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Long-Stalled Energy Bill Hits Senate Floor

June 14, 2005 at 12:00 AM EDT
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KWAME HOLMAN: In the four years since President Bush first sent Congress a comprehensive energy plan, the House and Senate repeatedly have failed to agree on legislation to send back to his desk.

SPOKESPERSON: A secure, affordable, and reliable energy.

KWAME HOLMAN: Today the Senate opened debate on a new version of an energy bill, with supporters hoping record high gasoline prices will convince colleagues to act.

SEN. LAMAR ALEXANDER: High natural gas and oil prices this year make the situation more urgent.

KWAME HOLMAN: The bill would boost production of domestic oil, natural gas, and gasoline, and fund construction of nuclear power plants. A larger goal of the measure, supporters say, is to reduce America’s dependence on foreign oil, which now accounts for close to 60 percent of domestic consumption. New Mexico Republican Pete Domenici chairs the energy committee.

SEN. PETE DOMENICI: We can’t produce enough oil to meet this need. As a matter of fact, today as we stand here, the United States has diminished regularly its ability and quantity of oil that it produces so that in the world, we’re no longer a major producer; we’re number six. If you look out in the world, we’re the sixth largest producer and fading.

KWAME HOLMAN: Republicans and Democrats today boasted about the wide bipartisan support the bill has. But hurdles remain due largely to a very different energy bill that already has passed the House of Representatives.

For instance, many senators strongly oppose a provision in the House bill that gives liability protection to producers of MTBE, a fuel additive that has contaminated water supplies in communities nationwide. Senate Democratic Leader Harry Reid charged it was House Majority Leader Tom DeLay’s insistence on including MTBE protection that sunk the 2003 energy bill, and could do so again.

SEN. HARRY REID: I feel very confident, if the House demands that it stay in there — and I understand, Congressman DeLay is bent — is certainly positioned to make sure that does stay in the bill, I don’t think there will be an energy bill again.

KWAME HOLMAN: Another factor complicating the energy bill is a House provision that allows oil exploration in ANWR, Alaska’s Arctic National Wildlife Refuge. Democrats in the Senate threatened to filibuster the energy bill if it included ANWR, prompting Republican leaders to try to find room for it in other legislation.

Over the next two weeks, the Senate will debate an amendment to cut carbon dioxide emissions and other greenhouse gases blamed for global warming. Members also are likely to add $11 billion in tax breaks to promote energy production and conservation.

GWEN IFILL: Jeffrey Brown picks up where Kwame left off.

JEFFREY BROWN: At some 768 pages of details and provisions, the Senate energy bill is not light summer reading. To help us make our way, we’re joined by Mary O’Driscoll, a reporter for Environment and Energy Daily; and Jason Grumet, executive director of the National Commission on Energy Policy, a bipartisan group made up of industry, environmental, and scientific leaders. It’s funded by foundations, including the William and Flora Hewlett Foundation and the Pew Charitable Trusts, which also fund the NewsHour. And welcome to both of you.

Jason Grumet, starting with you, we’ve seen this battle many times before, as Kwame said. In terms of key ideas or approaches, is there something new this time?

JASON GRUMET: Jeff, I think there is. There is a bit of a groundhog day feeling around town. This is the third Congress in a row that has tried to tackle national energy policy, and I think there’s good reason to believe the third time is a charm. There has been a real bipartisan spirit cast between Chairman Pete Domenici and Jeff Bingaman, the two men who are leading this effort in the Senate.

They were able to achieve a significant majority, 21 of 22 senators voted the bill out of committee. While there are real rough patches ahead, I think what we saw already today a spirit of compromise on tough issues like ethanol, renewable energies, some of the big production issues, and even climate change. There seems to be a real growing momentum that it’s time to get something done.

JEFFREY BROWN: Do you see that growing, coming together or do you see the big fights?

MARY O’DRISCOLL: I don’t know, I guess I can see a little bit of both. To his great credit, Sen. Domenici really worked very hard this time to make this a bipartisan energy bill. He worked very hard. He failed the last time because he did not include the Democrats. This time he did; he was painstaking about it. And so he’s achieved some significant victories that way.

But there are still some major hurdles. As you pointed out in the segment earlier there is the MTBE issue, which has not been resolved yet. You still have climate change. There is a consensus starting to grow, it appears, but they’re still far from coming up with a specific plan that they’re going to deal with that, also issues surrounding renewable energy mandates and offshore oil and gas drilling.

JEFFREY BROWN: Let me ask you about that one, the offshore drilling because that seems to be a major contention that’s already started.

MARY O’DRISCOLL: It has. There was a significant debate and significant backroom activity in the Senate on offshore drilling. It’s a fight essentially between the west part of the Gulf Coast and the east part of the Gulf Coast.

The west part of the gulf coast has Texas and Louisiana, where particularly, Louisiana, where they do a lot of drilling right now. Sen. Mary Landrieu is very concerned about the state of the coastal areas there and she would like to have more money from the royalties for oil and gas drilling on the offshore to be able to pay to help restore some of those coastal lands.

What she has proposed is that states, other coastal states that are under moratoria right now, be allowed to decide whether they want to remove the moratoria for their offshore lands. And that has caused some consternation in Florida, where the two senators in Florida are very afraid of what that means for their state. They do not want any oil or gas drilling anywhere near Florida’s waters and so they picked today to take that fight to the floor.

JEFFREY BROWN: This is one of the ways we see in which an energy bill is not just about traditional Republican versus Democrat. This is geography.

MARY O’DRISCOLL: Energy bill knows no political boundaries. It is all regional.

