Bush Signs Energy Bill Into Law to Mixed Reviews

ALBUQUERQUE, New Mexico, August 8, 2005 (ENS) - "The Energy Policy Act of 2005 is going to help every American who drives to work, every family that pays a power bill, and every small business owner hoping to expand," President George W. Bush said today, as he signed the energy bill at Sandia National Laboratory in Albuquerque.

But House Democratic Leader Nancy Pelosi said, "As oil prices reached another new high today, President Bush signs into law an energy policy that his own Department of Energy says actually increases gas prices."

President Bush stressed the "unprecedented commitment to energy conservation and efficiency" made in the bill, which sets higher efficiency standards for federal buildings and for household products, the bill relies heavily on coal and nuclear energy.

President George W. Bush at Sandia National Lab today for the energy bill signing ceremony. In the background is Energy Secretary Samuel Bodman. (Photo courtesy DOE)

"The challenge is to develop ways to take advantage of our coal resources while keeping our air clean," said Bush. The bill authorizes new funding for clean coal technology with the goal of building the world's first zero emission coal-fired power plant.

The United States has 103 operating nuclear power plants, but has not built a new nuclear plant since the late 1970s. "We will start building nuclear power plants again by the end of this decade," the President said.

"To coordinate the ordering of new plants, the bill I sign today continues the Nuclear Power 2010 Partnership between government and industry. It also offers a new form of federal risk insurance for the first six builders of new nuclear power plants," Bush said.

The Bush administration and Congressional Republicans took care to avoid mentioning the stalled nuclear waste repository at Yucca Mountain, Nevada as moved the energy policy bill forward, a senior Energy Department official told the "Las Vegas Review Journal" on Friday.

The strategy was to avoid stirring Senate Minority Leader Harry Reid of Nevada, a leading critic of the proposed nuclear waste repository who could have caused problems for the bill, one of President Bush's top priorities, said DOE Deputy Secretary Clay Sell.

"Energy politics are tough. Yucca Mountain politics are really tough," said Sell, who called Reid "a tough character to deal with."

"There was a conscious decision not to roll [Yucca Mountain] into the energy bill, and I can't disagree," Sell said.

Nevada Senator Harry Reid, together with the rest of the Nevada Congressional delegation and Nevada Governor Kenny Guinn, is opposed to the Yucca Mountain nuclear repository. They contend it will not safely contain the nation's nuclear waste. (Photo courtesy Office of the Senator)

“Unfortunately, House Republicans working on the final version of the bill rejected the provisions that would have led us towards energy independence, and I will not support this version of the bill," said Reid. “I believe we have missed an incredible opportunity to establish a renewable electricity standard, provide help to consumers facing record prices at the gas pump, and most importantly, to reduce our dependence on foreign oil.”

The legislation pleased Skip Bowman, president and chief executive officer at the Nuclear Energy Institute, who represented the nuclear energy industry at the signing ceremony. "As a result of this legislation we have many of the tools necessary to move forward to new nuclear power plant construction in this country, along with pursuing the potential for the hydrogen economy, protecting our security though enhanced non-proliferation policies, and contributing to better public health and our environment by limiting air emissions."

The energy bill streamlines oil and gas permitting to encourage new exploration in what the President says will be "environmentally sensitive ways."

The bill authorizes research into extracting oil from shale and tar sands. It provides incentives for oil refineries to expand their capacity, and Bush says "that's consumer-friendly. The more supply, the more reliable your gasoline will be and the more - less pressure on price."

The bill includes tax incentives to encourage new construction of natural gas pipelines and clarifies federal authority to site new receiving terminals for liquified natural gas.

A wind turbine is installed at the National Wind Technology Center, a facility at the National Renewable Energy Lab in Golden, Colorado. (Photo courtesy NREL)

"By developing these innovative technologies," the President said, "we can keep the lights running while protecting the environment and using energy produced right here at home. When you hear us talking about less dependence on foreign sources of energy, one of the ways to become less dependent is to enhance the use of renewable sources of energy."

