TheWeekInCongress.com

Week Ending June 18, 2004

HR 4503 Energy Policy Act of 2004

BRIEF

   The bill is said to aim towards enhancing energy conservation and research and development, providing for security and diversity in the energy supply for the American people. It would establish a program  to stimulate diverse energy research and development. Areas of concern would be energy efficiency, renewable energy, oil and gas, coal, Indian energy, nuclear matters and security, vehicles and motor fuels, including ethanol, hydrogen, electricity; and energy tax incentives. The bill is rich in grants, financial incentives and incentives based on reductions in regulations.

   Energy exploration and such development would involve a non-profit consortium of experts chosen by the secretary of Energy.

Sponsor: Representative Joe Barton (R-TX)

Vote: The motion to recommit the bill failed. The bill then passed the House   (RC-

Cost to the taxpayer: The President’s request was to spend around $8 billion. The first House energy bill would spend $17 billion. The Senate version wants to spend $16 billion. The current bill would spend to around $30 billion. Some examples of spending from 2004 through 2008 include; $1.01 billion for distribution of electricity systems, $3.01 billion for renewable energy, $2.04 billion for nuclear research and development and commercial applications and $2.9 billion for fossil fuels. Funds for each area of allotment are then further broken down to individual uses allowed and not allowed.

MORE INFORMATION

   The bill has become a contentious one if not only for the fact that it has, in various forms, passed the House several times since 2001 yet continues to go un-acted upon in the Senate where another version was favored.  The division between support and opposition to the bill seems hung on opposition to details and support of the anticipated overall long-term results.

   Representative Tom DeLay (R-TX) put the bill into historical and, in his opinion, political perspective. “President Bush promised to establish a national energy policy to prepare America's producers and distributors of energy for the changing times of the 21st century before he was even elected. His energy task force was formed inside the White House within 10 days of his inauguration.”

   “The first comprehensive energy bill was introduced in the House in the summer of 2001, Rep. DeLay said. “The House has passed it three times; and it has been stalled in the Senate all this time, even though a majority in the Senate supports the bill, but they will not let them vote on it. Three long years, Democrat obstruction in the Senate, obstruction, make no mistake, undertaken at the highest levels of Democrat leadership, at the beck and call of extreme special interests has kept the American people without a national energy policy. For most of those 3 years, the United States has been at war with an ideology that makes its home in the very region that produces most of the world's oil. We depend to large a degree on the energy resources produced in this unstable region, and we have had before us for 3 years a policy to change that fact. The comprehensive energy policy we will pass once again today will reduce America's dependence on foreign oil. That greater independence will increase America's political and economic security which, in turn, will increase our national security; and in addition to protecting our security, this bill will also add to our prosperity.”

   Rep. DeLay sees HR 2503 as a job maker. “Provisions in this bill would increase domestic energy production, would create hundreds of thousands of new jobs here at home while the Democrats' dithering in the Senate, solely responsible for America's continued over reliance on Middle East oil, is sending jobs overseas every week, “he said. “All along, provisions in this legislation that would encourage conservation and innovation and new fuel technologies have stagnated, thereby harming our economy, our environment, and letting us fall behind international competitors. While the Democrats have hamstrung the energy bill in the Senate, gas prices have risen, and the Northeast was struck with the largest blackout in history. The summer traveling season is upon us, the fourth since the President first delivered his legislation to us; and still, the American people wait for action.”

   Rep. DeLay concluded, “These are the facts. Jobs are waiting to be created. Our economy is waiting to be stronger and our Nation is waiting to be safer. I urge all my colleagues to help bring this waiting to an end. Vote ``yes'' on the comprehensive energy bill and give the Senate Democrats one more chance to do their duty.”

PROS AND CONS

    Representative John Dingell (D-MI) opposed the bill and had this comment, “This so-called Energy Policy Act is a conglomeration of costly special interest subsidies and anti-environmental provisions that newspapers from coast to coast have denounced. It includes the denunciation of such conservative newspapers as the editorial pages of the Wall Street Journal.”