JEFFREY BROWN: Jason, what about on the consumption and conservation side? What stands out in the bill?

JASON GRUMET: I think, Jeff, you really have to think about the energy bill as both an electricity bill and a transportation bill. So when it comes to electricity, there are provisions, important provisions that would protect against the kind if cascading blackout that we had years ago. There are significant provisions a lot of leadership from Sen. Alexander and others, to try to promote more natural gas production, both domestic production, also bringing LNG into this country.

And then there are some very significant efforts to the electricity renewable technology side so that we have more renewable power — wind power, solar power. There are significant tax credits. There’s also a very hotly debated provision that would actually obligate the electric generating sector to start to have an ever-greater percentage of their power generated by these renewal resources. So there’s quite a bit of both supply and demand on the electricity side.

Now, when you turn to transportation, to our automobiles, very significant provisions there as well; there is a large effort under way to try to diversify our fuel by having more domestically produced bio fuels, commonly thought of as ethanol. So, there’s a provision that would require eight billion gallons of ethanol and bio diesels and others over the next decade or so. That’s a very big deal.

Put in context, we use about 20 billion barrels a day of oil. This would be roughly about 5 percent of displacement, but it’s still a very significant step. I think the one glaring absence in the energy bill right now is a serious effort to deal with vehicle fuel economy.

JEFFREY BROWN: That’s what I was going to ask you about. That’s not there.

JASON GRUMET: Vehicle fuel economy in this country has been stagnant since 1985. We are lagging the world. We are now seeing gasoline at over $2 a barrel. It is projected that fuel use in the United States, gasoline use, will grow by 50 percent over the next 20 years when the Chinese and Indians, the 2.4 billion Chinese and Indians join us in the gas lines.

There’s going to be tremendous upward pressure on gas prices both in terms of the volatility and the absolute price. And so I think you’re starting to see a group of centrist senators come together to try to move something forward, but there is not going to be the significant breakthrough on vehicle fuel economy that I think most people expect.

MARY O’DRISCOLL: And I’d like to add something to that because there may be an effort to do that in Senate, but it certainly isn’t going to go anywhere in the House.

JEFFREY BROWN: Just another place where whatever happens in the Senate has to go to the House.

MARY O’DRISCOLL: Just another place, where whatever — Exactly, exactly. And I don’t think it’s likely to survive. And it’s an interesting thing that you mention that, with the rising oil and gas prices right now, you know, they’re using the rising oil and gas prices in the summer to, you know, show that we need to do something about energy because prices are so high, but you have to remember, this energy bill isn’t going to do anything to cure high energy prices right now.

If President Bush signed the bill tomorrow, that would do nothing to lower prices. This is a first step in a long, probably five, ten, fifteen-year process, where they’re going to try to introduce new technologies for motor vehicle fuels and motor vehicle — new technologies for hybrid cars, fuel cell cars, that kind of thing. Nothing is going to help anything for the next five to 10 years.

JASON GRUMET: As Mary said, and this is one of the real political challenges here as well, there’s a lot of negative momentum in our energy system. Every year we get more and more dependent on oil, every year greenhouse gases go up. And to bend that system, it’s almost like turning the super tankers that the very energy we use comes on. There could be tremendous activity in the Congress, but it’s going to take a number of years before you’re going to start to see our greenhouse gas emissions decline, our oil dependence start to decline.

And so what we really need is the courage of the Congress and the president to point forward on a long-term national strategy. They’re not going to be able to go back to their districts in two years and say, “I got you this.” What they’re going to be able to do is tell their grandchildren that “I made the difference that started to address oil expense dependence. I helped make the difference that started to address climate change.” And so it’s a deeper kind of political commitment.

MARY O’DRISCOLL: But once again I think they get themselves in a real pickle. I noticed several times today in the debate on the Senate floor, that they said the gas prices today are so high, and I think when they really start over promising that they’re going to get lower prices in right away, that that’s what it sounds like to the average person. It’s just not going to happen.

JEFFREY BROWN: This is a “how Washington works” question because so much of that is behind this, but why is it so hard to pass energy legislation?

JASON GRUMET: I think you can attribute — they’re complicated questions, just technically complicated questions. As Mary pointed out, there are tremendous regional differences between what the coasts produces and needs and what the Midwest wants and the oil patch wants.

And then there is this problem of political credit. We’re not putting 100,000 cops on the street. You’re making fundamental changes in a $600 billion energy industry, the benefits will be diffuse. The people who have to pay for those changes are concentrated so it’s a classic, special interest, private good, versus broad, multi-decade, public good battle, and it’s very hard to make those kinds of equations come together.

But I do think that the president has said this is a priority, and while there are real differences between the House bill and the Senate bill, I think Chairman Barton is also anxious to move something. The Congress has basically moved forward by having the House pass last year’s bill and challenge the Senate, saying we’ll see you in conference.

JEFFREY BROWN: Are you as optimistic?

MARY O’DRISCOLL: We’ll see what happens. I saw this two years ago and really thought that they were actually going to pass it then. So, I’m not making any more predictions on Congress. I think it’s one ever those things, energy policy is such a balance you have to really give something to each region of the country and hope it all holds together and be able to have the political will to keep it holding together. So, if they can do that, they may just get a bill passed this time and I’ll be out of work.

JEFFREY BROWN: All right. We will watch over the next couple of weeks and we’ll come back to the issues on this program. Mary O’Driscoll and Jason Grumet, thank both you very much.

JASON GRUMET: Thank you.

MARY O’DRISCOLL: Thank you.