April 21, 2003
Volume 81, Number 16
CENEAR 81 16 p. 9
ISSN 0009-2347

ENERGY BILL PASSES HOUSE

DOE cheers, most Democrats grouse, industry wants more natural gas aid

JEFF JOHNSON

After two days of debate--and within hours of Congress' departure for the Easter recess--the House of Representatives by a 247 to 175 margin passed H.R. 6, a national energy bill.

H.R. 6 offers a multitude of provisions, including opening the Arctic National Wildlife Refuge to oil and gas drilling, supporting electricity deregulation and construction of new transmission lines, and protecting makers of the fuel additives ethanol and methyl tert-butyl ether (MTBE) from liability for environmental damage.

Republicans beat back attempts by Democrats to add provisions raising vehicle fuel efficiency standards, protecting electricity consumers in a deregulated market, and banning MTBE.

The Department of Energy strongly supports the bill, although President George W. Bush has complained about the large amount of tax breaks it includes.

The bill holds some $19 billion in energy-related industry tax incentives, spread over 10 years. The tax breaks were divided among activities affecting alternative fuels and energy efficiency, electricity restructuring, and oil and gas production.

SANCTUARY This section inside the Arctic National Wildlife Refuge is proposed by the Bush Administration to be used for oil exploration.

In the previous House session, a similar energy bill passed, but it carried a tax package nearly twice this bill's size and with a sharper tilt toward fossil fuel production.

Environmental groups are still unhappy. Adding up technological aid, tax breaks, and other support, the Natural Resources Defense Council says the new House bill provides $20 billion in aid that will go to oil, coal, and nuclear power producers, and few incentives that will be directed to less polluting energy sources.

The American Chemistry Council generally backs the bill, particularly provisions to encourage more combined heat and power facilities at chemical plants. However, ACC is disappointed that the bill fails to include what it believes are necessary provisions to quickly bring more natural gas to market.

An ACC spokesman says the U.S. chemical industry, which uses gas as a feedstock and as fuel, is in the throes of a natural gas crisis because of inadequate domestic gas supplies (C&EN, March 24, page 25).

Even though the bill includes billions of dollars in provisions to aid the oil and gas industry through royalty relief for more production and to offset the cost of environmental studies, ACC says the bill does not provide enough of a push for drilling.

The House bill's passage echoes events of the last Congress, wherein House Republican leadership drove a bill through as they adjourned for the August recess. That time, however, the Senate had been debating energy legislation for nearly a year, and energy legislation died in a House-Senate conference.

With the Senate now in Republican hands, and a bill already being debated in the Senate Energy & Natural Resources Committee, energy legislation may have a better chance this time around.


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