   Oklahoma Republican, John Sullivan supported the bill as a job maker and to lower the US reliance on foreign oil, “We import more than half of our oil from foreign sources, and that number will grow to more than 66 percent by the end of the decade if we do not act now. America loses when we import foreign oil. For every $1 billion that we import, we lose more than 12,000 jobs. At today's oil prices, that means we send more than 1.7 million jobs overseas. By passing a comprehensive energy policy, we will create more than 800,000 new jobs in the energy industry. In my home State of Oklahoma, more than 100,000 people are employed by the energy industry. Mr. Speaker, I can tell my colleagues that these are good, high-wage jobs.”

   In response to opposition he said. “I have heard my colleagues on the other side of the aisle paint a gloom and doom picture of our economy. Well, here is their chance to make a difference. We have a responsibility to pass this legislation and send it to President Bush. Rarely do we have an opportunity to create so many jobs, and it is time to act now. Let us send an energy bill to the President, let us create more than 800,000 new jobs, and let it begin now.”

   West Virginia Democrat Nick Rahall II also opposed the bill including his perception that it would do little for his coal mining State, “The pending legislation would hurt the majority of coal producing regions and in other respects pays lip service to our most abundant domestic source of energy. According to CBO, of the close to $26 billion in tax breaks in this bill only $2.5 billion of that is for coal… and this $2.5 billion is for clean coal technology applications.” Rep. Rahall illuminated the conclusion that there are inordinate special favors in the bill that have little to do with energy conservation or job creation, “In fact, on a per capita basis, Mr. Speaker, Home Depot does better in this bill than the entire coal industry when you consider the $48 million that it would receive for not having to pay tariffs on ceiling fans.”

   Equally opposed and specific Representative Edward J. Markey (D-MA) said, ” This bill will have a negligible impact on energy production, a negligible impact on energy consumption, a negligible impact on energy imports, will increase the price of gasoline by 3 cents a gallon for regular. It will increase gas prices by 8 cents a gallon for reformulated. It provides $23 billion worth of special interest tax breaks for the oil, gas, coal, nuclear, utility industry. It weakens the Clean Air Act. It weakens the Clean Water Act. It repeals the protections against cross-subsidies amongst these big energy giants, but what is not in here? SUVs, automobiles, vehicles, where we put 70 percent of all oil in our country. Not a word. We will not be doing anything about that in this bill. We now import 60 percent of our oil and we have 135,000 young people over in the Middle East. This bill does not do anything about that. We are coming back in 15 more years importing 80 percent of our oil as the next generation of young men and women go over to the Middle East to protect the oil lines coming into our country.”

   “This bill does not meet the challenge of those 135,000 young men and women over in the Middle East, “Rep. Markey said. “It does not meet the challenge of the 24 million children and adults with asthma in our country from all of this pollution. It does not meet the challenge of 60, 70, 80 percent of our oil being imported into our country. It does not meet the challenge of the day. We have young men and women over in the Middle East. This bill does not reduce our dependence upon imported oil. It raises the price of gasoline at the pump, and it leaves the next generation wondering when they will have to go over to the Middle East.”

   Representative Joe Barton (R-TX) responded to Rep. Markey’s comments, “…when he (Markey) talked about the impact of this bill, and that it would not have an impact, or if it did it would have a negative impact. I would agree with him in the short term that that is probably correct, that if we pass this bill and the other body passes this bill and the President signed it tomorrow, I think it is fair to say that the energy prices would not go immediately down. But I would dispute the assertion that over the long term there is no positive impact.” Rep. Barton continued, “We need a comprehensive energy bill because gasoline prices are up, coal prices are up, natural gas prices are up, crude imports are up, refined product imports are up. We need to reform our electricity grid. This bill does that. We need to repeal PUHCA, the Public Utility Holding Company Act. This bill does that. We need to set up a program to go in and refit our existing old coal fired power plans. This bill does that. We need to determine if there is a better way to do automobile fuel efficiency in the program that is called CAFE. This bill does that. We need to increase our conservation efforts. This bill has provisions that it is estimated would eliminate the need for 130 additional power plants. We need to reform our hydroelectric relicensing process. This bill does that.”

   Some specific concerns of the Democratic opponents were noted by Representative James L. Oberstar(R-MN) “Section 328 exempts the oil and gas industry from complying with the storm water permitting requirements of the Clean Water Act of 1972 for construction purposes. This is the only construction action that would not be subject to clean water requirements should this provision prevail.”

