Energy War and Peace

Just before press time, the national energy bill proponents failed to force a vote on the legislation, leaving its fate in limbo. The attempt at cloture on November 21, which would have cut off debate on the bill, failed to muster the needed 61 votes. The vote was 57-40. California's two senators were on the side of the filibuster, along with seven Republicans. Majority leader Bill Frist (R-Tennessee) said he would push for a vote next week. Tackling the federal energy tome felt much like cracking Leo Tolstoy?s War and Peace . And once again, I longed for Cliffs notes. Besides being dense pieces, both oeuvres, whose writing styles are not readily comparable, have more in common than one would think. But unlike the days of yore when I read the Russian classic, I had little time to work my way through HR 6, just like the Democratic lawmakers who only saw the bill?s language November 15. Almost half of the bill had been rewritten since lawmakers were last able to digest it. Both the Energy Policy Act of 2003 and Tolstoy?s masterpiece involve high stakes and a lot of drama. Both works focus on a select few families during wartime. (Although in this case, the war is not in our backyard.) In place of Tolstoy?s aristocrats and peasant families during the Napoleonic wars, the energy act focuses on a select wealthy few: the oil, gas, coal, and nuclear families and some plebian renewables and conservation clans. In both classics, someone?s pain is another?s gain. It is ?a giant boondoggle to special interests, particularly the ethanol, MTBE, oil, gas, and nuclear power interests,? said Senator Dianne Feinstein this week. Senator John McCain (R-Arizona) called it ?the Leave No Lobbyist Behind Act.? The pending act includes tax breaks, subsidies, and grants of more than $31 billion over the next four years, according to the Congressional Budget Office. However, when authorized spending is factored in, the figure balloons to $96 billion over the next decade, concluded Taxpayers for Common Sense. ?The CBO numbers are unintentionally smoke and mirrors,? said Keith Ashdown, spokesperson for the coalition of taxpayer groups. California and nearby states, along with Northeastern lawmakers, who sought a filibuster to waylay a vote on November 21, oppose the bill because of its huge costs, a quarter of which goes to the oil and gas industry. Southern and Midwestern legislators, whose states stand to reap much of the bill?s benefits, are pushing for passage and scheduled a cloture vote to force a decision on the bill on November 22. ?It is more of a regional battle than a partisan one,? Michael Mariotte of the Nuclear Information and Resource Service (NIRS) said. California taxpayers would be on the hook for environmental cleanup costs of groundwater contamination by the gasoline additive MTBE and oil and gas exploratory drilling on public lands. In 2002, there were more than 100 drilling permits and nearly 100 new wells in California, according to the House minority Committee on Government Reform. Those of us in the land of cars will pay higher gas prices if the ethanol mandate sees the light of day. The thick legislation also includes provisions that would ease environmental permitting of energy development on public lands in this and other Western states. Royalty payments from energy developers using federal lands would be reduced. Protections against Enron-style market manipulations would remain elusive, hydropower relicensing provisions would be detrimental to aquatic protections at the huge numbers of dams along California?s rivers, and the state coastlines would be more prone to offshore drilling. After speed-reading the hundreds of pages of text Republicans worked out behind closed doors?called by detractors a continuation of the secret process of Vice President Dick Cheney?s energy task force?the Democratic minority offered 20 substantive amendments this week. Not one of them appeared in the conference report passed by the House November 18. The bill is ?a failure of process? of justice and principle, said Representative Henry Waxman (D-Los Angeles). ?It tramples states? rights, punches holes in the Clean Water Act and Safe Drinking Water Act, gives away billion of dollars in special interest pork, and establishes massive pro-pollution subsidies and incentives,? noted the minority report. HR 6 would not reduce our dependence on foreign oil largely because there are no gasoline economy standards imposed on automakers. Reducing gas consumption of hummers and other gas-guzzling vehicles is estimated to save the country 1 million barrels of oil a day, reducing petroleum imports by 10 percent. That would also reduce the amount of carbon dioxide emissions by 240 million tons a year, making many power plant emissions in the state look like small potatoes. While oil, gas, coal, and nuclear industries would rake in the bucks, the renewables portfolio standard that would require utilities to boost their green power supplies remained on the cutting-room floor. The oil and gas industry would be fattened with nearly $22 billion, and coal interests would get $7.9 billion, according to the taxpayer association. The nuclear industry would get $7.5 billion from taxpayers and another $1.1 billion to build new nuclear reactors that would produce hydrogen fuel, estimated the NIRS. Thrilled with the bill, the Nuclear Energy Institute said, ?Significantly, this far reaching legislation strongly supports continued reliance on nuclear energy.? Up to $1.8 billion in grants would be available to utilities to buy and build coal-burning technologies. While environmentalists cried loudly over the bill?s slings and arrows, it wasn?t all bad news for them. Of the money taken from taxpayers? pockets, $8 billion would be used for energy efficiency and conservation. Production tax credits for renewables producers, set to expire at the end of this year, would be expanded and extended. Geothermal and biomass energy generators would be eligible for the production credit of $0.018 per kilowatt-hour for five years. New wind projects that come on line in the next three years would be able to collect the credit over the next ten years. All types of biomass are now eligible for subsidies. Previously, biomass subsidies were limited to a very narrow subset that burned trees and grass grown specifically for biomass production. Also included is a $50 million grant for biomass that would be used to thin, not remove, trees in forests for fuel purposes. The bill puts the Federal Energy Regulatory Commission?s market redesign on the back burner for three years and delays creation of regional transmission organizations. The block was urged by Southern and Northwestern states that didn?t want to get near anything that smelled like California?s deregulation fiasco. ?It is unwise given the critical need to move forward with regional wholesale market development that maximizes reliability and minimizes efficiencies and transaction costs for consumers,? countered Lynne Church, head of the Electric Power Supply Association. Who Gets What * Figures provided for each sector below are listed in order of tax provisions, then authorized spending amounts. Oil and gas: $8.86 billion, $12.97 billion Coal: $2.5 billion, $5.43 billion Nuclear: $1.6 billion, $5.7 billion Utilities: $1.3 billion, $1.3 billion Renewables and conservation: $4.9 billion, $4.1 billion Efficiency: $4.9 billion LIHEAP & Weatherization: $11.4 billion Science R& D: $21.8 billion Hydrogen R&D: $2.1 billion Other: $4.2 billion, $4.6 billion * Courtesy of Taxpayers for Common Sense

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Energy War and Peace

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