House Approves Energy Bill ... Again

House Approves Energy Bill ... Again
May 1, 2005

Diane Bast

Diane Carol Bast is The Heartland Institute's executive editor and finance manager. As executive... (read full bio)

The U.S. House of Representatives voted on April 21 to approve an energy bill carrying a price tag of nearly $90 billion in direct spending and tax incentives.

H.R. 6, introduced on April 18 by Rep. Joe Barton (R-TX), passed by a vote of 249 to 183 after two days of rancorous debate and several, mostly unsuccessful, amendments. Proponents say the 1,019-page measure will bring the country's energy policies into the twenty-first century, encourage energy conservation, and reduce U.S. dependence on foreign sources of oil.

The bill "will go a long way toward giving our nation the sound, comprehensive energy policy that our citizens need and deserve," wrote House Speaker J. Dennis Hastert (R-IL) in an April 20 commentary for the Chicago Sun-Times.

Noting the Senate has rejected House-approved energy measures every year since 2001, Hastert called on Senators to "end the political jockeying."

In an April 20 address to the U.S. Hispanic Chamber of Commerce, President George W. Bush expressed his desire to see an energy bill on his desk this summer.

"The energy bill now before Congress ... [is] four years behind schedule," Bush said. "[I]t is in this country's interest to get me an energy bill I can sign by August of this year."

Too Much "Fine-Tuning"?

The ANWR and MTBE provisions are just the tip of the energy bill iceberg. The measure also provides tax incentives to energy producers over 10 years, including more than $2 billion aimed at encouraging research and development to make solar and wind power more commercially viable.

The bill addresses energy conservation by expanding Daylight Saving Time by two months and providing a tax credit up to $2,000 for homeowners who install efficient windows, doors, and insulation. An effort to tack onto the bill tougher car and truck fuel economy standards failed.

"The sheer magnitude of the bill indicates the extent to which the energy market has been politicized in the name of just about everything--affordability, security, access, reliability, fairness, development, renewability, climate, and cleanliness," observed Rob Bradley, president of the Houston-based Institute for Energy Research. "Is there another industry subject to this magnitude of policy fine-tuning?

"If the Bush administration can champion partial privatization of Social Security and simplifying the tax code," asked Bradley, "can we talk about starting over with energy policy? Can we begin by using the missing 'D' words: deregulation and depoliticization?"

Tough Time in Senate Expected

Bush's political opponents considered the House measure too weak on conservation and alternative energy sources, and too supportive of traditional energy interests. Senate Democrats are expected to balk at two provisions in particular: oil drilling in Alaska's Arctic National Wildlife Refuge (ANWR) and liability protection for makers of methyl-tertiary butyl ether (MTBE), a gasoline additive.

Proponents of oil extraction from ANWR say the area could produce as much as a million barrels of oil a day with methods that would be protective of the environment. ANWR drilling, they say, would help reduce the country's dependence on foreign sources of oil.

But some Senate Democrats have pledged to filibuster any energy bill that opens ANWR to drilling, saying oil from the refuge wouldn't be available quickly enough to address concerns over oil prices and foreign oil dependence.

The House bill also provides funds for research into oil and natural gas drilling in the deep waters of the Gulf of Mexico; an amendment aimed at shielding the Great Lakes from oil and gas drilling failed.

MTBE Protection

The most spirited debate came in response to the House bill's protection for makers of MTBE, a gasoline additive alleged to have contaminated drinking water supplies in several states. As many as 80 lawsuits have been filed by states and local communities against MTBE manufacturers and oil refiners in an effort to get money to cover cleanup costs, estimated at $29 billion or more.

Opponents of the liability protection, led by California Democrat Lois Capps, say it amounts to an unfunded federal mandate on state and local governments. Supporters of the provision said a federal mandate created the problems in the first place, noting the federal government required oil companies to find a fuel additive to replace lead, and MTBE was at the time the best available option.

The House measure requires oil refiners to phase out their use of MTBE by 2014 and includes $2 billion in funds to help refiners make the transition to other additives. Refiners will be required under the bill to use 5 billion gallons of corn-based ethanol by 2012.

As this issue went to press, no energy bill had been introduced in the Senate, but action there was expected soon.


Diane Carol Bast (dbast@heartland.org) is executive editor of Environment & Climate News.

Diane Bast

Diane Carol Bast is The Heartland Institute's executive editor and finance manager. As executive... (read full bio)