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House approves $12 billion energy package

The House  on Thursday approved a $12 billion energy bill backed by the White House that contains incentives to increase domestic production of crude oil, natural gas, coal, nuclear and other energy sources.
The House-passed bill contains controversial provisions to allow oil drilling in Alaska’s Arctic National Wildlife Refuge
The House-passed bill contains controversial provisions to allow oil drilling in Alaska’s Arctic National Wildlife RefugeU.S. Fish and Wildlife Service
/ Source: news services

The House  on Thursday approved a $12 billion energy bill backed by the White House that contains incentives to increase domestic production of crude oil, natural gas, coal, nuclear and other energy sources.

The broad bill, approved by a 249-183 vote, also contains provisions to allow oil drilling in Alaska's Arctic National Wildlife Refuge, to shield makers of a gasoline additive from water contamination lawsuits and to boost production of ethanol, a corn-distilled fuel additive.

The largely Republican-crafted bill was approved after two days in which the GOP majority turned back repeated attempts by Democrats to add measures they said would reduce energy use, including a proposal for higher automobile fuel economy requirements.

The bill includes $12 billion in tax breaks over 10 years and subsidies for energy companies, more than the Bush administration said it wanted. Nevertheless the White House strongly endorsed the measure.

White House endorses bill
"This is a comprehensive piece of legislation, and it does address one of the fundamental problems facing our nation and that is that we are growing more dependent on foreign sources of energy," said White House spokesman Scott McClellan.

The House measure must be reconciled with the Senate's energy bill before it can be signed into law. The Senate Energy Committee is expected to finish writing its energy bill in May, followed by a vote in the full Senate.

The House version of the bill has come under attack from Democrats, who say it would funnel billions of dollars to highly profitable energy companies while doing little to promote conservation or ease gasoline prices.

The bill’s sponsors argue that oil from Alaska’s Arctic National Wildlife Refuge, as much as a million barrels a day, will be needed to help curtail the country’s growing dependence on oil imports. Opponents argued the oil wouldn’t be available for a decade and even then at levels that would not significantly affect oil prices or imports.

Development of the Alaska refuge has been a contentious issue for nearly a decade. Environmentalists fear a spider web of drilling platforms and pipelines would harm the area’s polar bears, caribou, migrating birds and other wildlife.

Senate Democrats have pledged to filibuster any energy bill that would open the refuge to oil companies. An amendment to strip the Alaska refuge provision from the House energy bill failed Wednesday night 231-200.

Rep. Ed Markey, D-Mass., who offered the ANWR amendment, noted Wednesday that the bill does nothing to improve the fuel economy of automobiles, which he said use 70 percent of the country’s oil, and that it was wrong “to then turn to the wilderness areas and say we need energy.”

An attempt to require automakers to increase fuel economy to a fleet average of 33 miles per gallon over the next decade was defeated 254-177.

Fuel efficiency proposal rejected
Rep. Sherwood Boehlert, R-N.Y., a co-sponsor of the auto fuel economy proposal, said it would have reduced oil use by 2 million barrels a day — more than could be taken from ANWR — by 2020. He said it was “a bunch of nonsense” that the increased fuel economy would cost the auto industry jobs, force consumers to buy smaller cars or reduce automobile safety, as opponents claimed.

“We don’t need to micromanage our auto manufactures,” countered Rep. Fred Upton, R-Mich.

Rep. Richard Pombo, R-Calif., acknowledged that ANWR was “a very unique place” that deserves protection but argued that its oil can be developed using modern drilling techniques without harming the environment and wildlife.

“We don’t have to choose between providing the energy resources ... and protecting our environment,” he said.

President Bush on Wednesday called for Congress to give him an energy bill by this summer and “send an important signal” that the country “is serious about solving America’s energy problems.” Congress has failed to agree on energy legislation, despite repeated tries, during the last four years.

Problems won't be ‘solved overnight’
In a speech to the Hispanic Chamber of Commerce, Bush said he wished he “could wave a magic wand and lower gas prices tomorrow” but said the nation’s energy problems took years to develop and are “not going to be solved overnight.”

House Democratic leader Nancy Pelosi of California accused Bush of trying to exploit people’s anxiety over high gas prices to gain support for a bill that she said “was written by energy lobbyists for the benefit of the energy industry.” She said it would neither lower energy prices nor curtail America’s growing reliance on oil imports.

Rep. Joe Barton, R-Texas, the legislation’s floor leader, called the bill balanced and said if it becomes law it will provide for a more diversified array of domestic energy sources from coal, oil and gas to nuclear and renewable such energy from biomass, ethanol and wind.

‘We'll see prices stabilized’
“Midterm and long term, if the bill becomes law, we’ll see prices stabilized,” Barton said at a news conference with Majority Leader Tom DeLay, also of Texas, who accused Democrats of being “obstructionists.”

“There are those that do not want a solution, they just want the bill to fail,” DeLay said.

The House bill also would make it easier to build liquefied natural gas import terminals, even if states or local communities oppose the project.

Some lawmakers were incensed that they could not debate on the House floor a provision in the bill that would give makers of MTBE, a gasoline additive that is contaminating drinking water, a shield against product liability lawsuits by communities facing expensive cleanup costs.

The bill gives MTBE makers “safe harbor” and will leave communities and water districts with billions of dollars in cleanup costs, said Rep. Lois Capps, D-Calif., who had prepared an amendment to remove the MTBE section. She also wanted to remove a provision that gives MTBE makers, including some of the biggest oil companies, $2 billion in transition assistance as MTBE is phased out over the next nine years. GOP leaders did not accept either amendment.

Additive issue a DeLay priority
The MTBE liability issue has been a top priority for DeLay, who was instrumental in getting into the legislation a measure that would funnel $2 billion over 10 years for research into recovering oil and gas from extremely deep areas of the Gulf of Mexico.

Among other provisions in the bill are those to:

  • Require for refiners to use 5 billion gallons of corn-based ethanol by 2012, a 20 percent increase over what the industry is expected to produce this year, and a boon to farmers.
  • Expand of daylight-saving time by two months, so it would start on the first Sunday in March and end on the last Sunday in November.
  • Provide tax breaks to spur the construction of natural gas pipelines and improve the nation’s electricity grid. It also would require grid operators to comply with mandatory reliability standards instead of industry self-regulation.
  • Provide $1.8 billion in incentives for development of less polluting “clean coal” projects.