   “Section 756(c) of the conference report allows a 250 pound increase in the weight of some heavy trucks purportedly for the purpose of providing an incentive to use a certain type of idle reduction technology. Well, we have examined this issue in great detail and with the Department of Transportation and the Federal Highway Administration, the increase in truck weight will inflict damage on the highway infrastructure and create a safety problem and will cost about $300 million a year in increased highway damage. The exemption is unnecessary. The industry's own figures show that idling reduction technologies pay for themselves in reduced fuel costs in about 2 years.”

   “Section 326 establishes a dangerous precedent under the National Environmental Policy Act by authorizing the Federal Government to reimburse oil and gas companies for the cost of undertaking environmental impact analyses for oil and gas leasing. They are going to make money off of it. They ought to do their own environmental impact analysis costs.”

    Representative Billy Tauzin (R-LA) saw the bill as one of an urgent concern, “This Nation is suffering. We are in dire need of a policy that tells the energy future traders on Wall Street to quit running the prices up and to begin thinking about a future where we are producing more energy at home for our own people instead of constantly fighting over battlefields to defend other people's energy supplies that we depend upon. When the last Arab oil embargo hit, we were 30 percent dependent on foreign oil. Today, we are 60 percent dependent, and that number continues to rise. The last refinery built in America was built in my district 25 years ago. We have not stopped building roads, we have not stopped building automobiles, we have not stopped building houses or factories in the country. We just stopped building the factories that produce the energy for the country. My colleagues wonder why we are so dependent, have so much at risk, why this Nation depends upon people we cannot depend upon anymore, just to keep the lights on anymore? That is our fault.”

   Also concerned with urgency was Representative Gene Green (D-TX) “Cuba is drilling 60 miles from Key West; and, yet, the Governor of Florida does not want, and we do not allow, American drilling companies to drill within 100 miles of Florida, even for zero-emitting platforms. We are not exploring or producing from our own domestic opportunities. I support renewable energy and hydrogen energy and everything else; but, Mr. Speaker, those things are 25 and 50 years away. What we need to do is address something on a short- and medium term.”

   But opponents continued to focus on the details. Representative Lois Capps (D-CA) said, “At a time of record-high gas prices, this bill would actually raise gas prices, but that is not all. The bill drills holes in the Clean Water Act; the Safe Drinking Water Act; NEPA, the National Environmental Protection Act; and the Coastal Zone Management Act. It lets MTBE producers off the hook for groundwater contamination their product caused, and it gives these same companies $2 billion of our constituents' money to get into a new line of work. What a deal.”

   Representative John Shimkus (R-IL) saw the bill meeting the needs of a larger picture, “The nay-sayers point out all these little problems for them and disregard all the humongous benefits that we have in this bill. Let me talk about MTBE. I am an ethanol guy, ethanol State, Illinois. We grow it, we refine it, we use it. The MTBE provisions do not relieve people of their liability if they spill MTBE. It does not relieve people of their liabilities if it goes out of their storage areas and contaminates the groundwater. What it does is it says if the Federal Government asks these people to refine MTBE, we told them to make MTBE, and now we are going to say they created a faulty product after the Federal Government told them to produce MTBE?” … “Who else but the government (would) tell them to go build a product and then that same government 15 years later sues them and says you can sue them, take them to court, close down this industry. This country has to make a decision. If we want to use electricity, guess what, we have got to have a fuel, we have got to have generation, and then we have got to be able to transmit that electricity over lines. This bill does that. Our country is a large country. We are going to be a very mobile society for decades. We are going to need to drive in our vehicles, and we are going to need to have fuel for our vehicles. This bill does that.”

But some elements of the bill did meet with acceptance from the opposition,”

The bill would attempt to achieve its goals by:

ENERGY SAVING MEASURES

   Revising energy reduction goals and performance requirements for Federal buildings and instituting grant programs for low-income community energy efficiency and energy efficient public buildings.

   Revising energy conservation standards for additional consumer products, affordable housing and assisted housing, and Federal Housing Administration (FHA) mortgage insurance incentives for energy efficient housing.

ALASKA AND OTHER  PUBLIC LANDS SOURCES OF FUELS

   Revamping guidelines governing leasing and permitting for geothermal development of public and National Forest System lands, including those withdrawn for military purposes.

