The energy bill nearing passage in Congress, promoted by the Bush administration as an important step toward making the U.S. less reliant on foreign oil, would do little in the short term to boost the nation's energy independence or provide relief for motorists paying record gasoline prices, analysts said Wednesday.
The U.S. petroleum industry, already enjoying record profits from skyrocketing oil and natural gas prices, lobbied aggressively for the legislation and received billions in tax breaks and other incentives partly designed to encourage drilling projects.
But based on those incentives alone, the industry is unlikely to start sinking new wells -- projects that require years of development before they add fresh oil and gas to the market, experts said.
"The energy bill is not going to make a meaningful difference in U.S. supplies," said Steve Enger, an analyst at Petrie Parkman & Co., an energy investment bank in Denver.
The bill, the first overhaul of national energy policy in more than a decade, is expected to be approved by the House of Representatives today and the Senate on Friday. President Bush, a former Texas oilman, has pushed for the energy bill since taking office in 2001 and is expected to sign it.
Some critics say the legislation represents a giveaway to the energy industry.
With crude trading near $60 a barrel, oil companies "don't really need much more encouragement" to launch exploration projects, said Rick Mueller, senior oil analyst at Energy Security Analysis Inc. "Companies already are looking anywhere they can to find additional barrels."
Moreover, the energy legislation wouldn't do much to quench America's thirst for oil. Rising demand in the U.S. -- the world's biggest consumer of petroleum -- as well as in China, India and elsewhere has been a major factor in keeping global oil markets tight and pump prices high.
"There's very little in the bill, really, to address that," Mueller said.
Even Energy Secretary Samuel Bodman cautioned Wednesday that motorists should not expect a quick decline in gasoline prices.
"There are no magic bullets in this law that will change energy prices in the next day, week or month," Bodman told reporters. "It's going to take a number of months, if not years, to deal with energy prices."
The bill's $11.5 billion in tax breaks over 10 years are not just aimed at generating more oil and gas supplies. They also include the first-ever production tax credit for nuclear power companies, as well as measures to promote conservation and energy efficiency.
