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Better Prospects for Energy Bill in the Senate

Under pressure over pump prices, lawmakers are renewing efforts at a policy overhaul. But a standoff over an additive could be a deal-breaker.

June 14, 2005|Richard Simon | Times Staff Writer

WASHINGTON — California's 2000-01 electricity crisis wasn't enough to do it. Nor could the massive 2003 blackout in the Northeast spur Congress to overhaul national energy policy.

But the Senate today begins to try again, with public anger over high gasoline prices increasing the pressure on lawmakers to get a bill to President Bush's desk.

The measure includes provisions designed to increase domestic production of oil, natural gas, coal and nuclear power, to promote conservation and to strengthen the nation's electricity grids.

It would authorize millions of dollars for energy programs such as rebates to consumers who buy energy-saving appliances and funding for research and development to put 100,000 hydrogen-powered vehicles on the road by 2010 and 2.5 million by 2020. And during debate, senators are expected to add about $11 billion in tax breaks to promote energy production and conservation.

Prospects for the bill's passage have improved for several reasons. Lawmakers from both parties are eager to show that they feel the public's pain at the pumps, even though the bill would do little in the short term to reduce gasoline prices.

It also includes a number of measures that enjoy bipartisan support, such as a requirement popular among farm-state lawmakers to require greater amounts of corn-based ethanol to be added to the nation's gasoline supply.

"There's a been a real spirit of cooperation within the [Senate Energy] Committee that simply was nonexistent two years ago," said Bill Wicker, an aide to Sen. Jeff Bingaman of New Mexico, the top Democrat on the panel. "As a consequence, people have a pretty good feeling that we're going to pass an energy bill in the Senate" by a large margin.

Bush, who has called energy legislation vital to economic growth and national security, is stepping up his efforts to win passage of the measure, a priority since he took office in 2001. He has asked Congress to reach agreement on a final bill before its August recess.

But a considerable hurdle remains: the continuing dispute over whether the government should give legal protections to producers of a fuel additive blamed for fouling water supplies from California to New Hampshire.

In 2003, energy legislation that had passed the House fell two votes short of overcoming a Senate filibuster, largely over the issue of whether to limit the liability of producers of methyl tertiary-butyl ether, or MTBE.

An energy bill that the House passed in April again includes the limitation on liability of producers of MTBE, which has been added to gasoline to help fight smog. One of the provision's major supporters is Rep. Tom DeLay (R-Texas), the House majority leader. Many experts expect DeLay to fight any effort to remove the liability provision from a final bill, as he did in 2003.

But also as in 2003, that could cause the Senate to balk. Republican as well as Democratic senators from states with water contaminated by MTBE oppose the legal shield for its producers, complaining that it would shift the cost of cleaning up contaminated sites from industry to taxpayers.

"MTBE liability sunk the energy bill in the last Congress and is poised to strike again," said an analysis of the bill by investment firm Lehman Brothers, which gives the bill a "less than even chance" of reaching the president's desk this year.

But Roger Berliner, a Washington energy lawyer with Manatt, Phelps & Phillips, said he did not believe that congressional leaders and the White House would let a bill die over the MTBE issue.

It remains unclear how the standoff will be resolved. One possible compromise would be creation of an industry-funded cleanup program similar to the one being considered to deal with asbestos-related lawsuits.

Sen. Pete Domenici (R-N.M.), chairman of the Senate Energy Committee, acknowledged that a solution to the MTBE dispute remained elusive. "If I knew how to do it, we would already do it," he said.

The bill also has drawn opposition from environmental groups. They say it tilts too far toward production over conservation. They complain, for example, that it fails to require stricter miles-per-gallon rules for vehicles. Such a requirement has been defeated in the past by Democrats from automobile-making states and Republicans wary of government regulation.

That underscored how energy issues often divide lawmakers by region rather than party.

The Senate bill includes a directive to the president to implement measures to reduce by 2015 the country's projected demand for oil by 1 million barrels a day.

But a group of Senate Democrats said Monday that they favored a more ambitious goal -- setting a national 20-year goal of cutting projected oil imports for 2025 by 40%.

Currently, the U.S. imports more than 10 million barrels daily.

Other hitches could develop. The $11 billion in tax breaks that the Senate may add to the bill are about $4 billion more than the White House has supported.

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