The legislation includes language that would create an industry-led, self-regulatory organization that will set and enforce mandatory electricity reliability standards throughout North America.

"The bill removes outdated obstacles to investment in electricity transmission lines in generating facilities," said President Bush. "The bill corrects the provision of the law that made electric reliability standards optional instead of mandatory."

The bill directs the federal Transportation Department to study improvements in fuel-efficiency standards for cars and trucks and SUVs, but does not set new efficiency standards.

The legislation will provide up to $3,400 per vehicle in tax credits to consumers for purchase of energy-efficient hybrid, clean-diesel, and fuel-cell vehicles based on their fuel savings potential.

The bill also expands research into developing hydrogen technologies and establishes a flexible, national Renewable Fuels Standard to encourage greater use of renewable fuels like ethanol and biodiesel.

Senator Jeff Bingaman of New Mexico, a Democrat who co-chairs the Senate Energy Committee with fellow New Mexican Republican Pete Domenici, said the bill will help Native Americans. The bill creates an Office of Indian Energy Policy & Programs at the Department of Energy that will use grants, technical assistance, and loan guarantees to assist Pueblos and Tribes with the production of energy resources; increasing the supply of electricity to Indian homes and businesses; and managing energy development and use in a manner that protects tribal lands and communities.

"This new energy policy will give Indian Country a voice at the Department of Energy and will help tribes cut through the bureaucracy that has held up energy development on Indian lands," Bingaman said. "This is a major step forward."

While Republicans and some Democrats were pleased with the Energy Policy Act of 2005, other Democrats and environmentalists were less pleased.

House Speaker Dennis Hastert of Illinois supported the ethanol provisions of the energy bill. Here he inaugurates the National Corn-To-Ethanol Research Center at Southern Illinois University Edwardsville. September 23, 2003. (Photo courtesy Office of the Congressman)

Congresswoman Pelosi said, "This energy policy is yet another example of Republicans catering to corporate special interests at the expense of the public interest. Billions of dollars are going to the oil, gas, and nuclear industries and nothing is going to consumers paying more at the pump.

"Democrats are fighting for an energy policy for the future that will reduce gas prices, reduce our dependence on foreign oil, and reduce pollution," she said.

Jeff Rickert, executive director of the Apollo Alliance, a new coalition of foundations, business, labor, environmental, social justice and faith-based organizations, said the legislation, "hands over billions in subsidies to oil companies but does nothing to reduce our dependence on foreign oil."

"The Energy Bill represents a failure of leadership by the administration and leadership in Congress," said Rickert. "We urgently need a crash program to move America toward energy independence, while capturing the green markets of the future. In the absence of federal leadership, states and cities are taking on this issue, and for now our hopes for progress will rest there."

New Mexico Congressman Tom Udall, a Democrat, said the bill is not flawless, but it is an improvement over the status quo. "I am pleased that the bill does include renewable energy and energy efficiency incentives. However, I would have written a more ambitious bill that would have more aggressively reduced our reliance on foreign oil, addressed global warming, added tough automobile fuel efficiency standards, and revitalized the nation's railroads."

International Brotherhood of Electrical Workers International President Edwin Hill said the legislation "represents a crucial first step in unifying the nation's haphazard energy policy, and presents real opportunities for broad cooperation on the road to common-sense energy reform."

Edwin Hill heads the International Brotherhood of Electrical Workers International (Photo courtesy IBEW)

"After several years of squandered opportunities, the United States finally has set a clear path to address the nation's inadequate energy infrastructure," Hill said.

The IBEW is pleased with language in the bill that calls for raising the penalty for manipulating the electricity market, as Enron traders did during the California deregulation crisis from $5,000 to $1 million per violation.

The grassroots group Republicans for Environmental Protection wanted an energy bill that would "Raise fuel economy standards for cars and SUV's to 40 miles per gallon over the next decade - thereby saving more than 15 times the estimated yield of the Arctic National Wildlife Refuge, saving fuel America must now import and saving drivers billions of dollars at the pump."

