U.S. Senate Wrestles With Complex Energy Bill

By J.R. Pegg

WASHINGTON, DC, June 14, 2007 (ENS) - Progress on the Senate energy bill stalled today as lawmakers clashed over a proposal requiring U.S. utilities obtain 15 percent of their electricity supply from renewable energy sources. The dispute left Democrats uncertain if they have the votes to add the provision to the legislation.

At the center of the debate is a plan offered by Senate Energy Committee Chairman Jeff Bingaman, a New Mexico Democrat, requiring the implementation of the 15 percent national renewable electricity standard by 2020.

Utilities unable to meet the standard could buy excess credits from other states or pay the government a penalty of about two cents per kilowatt-hour.

Although 23 states have similar standards in place or under development, less than three percent of the nation's energy comes from wind, solar and other renewable energy sources.

Senator Jeff Bingaman of New Mexico chairs the Senate Energy Committee. (Photo courtesy Office of the Senator)
Bingaman said a national standard would dramatically accelerate the development and use of renewable energy, calling the provision "an essential component of any comprehensive national energy policy."

Republicans criticized the plan, arguing that it overly favors wind energy and could harm states, particularly in the Southeast, that have limited wind energy resources.

"This is nothing more than a tax on the Southeast of the United States," said Senator Bob Corker, a Tennessee Republican.

Senator Pete Domenici, a New Mexico Republican, put forth a rival plan that would require utilities get 20 percent of their electricity from renewable sources by 2020, giving credit for electricity generated by new nuclear power plants and hydroelectric dams and allowing utilities to count efficiency measures toward meeting the standard.

Senator Pete Domenici of New Mexico chaired the Senate Energy Committee before the Democrats won a slim majority of the Senate seats in November 2006. (Photo courtesy NMSU)
"If it is clean and available, you ought to put it in," Domenici told colleagues, "rather than pick winners and losers between the various clean technologies that are out there."

Bingaman called the Domenici plan "a recipe for business as usual" and said it would allow some states to opt out of the plan.

"You don't have a national renewable standard, and you don't drive the development of these technologies in a national market if it is up to each state to decide if they want to participate," Bingaman said.

He also rejected the claim that his proposal was unfair on some regions.

"It is true the best wind, geothermal, and solar resources are concentrated in the West," he said. "But the entire country has extensive biomass potential."

States that do not have or choose to develop renewable resources would still realize the benefits of the national plan, Bingaman added, such as lower natural gas prices and less air pollution.

A study by the federal Energy Information Administration shows that the costs of the plan to consumers is "negligible," he told colleagues.

This wind farm in southeastern Wyoming contains 69 wind turbines that provide power for the customers of Eugene Water and Electric in Eugene, Oregon. (Photo courtesy Eugene Water and Electric Board)
Democrats, with the aid of seven Republicans, voted 56-39 to table the Domenici amendment - prompting Republicans to block a vote on the Bingaman plan.

As Democrats appeared not to have the 60 votes needed to force a vote on the amendment, they abandoned the issue.

The New Mexico senators on both sides of the aisle pledged to work together to reach a compromise, but the dispute illustrates the difficulty the Senate may have in passing the massive energy package before the July 4 recess.

The centerpieces of the bill are a mandated 40 percent increase in fuel economy standards and a fivefold increase in the production of ethanol.

The legislation also increases home appliance and federal building energy efficiency standards, and requires the federal government to boost its use of renewable energy and cut its oil consumption.

In addition, it stiffens penalties for price gouging by oil companies, and provides support for efforts to study trapping greenhouse gases underground, a technology known as carbon sequestration.

Democrats tout the bill as a measure that will bring the nation closer to energy independence and reduce greenhouse gas emissions.

But the White House has already issued a veto threat because of the mandatory increase in fuel economy and the price gouging language, and Republicans in the Senate are clearly not content with the existing package.

Minority Leader Mitch McConnell, a Tennessee Republican, complained the bill does "absolutely nothing" to boost domestic production of oil and gas.

Senator Mitch McConnell of Tennessee was first elected to the Senate in 1984. (Photo courtesy Office of the Senator)
"If energy independence is truly a priority, we'd increase domestic production of oil and gas," McConnell said.

Thus far the Senate has rejected two Republican attempts to tackle the demand side of the oil and gas issue.

On Wednesday, the Senate defeated an amendment by Senator James Inhofe of Oklahoma designed to boost refinery capacity. Inhofe's measure would have streamlined the permitting process and offered incentives to build new refineries on former military bases and Indian lands.

"The underlying assumption that the reason we don't have enough refining capacity in this country is that we can't find places to put refineries," Bingaman said. "That is just not the reality."

The Senate also rejected a proposal by Senator John Warner of Virginia to roll back the moratorium on oil and gas drilling off much of the nation's coasts, allowing his state to request a waiver to drill for natural gas in federal waters off its coast.

Warner said high natural gas costs justify the policy and urged colleagues to consider the wishes of his constituents.

"A state has the right to utilize those resources on the Outer Continental Shelf off of its shores," Warner said.

Democrats from other coastal states, notably New Jersey, warned that drilling in the Atlantic could have costly environmental and economic consequences for states all along the Eastern coast.

Senator Frank Lautenberg has represented New Jersey in the U.S. Senate for 20 years. (Photo courtesy Office of the Senator)
"A spill could poison the Atlantic and damage our economy tremendously," said Senator Frank Lautenberg, a New Jersey Democrat.

Warner's request would cause "a domino effect that will undo the whole basis of the moratorium that has existed for a quarter of a century," warned Senator Bob Menendez a New Jersey Democrat. "These are federal waters and this is a national concern."

Debate over the energy bill is set to heat up in the coming days, as lawmakers wrestle with a wide array of additional amendments, including a measure to set up a national greenhouse gas registry as well as a controversial provision to boost production of liquid fuel from coal.

A major battle looms over the automotive fuel economy provision of the bill - an issue that breaches party lines in the Senate. The bill currently raises fuel economy standards to 35 miles per gallon, mpg, by 2020, with four percent annual increases from 2021 to 2030.

The required level of fuel economy has been a contentious issue for years. (Photo courtesy RIDLT)
The increases amount to about 10 mpg and would save some 2.1 million barrels of oil a day by 2025, said Senator Diane Feinstein, a California Democrat.

"The technology exists to accomplish the goals of this legislation," she said. "Today's cars get the lowest number of miles to the gallon since 1988. This has to change."

The fuel economy increase has drawn stiff opposition from the auto industry, and Michigan Democrats are planning to introduce an amendment to weaken the fuel economy provisions. The amendment will likely call for a 36 mpg standard for cars and 30 mpg for trucks by 2022 and removal of the subsequent increases.

Environmentalists, many of whom are wary of the mandated ethanol production in the bill, are also far from pleased with the current fuel economy language in the bill. They note that it exempts "work trucks," defined as vehicles heavier than 8,500 pounds. In addition, the language sets fuel efficiency for medium and heavy-duty trucks at the maximum feasible level, rather than the four percent annual increase.

Debate on the energy bill will continue Friday and Monday, with voting to resume Tuesday.

Copyright Environment News Service (ENS) 2007. All rights reserved.