Video: Energy bill
Nov. 14 -- NBC's Chip Reid reports Republicans finished drafting an energy bill with provisions on power lines as well as billions in tax breaks for energy industries.
msnbc.com staff and news service reports
updated 11/17/2003 8:47:34 AM ET 2003-11-17T13:47:34

Republicans on Friday finished a massive energy bill that would double Americans’ use of ethanol in their cars, reduce their susceptibility to power blackouts and aim tax breaks at oil, natural gas, coal and nuclear power providers. However, the measure would deny President Bush his top energy priority: oil drilling in the Arctic wildlife refuge.

Energy map of america
“WE’VE SUCCEEDED in a most difficult, difficult job,” said Sen. Pete Domenici, R-N.M., who chaired the House-Senate talks. “It’s a lot harder to do this bill than to do (government) budgets.”

The legislation is the first overhaul of national energy policy in a decade. While details won’t be available until Saturday, the bill calls for billions of dollars in new tax breaks for energy industries and would double the use of corn-based ethanol as a gasoline additive for cars, a boon to farm states.

Supporters said it will spur job creation and reduce the likelihood of future energy crises such as the surging natural gas prices earlier this year and the summer power blackout.

“This is going to make a difference in American families’ lives,” predicted Rep. Billy Tauzin, R-La., the House chief negotiator. He said it will “begin the restructuring of energy in this country.”

OPPOSITION, INDUCEMENTS

The bill is expected to win easy approval in the House but will face a tough fight in the Senate, where Republicans need to muster 60 votes to end any Democratic filibuster.

“This bill should be stopped in whatever way possible, and I will be checking with my colleagues to see if we have the support to do so,” said Sen. Charles Schumer, a New York Democrat.

Environmentalists also were quick to reject the deal. “It perpetuates the profits of the oil, gas and coal industries,” said David Alberswerth, a Wilderness Society program director.

But inducements like the ethanol provision could secure some Democratic votes. Senate minority leader Tom Daschle of South Dakota, for one, had lobbied hard for an ethanol provision.

Moreover, while the compromise bill largely reflects the president’s energy agenda, it does not open the Arctic National Wildlife Refuge in Alaska to oil drilling. It became clear that the refuge issue would jeopardize the bill in the Senate, where Democrats and moderate Republicans want the refuge protected.

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1,200 PAGES

An agreement on the bill, which totals nearly 1,200 pages, came after weeks of wrangling over tax breaks for ethanol, certain types of petroleum and the nuclear power industry, as well as how much support the government should give a proposed natural gas pipeline from Alaska to Chicago.

The House could have the bill for a vote as early as Tuesday, with the Senate taking it up as early as Wednesday, Domenici said. Staffers involved in the tax negotiations said some minor disagreements still were being worked out on taxes.

The legislation was drafted by Senate and House conferees after each body passed its own energy bill.

Democrats were largely left out of the energy negotiations, although they had some involvement in the tax issues.

Alberswerth said he hoped that kind of treatment would “turn off” Democrats from supporting the bill.

BLACKOUT MOMENTUM

Energy legislation has been a top priority of the White House. President Bush said he wanted a bill this year, calling it both an economic and national security priority.

InsertArt(2071605)Pressure on lawmakers to push through a bill increased last August when a power blackout hit the Midwest and Northeast.

The legislation takes steps to improve the reliability of the grid by for the first time imposing government reliability standards and penalties on the transmission system.

Critics of the electricity language fear it will also repeal some consumer protections.

FOSSIL FUEL VS. RENEWABLES

The compromise legislation will largely mirror an energy agenda outlined by the White House more than two years ago and place heavy emphasis on boosting energy production.

It is expected to have between $16 billion and $22 billion in new tax breaks — a majority going to boost development of oil, natural gas, coal and nuclear power. Some tax breaks will go to promote energy efficiency and renewable energy sources such as power from wind turbines.

Democrats have sought more support for renewable energy sources. They criticized the legislation for not requiring electric utilities to produce a certain amount of power from renewables and not taking steps to curtail fuel used by automobiles.

To promote more energy development, the GOP bill would speed up permits and ease environmental restrictions for developing oil and gas on federal land. It also would provide royalty relief for companies that pursue natural gas in deep waters of the Gulf of Mexico and some tax benefits for construction of a $20 billion pipeline to bring gas from Alaska’s North Slope.

MTBE CONTROVERSY

The bill could still prompt sharp debate in the Senate, however.

Republican Sen. Arlen Specter of Pennsylvania told Republican leaders this week that he was concerned about liability protection for makers of the gasoline additive MTBE, which has been found to contaminate drinking water.

“I have a lot of personal and constituent concerns on these issues,” Specter scrawled in a hand-written note to Domenici.

Congress should not extend liability waivers to “an industry that may very well have acted improperly,” Specter said, adding that Congress should “allow our judicial system to sort through the claims.”

The bill would also order the fuel additive MTBE to be phased out by 2015, Republican lawmakers said. That is a much longer deadline than the four-year limit favored by the Senate.

Specter said he also opposed language inserted by Rep. Joe Barton, R-Texas, to amend the Clean Air Act to give some cities more time to meet air pollution standards set by the Environmental Protection Agency.

The Associated Press and Reuters contributed to this report.

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