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Republicans Agree on a Sweeping Energy Bill

The measure includes billions in tax breaks for fuel production and for conservation but drops Bush's arctic drilling proposal. A Senate fight is promised.

November 15, 2003|Richard Simon | Times Staff Writer

WASHINGTON — Congressional Republican negotiators agreed Friday on the first overhaul of national energy policy in more than a decade, bringing President Bush closer to a victory on a top priority heading into the 2004 presidential campaign.

The agreement bears the fruit of a nearly three-year effort launched by Bush during the California energy crisis to produce comprehensive energy legislation. The approximately 1,700-page measure, written behind closed doors, includes a number of the recommendations made by the 2001 White House energy task force headed by Vice President Dick Cheney.

Among the bill's major provisions are tax breaks worth between $16 billion and $20 billion to promote domestic production of oil, natural gas, coal and nuclear energy and encourage energy conservation and development of alternative sources such as wind power.

The bill drops President Bush's proposal to open Alaska's Arctic National Wildlife Refuge for drilling.

For lawmakers who wanted to be seen as doing something about last summer's Northeast blackout, there are new rules aimed at strengthening the electric grid. The bill includes incentives for building a pipeline to transport Alaskan gas to the lower 48 states. And it would mandate greater use of corn-based ethanol in the nation's gasoline supply, a popular provision among farm-state lawmakers.

Sen. Pete V. Domenici (R-N.M.), who presided over the negotiations as chairman of the Senate Energy and Natural Resources Committee, said he hoped to see the bill clear Congress and reach the president's desk before Thanksgiving.

The legislation's approval is less than certain, however. First it must clear a House-Senate conference committee, whose minority Democrats have complained bitterly about their exclusion from the negotiations.

Next it would go to the full House, which is expected to pass the bill easily, and the Senate, which is not.

In the closely divided Senate, many Democrats who complain that the bill favors production over conservation have hinted at trying to block it with a filibuster. They could be joined by Republicans displeased with the bill's cost -- as much as $100 billion over 10 years -- and a provision that would limit the liability of manufacturers of a fuel additive blamed for contaminating water supplies from California to New Hampshire.

Sen. Charles E. Schumer (D-N.Y.) called the bill a "grab-bag of goodies for special interests" and said it should be "stopped in whatever way possible." But other Senate Democrats reportedly remained undecided about whether to try to kill the measure.

The bill denies ex-oilman Bush one of his top priorities: the opening of the arctic refuge to oil and gas drilling. And it carries a much higher price tag than he had wanted.

But Bush, who has called the energy policy critical to economic growth and national security, welcomed the agreement. "America will be safer and stronger with a national energy policy that will help keep the lights on, the furnaces lit and the factories running," he said in a statement.

Republican leaders, intent on delivering Bush a victory, packed the bill with provisions eagerly sought by lawmakers from both parties. "This is in essence a jobs bill," said House Energy and Commerce Committee Chairman W.J. "Billy" Tauzin (R-La.).

With details of the bill not due to be released until today, Sen. Jeff Bingaman of New Mexico, the top Democrat on the Senate Energy and Natural Resources Committee, said he would look to see if "on balance, there is more good in it than bad." But he said that the provision to limit the liability of manufacturers of the fuel additive methyl tertiary-butyl ether, or MTBE, would give "heartburn" to a number of a senators.

Bingaman, who was among those shut out of negotiations, said: "I think we're being asked to take it or leave it."

Others didn't wait for the details before condemning the bill.

"This bill falsely presumes that we can drill and strip-mine our way to energy independence," said Rep. Edward J. Markey (D-Mass.).

Like the last major energy bill, passed in 1992, this measure is aimed at reducing U.S. dependence on foreign oil, especially from the politically unstable Middle East. But experts disagree over how much of a dent the measure would make in oil imports, which account for more than half of U.S. oil consumption -- up from 36% during the 1973 Arab oil embargo.

Critics note that the legislation fails to increase fuel economy standards for vehicles. Proposals to increase mileage have faced resistance from both Republicans who abhor more government regulations and Democrats who represent vehicle-producing states.

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