   Guidelines would be established for hydroelectric licensing proposals for alternative conditions and requirements governing project works within a Federal reservation.

   The Secretary of Energy would be permanently authorized to operate the Strategic Petroleum Reserve and standby energy authorities governing the International Energy Program, including summer fill and fuel budgeting programs.

   Prescribing implementation guidelines for access to Federal land for oil and gas leasing; expedited permits; energy rights-of-way and corridors on public and Federal lands; renewable energy on Federal land; and electricity transmission line rights of way on public land.

     The bill would require the President and the Secretaries of the Interior and of Energy to expedite the Federal decision-making process for access to Federal lands for energy projects under Alaska Natural Gas Pipeline Act

    The bill would set forth a program of production incentives that includes oil and gas royalties in kind; marginal property production; natural gas production in the Gulf of Mexico; and oil and gas leasing in the National Petroleum Reserve in Alaska.

   The bill would prescribe parameters for Federal Energy Regulatory Commission (FERC) authorization of an Alaska natural gas transportation project and pipeline expansion following an expedited approval process.

The Secretary of Labor would be instructed to award grants to train adult and dislocated workers in Alaska in the skills required to construct and operate an Alaska gas pipeline system.

   The President would be directed to establish the Office of Federal Energy Project Coordination in the same manner and with the same mission as the White House Energy Projects Task Force established by Executive Order.

   The Secretary of Energy would be authorized to offer Federal loan guarantees to specified certificated entities for infrastructure projects.

COAL

  The bill would set forth a Clean Coal Power Initiative campaign that includes grants to universities to establish Centers of Excellence for Energy Systems of the Future.

   Federal loan guarantees would be authorized for designated coal gasification projects, including: a loan to the owner of a specified experimental plant; a coal gasification project that produces power in deregulated energy generation markets; and a petroleum coke gasification polygeneration project.

   The bill would modify statutory requirements governing Federal coal leases, including acreage limitations, mining plans, and advance royalty payments.

   The Energy Policy Act of 1992 would be amended to direct the Secretary of Energy to implement a program to facilitate production and generation of coal-based power and the installation of pollution control equipment.

AMERICAN INDIAN LAND

   The bill would establish the Office of Indian Energy Policy and Programs to promote Indian tribal energy resource development through a program of grants and loans. Indian Tribal Energy Development and Self-Determination Act of 2004.

NUCLEAR

   The Atomic Energy Act of 1954 would be amended to modify and extend indemnification authority and liability limits for Nuclear Regulatory Commission (NRC) licensees and Department of Energy (DOE) contractors.

   Prohibition assumption by the U.S. Government of liability for certain foreign incidents.

   The bill addresses general matters, including establishment of an NRC training and fellowship program for individuals with critical nuclear safety regulatory skills, elimination of pension offset, a DOE decommissioning pilot program, uranium sales, special demonstration projects for the uranium mining industry, whistleblower protection prescriptions, medical isotope production, uranium enrichment facilities, and the national uranium stockpile.

   The Secretary of Energy would be instructed to establish an Advanced Reactor Hydrogen Co-Generation Project.

   Implementation guidelines for a training program to respond to threats against designated nuclear facilities, including use of firearms by licensee security personnel and NRC certificate holders would be prescribed.

GASOLINE, DIESEL AND HYBRID FUELS

   The bill would require setting forth a transportation fuels program that uses alternative fuels for dual-fueled vehicles, fuel credits for medium and heavy duty dedicated vehicles, and lease condensates.

   Implementation guidelines for pilot programs that target alternative fueled vehicles, fuel cell vehicles, advanced vehicles, and hybrid vehicles would be required.

   The Secretary of Energy, in partnership with the private sector, would be instructed to conduct programs that address production of hydrogen from diverse energy sources.

    The President would be directed to establish an interagency task force on hydrogen fuel infrastructure for hydrogen-carrier fuels, including fleet transportation.

RESEARCH AND DEVELOPMENT

   The Secretary of Energy would be directed to implement initiatives that target research, development, and commercial application in the areas of energy efficiency, distributed energy and electric energy systems, renewable energy, nuclear energy,  fossil energy, ultra-deepwater and unconventional natural gas, and other petroleum resource exploration and production, science, and energy and the environment (including international cooperation).