REP America also wants the Bush administration to "Take global climate change seriously by capping carbon dioxide emissions (as pledged in the presidential campaign) and increase the use of natural gas as the "bridge" to a clean energy future."

After the signing ceremony at Sandia National Laboratory, officials talk with the President. (from left:) Senator Jeff Bingaman of New Mexico, unidentified, Energy Secretary Samuel Bodman, President Bush, Senator Pete Domenici of New Mexico. (Photo courtesy Sandia)

"Growing oil dependence. Soaring gas prices. Destructive energy development. Huge subsidies for polluters. Global warming. Not one of these problems is seriously addressed in the energy bill," said NRDC Legislative Director Karen Wayland.

"Because Congress blew it, we'll remain dependent on oil and we'll keep paying high prices at the pump," she said. "Even though 'comprehensive' energy legislation only happens every ten years or so, our nation can't wait another decade before Congress decides to get serious about addressing the issues sidestepped by this industry boondoggle of a bill."

Robert Catell, chairman and CEO of the publicly traded KeySpan Corporation, the largest distributor of natural gas in the Northeast, today praised elements of the Energy Policy Act of 2005. "It will help to ensure the supply and reliability of natural gas and electric power in a consumer-friendly and environmentally beneficial manner."

Catell likes the provision for federal judicial review of state decisions on major infrastructure projects, which he says will promote construction of critically-needed pipelines and LNG facilities. "This could expedite the development of the Islander East pipeline," said Catell, "which will transport natural gas from Connecticut to Long Island, currently delayed by a single pending permit from the state of Connecticut."

Efficiency Incentives for Consumers

In The Home:

• Consumers can receive a credit of up to 30% of the cost, or up to $2,000, for installing solar-powered hot-water systems used exclusively for purposes other than heating swimming pools and hot tubs.
• Consumers can receive tax credits up to $500 on the amount they spend to upgrade thermostats, to caulk leaks, or to stop energy waste.
• Consumers can receive up to $200 credit for installation of new exterior windows.
• Consumers can receive up to $300 credit for purchases of a highly efficient central air conditioner, heat pump or water heater.
• Consumers can receive up to $150 for installation of a highly efficient furnace or boiler.
• A new provision provides a 10% investment tax credit for expenditures with respect to improvements to building envelope. This allows credits for purchases of advanced main air circulating fans, natural gas, propane, or oil furnaces or hot water boilers, and other qualified energy efficient property.
• Tax credits for contractors who build energy-efficient homes and manufacturers who make energy-efficient appliances could lower prices for consumers.

• Starting in 2006, hybrid-car buyers and advanced lean-burn technology vehicles will be eligible for tax credits ranging from $1,700-$3,000. This credit is tied with two components: hybrids that save the most fuel compared with 2002 models, and the vehicle’s estimated lifetime fuel savings.
  
• The amount of credit for the purchase of a fuel cell vehicle is determined by a base credit amount that depends up on the weight class of the vehicle and in the case of automobiles or light trucks, an additional credit amount that depends upon the rated fuel economy of the vehicle compared to a base fuel economy.
  • For fuel-cell-powered vehicles weighing less than 8,500 pounds, for instance, the base credit will be $8,000 - heavier vehicles will get bigger credits.
  • Credits are offered for cars and light trucks that are more fuel-efficient than 2002 models. A tax credit gives the taxpayer a dollar-for-dollar reduction in his or her taxes.
• A provision permits taxpayers to claim a 30% credit for the cost of installing clean-fuel vehicle refueling property to be used in a trade or business of the taxpayer or installed at the principal residence of the taxpayer. Under the provision, clean fuels are considered any fuel at least 85% of the volume of which consists of ethanol, natural gas, compressed natural gas, liquefied petroleum gas, and hydrogen and any mixture of diesel fuel and biodiesel containing at least 20% biodiesel. This provision is effective for property placed in service 12/31/2005 and before 01/01/2010.