Fuel-additive liability, Alaska refuge drilling among issues to be decided
By Bruce Odessey
June 28, 2005
After two weeks of debate senators voted 85-12 June 28 to pass a bill aimed at increasing domestic production of oil and reducing dependence on foreign sources. They declined to consider some issues that had previously stalled attempts to pass a bill over four years.
For the bill to become law requires passage by the House and Senate of a final version and signature by the president. Negotiating a final version in a House-Senate conference could take months.
President Bush issued a statement praising the Senate's action, calling that version of the bill consistent with his administration's 2001 energy proposal and urging passage of final legislation before Congress takes a month-long recess starting mid-August.
"This bill will help our economic growth by addressing the root causes of high energy prices and reducing our dependence on foreign sources of energy," Bush said. "It will encourage the use of technology to improve energy conservation and efficiency, help increase domestic energy supplies, support alternative and renewable sources, and enhance reliability."
The House and Senate bills differ over proposed tax cuts. Over 2005-2010 the Senate bill would cost about $10.7 billion, the House bill, about $4.1 billion.
The bill passed by the House in April would give tax breaks mostly to companies that provide U.S. oil, gas, coal and nuclear sources of energy.
The Senate bill would give tax breaks as well for renewable energy sources such as wind, solar and biodiesel and for conservation such as purchases of hybrid autos (which are powered partly by batteries, partly by gasoline). It would also require the federal government to derive a small share of its energy from renewable sources.
The House bill, but not the Senate bill, would allow oil drilling in the Arctic National Wildlife Refuge in Alaska.
The House bill, but not the Senate bill, also would waive liability for producers of the fuel additive methyl tertiary butyl ether (MTBE). Although MTBE is added to gasoline to reduce air pollution, its production causes some water pollution, creating costs for cleaning contaminated groundwater that could become enormous.
Senators did not consider these two controversial issues in their bill possibly because they had stalled Senate action on energy legislation in the past.
The Senate bill would require a federal government inventory of federal offshore areas for potential oil and gas drilling, a provision opposed by delegations from many coastal states. A moratorium prevents most federal offshore drilling except in parts of Alaska and the Gulf of Mexico until 2012. The House bill has no such provision.
Also over opposition from coastal states, the Senate passed a provision preventing states from blocking location of liquefied natural gas import terminals on their coasts; the Federal Energy Regulatory Commission would have authority to make such siting decisions.
Senators voted to reject amendments that would have raised federal fuel-efficiency standards for autos and light trucks, capped greenhouse gas emissions and required U.S. participation in international negotiations over climate change.
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