legislature has jumped into the dispute. State Sens. Joe Simitian (D-Palo Alto) and Martha Escutia (D-Whittier) have introduced bills that would require the California Energy Commission to establish a process for determining whether such a facility is needed and, if so, picking a site that meets safety, environmental and economic criteria. The state bills, which passed their first committee this week, would have little legal force if the federal energy measure becomes law.

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“I would hate to see the federal government take any action which would preclude the state of California from acting in its own best interests,” Simitian said.

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Times staff writer Marc Lifsher in Sacramento contributed to this report.


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