Republican congressional leaders announced Friday an agreement on a sweeping energy bill that is expected to provide tax breaks to oil and gas companies and open up far more land to drilling, but will protect the Arctic National Wildlife Refuge.
The bill is also expected to offer tax credits to build a natural gas pipeline from Alaska to Chicago and create incentives to build nuclear power plants. In addition, the legislation is likely to establish an organization to write rules for utilities to help prevent catastrophic blackouts.
But despite their dramatic announcement, GOP leaders released few details, and several congressional sources said there is still some question about whether even Republicans are completely satisfied with the package. The full text of the legislation was to be released Saturday.
Republicans have been struggling for months to produce an energy bill that at least GOP lawmakers in the House and Senate can support. Negotiations have bogged down several times, however, over an array of issues, including how to create tax incentives for ethanol–a fuel additive derived from corn–and who should pay for upgrades to the national electric transmission grid.
Since this summer’s blackouts swept through New York and the Midwest, the White House and GOP congressional leaders, who excluded Democrats almost entirely from the talks, have felt particular pressure to reach a deal. Senate Majority Leader Bill Frist (R-Tenn.), House Speaker Dennis Hastert (R-Ill.) and even Vice President Dick Cheney have personally intervened to salvage an agreement.
`A most difficult, difficult job’
On Friday morning, the Senate Energy Committee sent an e-mail to reporters headlined “Ladies and gentlemen, we have a deal!” But at an afternoon news conference, few details were given on what the deal includes.
“We have succeeded,” proclaimed Sen. Pete Domenici (R-N.M.), the committee chairman. “A most difficult, difficult job, but we have put it together.”
Rep. Billy Tauzin (R-La.), chairman of the House Energy and Commerce Committee, said the plan will create thousands of jobs and boost the economy.
“This bill will put a stop to the job losses that make it difficult for this economy to recover,” Tauzin said.
No drilling in Alaskan refuge
Tauzin and Domenici confirmed that the bill will not open the Arctic National Wildlife Refuge for oil and gas exploration, an issue that was a lightning rod for opposition from Democrats and environmental groups. Democrats and moderate Republicans were expected to filibuster the bill if it allowed drilling in the Alaskan refuge, and could likely have killed it.
And Domenici said the bill’s authors lacked the votes in both chambers to establish new fuel efficiency standards for cars and trucks, a priority for Democrats and environmental groups. “We can’t do what can’t be done,” he said.
The measure is expected to include about $20 billion in tax incentives for production of nuclear energy, renewable fuels and natural gas, as well as incentives for consumers to purchase energy-efficient appliances.
Sen. Jeff Bingaman (D-N.M.), the top Democrat on the Senate Energy and Natural Resources Committee, said he was not allowed to join the negotiations and Republicans provided him with no details of the plan.
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“We’re being asked to take it or leave it,” Bingaman said.
Even with the arctic refuge left alone, Democrats were already considering whether they will try to kill the legislation they still have not seen.
“This bill should be stopped in whatever way possible, and I will be checking with my colleagues to see if we have the support to do so,” said Sen. Charles Schumer (D-N.Y.) in a statement issued Friday afternoon.
The agreement’s details were scheduled to be released at noon Saturday, giving Democrats 48 hours before official approval of the deal by a House-Senate committee. The House is expected to vote on the bill Tuesday and the Senate Wednesday, though events could still torpedo the legislation before then.
The bill is likely to pass the Republican-dominated House, but the real fight is expected in the Senate. The outcome is unclear, partly because some Senate Republicans have expressed concerns over the bill.
Sen. Charles Grassley (R-Iowa), a key figure in the energy debate especially regarding tax issues, did not appear at the news conference and did not immediately endorse the deal. A Grassley staff member said the senator is waiting for GOP leaders to resolve a few issues.
Sen. Arlen Specter (R-Pa.), a moderate Republican, sent a letter to Domenici this week saying, “There are a number of specific issues that concern me about the direction the conference has taken.”
In particular, Specter said he was concerned that the bill appears to have cut a provision requiring 10 percent of the nation’s electricity to be generated using renewable fuels, such as wind and solar power.
Specter also raised concerns over a measure eliminating the liability of manufacturers of MTBE, a natural gas-based fuel additive that has contaminated groundwater in some areas. The additive is being phased out, but environmental groups and several states have argued that manufacturers should be held liable for cleanup costs.
Makers of the additive said they produced a safe, legal product and should not be held at fault if customers improperly handled or stored the product.
Environmental groups rip plan
Even before seeing the final package, environmental groups attacked the bill as a giveaway to energy companies.
“This is an all-you-can-eat buffet for the oil, coal and nuclear industry at the expense of the environment,” said Adam Kolton, legislative director of the National Wildlife Federation.
Karen Wayland, legislative director for the Natural Resources Defense Council, said, “Rather than put America on the path to energy security, the bill rewards polluting energy companies with billions in subsidies while sticking taxpayers with the bill.”
And even some industry groups expressed doubts.
Marc Yacker, director of the Electricity Consumer Resource Council, an association representing General Motors, Intel and other companies that use large amounts of electricity, said, “We don’t see a lot of benefits for industrial or residential consumers in terms of providing them with lower cost, more reliable electricity.”