Re-energized: The Senate will Renew Debate on the Energy Bill

On May 26, 2005, the Senate Energy and Natural Resources Committee approved a comprehensive energy bill almost unanimously. The vote was 21-1, with Democrat Ron Wyden of Oregon as the lone dissenter.

Wyden argues that the bill does nothing to address fuel efficiency or global warming and that it will raise gasoline prices even higher. But other committee members concerned about those issues plan to work them out on the Senate floor.

In fact, the solid support of the bill may not last for long. Senators on both sides of the aisle are expected to add amendments that will make the legislation more controversial, including measures concerning offshore drilling, electricity regulation, and liability waivers for producers of methyl tertiary butyl ether (MTBE) - an issue that helped to sink the energy bill last time.

Unresolved issues

Committee members decided to exorcise the energy bill’s demons on the Senate floor, so the debate promises to be exciting.

#1 Offshore drilling

Offshore drilling tops the list of most contentious issues. The bill approved by the Energy Committee already allows for an inventory of oil and gas resources on the Outer Continental Shelf, the underwater zone between state and federal waters. Opponents say that taking inventory is one step closer to new drilling, which environmentalists say could damage oceans and beaches.

During the debate, Energy Committee Chairman Pete V. Domenici (R- New Mexico) and Mary Landrieu (D- Louisiana) may offer amendments that would encourage states to opt out of the federal moratorium on offshore drilling. But Domenici and Landrieu face an uphill battle since the moratorium has considerable public support and has been backed by presidents for the last twenty-four years, from Ronald Reagan right up through George W. Bush

Senators in favor of development argue that cash-strapped states could benefit from the oil and gas resources in their jurisdiction. Rising gas prices help support the argument.

#2 Electricity regulation

Senator Domenici has been under pressure to repeal the Public Utility Holding Company Act (PUHCA), a 1935 law that prevents large utility companies from subsidizing unregulated side businesses with profits from regulated utilities. The depression-era law was enacted in response to the shady business practices of huge holding companies that controlled utilities in complex pyramid structures, where a few investors at the top held most of the shares of many subsidiary companies. In the early 1930s, three holding companies controlled almost half of the utility industry, resulting in inflated rates for consumers.

But energy companies say that the law is outdated and hampering competition and investment in the electricity sector. Opponents warn that repealing the law could result in a wave of mergers, with high utility prices as the end result.

If PUHCA is repealed, Democrats demand that the Federal Energy Regulatory Commission (FERC) oversee mergers and consider their effect on utility fees. But some Republicans are afraid that this would give FERC too much authority; they’re likely to argue that FERC would be hampering free enterprise.

#3 MTBE

MTBE is a petrochemical that helps gasoline to burn more cleanly, but it also pollutes groundwater.

During the last congressional session (the 108th) Senator Barbara Boxer (D-CA) argued against protecting MTBE manufacturers from pending lawsuits over contamination.

Boxer explained that MTBE spills have polluted most of the country, including the drinking water. Boxer’s home state of California has been the most affected, with at least 97 drinking-water sources infected.

The San Francisco Chronicle reported that nationwide cleanup costs are estimated at $29 billion. Despite the expense, the provision prohibits communities from suing MTBE manufacturers for damages.

108th argument

Domenici, the 2004 energy bill’s sponsor, argued that it would be ridiculous to sue chemical producers for product spills. He explained that the manufacturers are not responsible for the underground storage tanks that have leaked MTBE into the water.

In addition, Domenici contended that the government mandated the manufacture of MTBE in 1990 as part of the Clean Air Act. The law requires the production and use of a gasoline additive in order to cut air pollution. From his point of view, it is unfair to sue MTBE makers because it is the US government that requires its manufacture.

The bill’s opponents argued that the government did not authorize the manufacture of MTBE specifically. Rather, the Clean Air Act requires the production of an oxidant in general, and that oxidant could be corn-based ethanol or another additive. MTBE opponents believe that the chemical is defective and that its producers are liable because they failed to warn the public of its dangers.

What do you want in your energy bill?

Now is the time to contact your representatives about the energy bill. Would you like to see stricter fuel-efficiency standards? More renewable energy? Drilling off of the coast of your state to bring in revenue?

What do you think?

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Article Posted on: 6/1/2005