House passes energy bill favorable to oil interests

Measure opens refuge for drilling, shields MBTE manufacturers from suits

April 22, 2005|By Richard Simon | Richard Simon,LOS ANGELES TIMES

WASHINGTON - Despite concerns about the bill's rising cost, the House passed legislation yesterday sought by President Bush to overhaul U.S. energy policy.

The bill, approved 249-183, would provide tax breaks and other financial incentives to promote domestic production of oil, gas, coal and nuclear energy; authorize drilling in a portion of Alaska's Arctic National Wildlife Refuge; establish rules to ensure the reliability of the electric grids; require greater use of ethanol in gasoline; and extend Daylight Saving Time by two months.

The broad measure also includes $8 billion in tax breaks, mostly for energy producers, and a raft of spending programs, including $8 million to study producing fuel from sugar cane.

On to the Senate

A similar measure previously passed the House but died in the Senate in 2003. The current bill's price tag could create new problems for the proposal as it heads to the Senate.

Some congressional Republicans who have supported President Bush's efforts to overhaul energy policy have expressed concern about the costs, which are likely to grow once senators add their pet causes and projects.

But the bill's proponents say prospects for Senate passage have brightened because of high gasoline prices and last year's election that increased the Senate's GOP majority. Senate leaders plan to begin writing their bill next month.

Bush urged the Senate to move swiftly "so that I can sign a bill into law by August."

There were some defections on both sides in the House, with 22 Republicans voting against the bill and 41 Democrats voting in favor of it.

Many Democrats and some Republicans who oppose the bill said it doesn't do enough to promote energy conservation and disputed the contention that it would achieve its goal of reducing U.S. dependence on foreign oil.

One measure in the bill designed to save energy had bipartisan support: adding two months to Daylight Savings Time. Instead of running from early April to late October as it now does, it would begin the first Sunday in March and go until the last Sunday in November.

House approval of the energy bill came after the Republican majority narrowly beat back a Democratic effort to strip the bill of a controversial provision to limit the liability of manufacturers of a fuel additive blamed for contaminating water supplies from California to New Hampshire.

Supported by DeLay

The legal shield has been championed by House Republican leader Tom DeLay of Texas, whose state is home to several manufacturers of methyl tertiary-butyl ether, or MTBE.

Democrats contend that the energy bill would force taxpayers to pay the cleanup costs.

But the tax breaks and spending measures also have generated concern among some of Bush's usual Republican allies. And taxpayer watchdog groups have now joined environmental groups as among the most vocal critics of the bill.

"Republicans shouldn't be doing this," said Rep. Jeff Flake of Arizona, who was among the Republicans who voted against the bill.

Keith Ashdown of Taxpayers for Common Sense, a nonpartisan watchdog group in Washington, called the bill a "package of pork projects stitched together in a calculated political attempt to secure passage."

His group pegged the bill's price tag over 10 years at nearly $92 billion.

But the bill's proponents disputed that it would cost anywhere close to that, noting that Congress often authorizes money for programs but doesn't always follow through on appropriating it.

Among spending measures in the bill:

Up to $1.7 billion to help MTBE producers retool plants to make other gasoline products once the additive is phased out;

$1.3 billion for an Idaho nuclear reactor that would produce hydrogen;

$750 million to ethanol producers for the construction of production facilities.

A federal loan of up to $125 million to fix problems at an experimental Alaska power plant.

Even Bush has described the tax breaks and subsidies for the energy industry as excessive.

During the debate, Democrats brought to the House floor a chart featuring, in large letters, the Bush comment: "With oil at more than $50 a barrel ... energy companies do not need taxpayers'-funded incentives to explore for oil and gas."

The bill's proponents say the cost of tax breaks and incentives in the bill should be measured against the need to reduce U.S. dependence on foreign oil and prevent fuel price spikes and supply shortages.

The Los Angeles Times is a Tribune Publishing newspaper.

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