Congress Revises Bush Energy Plan

Published May 1, 2003

Furious debate and closed-door maneuvering are shaping the fate of President Bush’s energy plan.

The President suffered a setback as the Senate narrowly rejected legislation to allow oil recovery in the Arctic National Wildlife Refuge (ANWR). On the global warming front, Republican Congressmen considered approving legislation that would implement the Kyoto Protocol in everything but name.

Senate Blocks ANWR

On March 19, the Senate voted 52-to-48 to block oil recovery in ANWR. Eight liberal Republicans–John McCain of Arizona, Gordon Smith of Oregon, Lincoln Chafee of Rhode Island, Susan Collins and Olympia Snowe of Maine, Mike DeWine of Ohio, Peter Fitzgerald of Illinois, and Norm Coleman of Minnesota–joined 43 Democrats and Independent Jim Jeffords in defeating oil recovery. Five moderate Democrats–John Breaux and Mary Landrieu of Louisiana, Daniel Akaka and Daniel Inouye of Hawaii, and Zell Miller of Georgia–joined 43 Republicans voting with the minority.

Democrats in the Senate had filibustered the issue last year when it appeared the President had a majority willing to support resource recovery. This time, a filibuster was inappropriate because resource recovery was being contemplated in a budget resolution immune to filibuster.

“I am pleased that as a bipartisan group we have stood firm in our resolve to protect the refuge,” said Barbara Boxer (D-California), who had offered the budget amendment to block oil recovery.

“This is a national treasure,” said John Kerry (D-Massachusetts), a consistent opponent of Arctic resource recovery. “We’re not using a lot of land,” countered Ted Stevens (R-Alaska).

Stevens, chair of the Appropriations Committee, considered it a personal affront that resource recovery in his home state was defeated in an Appropriations-related matter. “People who vote against this today are voting against me and I’ll not forget it,” said Stevens.

“The more I review ANWR, the more difficult it is for me to understand how it could have become such a big environmental issue–but it has,” said Pete Domenici (R-New Mexico).

“It’s bad enough that too many Americans and their representatives fight practically every attempt to expand oil and gas production on federal lands or improve our energy infrastructure,” said Mark Whitenton, a vice president with the National Association of Manufacturers. “But to deny that exploration and extraction technologies have made tremendous advances in recent years and to insist we keep off-limits a tiny parcel of Alaska’s coastal plain is simply unforgivable. “Our manufacturing sector has now experienced 31 consecutive months of job loss,” Whitenton added, “yet a mythology persists in some quarters on Capitol Hill that we can somehow overcome our economic difficulties without expanding domestic energy production. Either we increase domestic energy production with existing, environment-friendly technologies … or we can insist on costly conservation mandates, deny our ability to safely produce conventional fuels, further drive energy prices upward, and hinder future economic growth and prosperity.”

“Opening ANWR could boost domestic U.S. oil production by 14 percent,” said Marlo Lewis, senior fellow at the Competitive Enterprise Institute (CEI). “That means tens of thousands of new jobs and tens of billions of dollars of additional GDP.”

The issue remained alive in the House, where the Resources Committee passed energy legislation that included ANWR resource recovery. Proponents of the legislation held out hope that differences between the House and Senate could be resolved in favor of resource recovery when the two entities hammer out a compromise in committee.

Other Provisions Take Shape

The House Energy and Commerce Committee approved legislation that would require refiners to include in gasoline at least 5 billion gallons of ethanol per year by 2015–double what is currently required. The legislation also:

  • streamlines federal approval of hydroelectric dams;
  • rescinds a law restricting mergers among power companies;
  • gives the Federal Energy Regulatory Commission the power to confiscate private land for power line construction;
  • authorizes a natural gas pipeline from Alaska to the lower 48 states;
  • implements President Bush’s hydrogen fuel cell program; and
  • increases the U.S. emergency oil reserve by more than 40 percent.

In other energy legislation, the House Ways and Means Committee passed a bill creating $18.7 billion in tax incentives primarily for alternative fuels and conservation programs. Included in the bill is an extension of tax credits for wind power, new tax credits for landfill energy production, and conditional credits for natural gas production. The legislation is similar to Senate legislation providing $16 billion in energy tax incentives.

Key Issues Remain Unresolved

Some key energy issues have not yet been decided. Chief among them are new restrictions on carbon-based fuels contemplated as a way to address suspected global warming. The Senate Energy and Natural Resources Committee drafted legislation that would direct the Department of Energy to award companies transferable credits for voluntary reductions in carbon dioxide (CO2) emissions.

Such a scheme would “lead inexorably to Kyoto-style energy rationing,” warned CEI’s Lewis. “Transferable credits will mobilize lobbying for energy rationing. Credits attain full market value only under a mandatory emissions reduction target or ‘cap.’ In effect, credits are Kyoto stock that bears dividends if, but only if, Kyoto or kindred regulation is adopted. Every credit holder will have an incentive to lobby for Kyoto or its domestic equivalent.”

The result of CO2 rationing would be higher energy prices, exacerbating problems in the country’s sluggish economy as businesses and consumers would be required to switch to more expensive alternative energy sources.

Kyoto or its equivalent “is a gigantic energy rationing scheme–the regulatory equivalent of regressive, growth-chilling energy taxes,” Lewis warned. “Rising energy prices caused or contributed to every recession of the past 25 years.”

James M. Taylor is managing editor of Environment & Climate News. His email address is [email protected].