CONSUMER PROTECTION AND ADMINISTRATION

   The bill would direct the Federal Energy Regulatory Commission (FERC) to put into action market transparency rules governing the sale of electric energy at wholesale prices in interstate commerce, or transmission services in interstate commerce, and prohibit ‘round trip’ trading.

   The Federal Trade Commission (FTC) would be authorized to issue rules that prohibit selecting another electric utility unless the consumer consents to the change (Slamming) and the sale of goods and services to an electric consumer (Cramming).

   Electric utilities would be required to make net metering and smart metering available upon consumer request, and terminate mandatory purchase and sale requirements pertaining to cogeneration and small power production utilities.

   FERC would be granted regulatory jurisdiction over an Electric Reliability Organization that would prescribe guidelines for electric reliability standards, including electric transmission infrastructure, operation and transmission rates.

   The Public Utility Holding Company Act of 1935 would be repealed.

   The Tennessee Valley Authority Act of 1933 would be amended to change the composition, operation, and duties of the Board of Directors of the Tennessee Valley Authority.

Retaining the effect of a specified Department of Energy Order regarding transmission security.

    The bill would mandate review of Federal agency review authorities over mergers to determine if duplicative authorities exist and revise the Federal Power Act prescriptions governing electric utility mergers.

GRANTS AND TAX BREAKS

   The bill would prescribe incentive payments for renewable energy production facilities and allow incentive payments to promote hydroelectric production.

   Energy Tax Policy Act of 2004 - Establishes energy tax credits affecting residential and business property, alternative motor vehicles and fuels, low sulfur diesel fuel, clean coal technology units, and certain alternative minimum tax provisions.

   The bill would amend the Rural Electrification Act of 1936 to authorize Federal grants to rural and remote communities with specified electricity costs for improved electric generation, transmission, and distribution facilities.

   The bill would providing royalty payment relief for offshore oil and gas production leases under the Outer Continental Shelf Lands Act.

   The Secretary of Energy could make loan guarantees for private sector construction of facilities for the processing and conversion of municipal solid waste and cellulosic biomass into fuel ethanol and other commercial byproducts and provide grants for construction of ethanol production facilities.

   The Secretary of Energy would authorized to make grants to provide assistance to merchant producers of methyl tertiary butyl ether (MTBE) in making the transition from producing MTBE to producing iso-octane, iso-octene, alkylates, or renewable fuels.

ENVIRONMENTAL CONCERNS

   The bill would extend the attainment date for certain downwind ozone non-attainment areas. (Editor’s note: Areas suffering from non-attainment of the goals of he Clean Air Act due to pollution coming from ‘down wind’ would find deadlines for attainment of air quality extended)

   The Solid Waste Disposal Act would be amended to direct the Administrator of the Environmental Protection Agency (Administrator) to establish criteria for safe and environmentally protective use of specified granular mine tailings.

    The Clean Air Act would be amended to direct the Administrator to put into action regulations ensuring that domestic motor vehicle fuel consumption includes renewable fuel containing ethanol.

  The use of MTBE in motor vehicle fuel would be prohibited by December 31, 2014, in any State that does not specifically authorize it. The President would be authorized to determine by June 30, 2014, that the prohibition against the use of MTBE in motor vehicle fuel shall not take place and that the legal authority to prohibit its use in motor vehicle fuel shall become null and void. (Editor’s note: MTBE is a highly carcinomic liquid added to gasoline to make it burn cleaner. Within the past ten years it was discovered that the stuff was leaking from underground gas tanks and entering water tables where it made the water usable and dangerous to human life)

   The oxygen content requirement for reformulated gasoline would be eliminated.

   Restrictions that States can place on fuels and fuel use would be on the condition of finding that they will neither cause fuel supply or distribution interruptions nor have a significant adverse impact on the ease of producing the fuels.

   Underground Storage Tank Compliance Act of 2004 - The Solid Waste Disposal Act would be amended to require the Administrator to distribute specified fund percentages from the Leaking Underground Storage Tank Trust Fund to States to pay the cost of regulating underground storage tanks (USTs). Undistributed funds could be used for enforcing UST regulations.## All Rights Reserved. No reproduction or distribution without written permission from TheWeekInCongress.com