Energy Policy Act Polarizes American Opinion

WASHINGTON, DC, November 17, 2003 (ENS) - Both houses of Congress have agreed on comprehensive energy legislation that proponents say will increase American energy production and create an estimated one million jobs. Critics say the measure will weaken protections for air and water and public lands, and take on $100 billion in new national debt to provide tax breaks to the oil, gas, coal and utility industries.

The Energy Policy Act 2003, which emerged from a House-Senate conference committee Saturday, is based on the Bush administration's energy priorities and covers nuclear development, coal, oil and natural gas production, hydrogen, wind and geothermal energy sources, efficiency and conservation.

Supporters include the Republicans who control Congress and Energy Secretary Spencer Abraham, who urged passage of what he called a "comprehensive and balanced energy bill that reflects the President's energy priorities" before the end of the year.

Critics include many Democrats in Congress, the U.S. Conference of Mayors, city council members, county officials, water system executives and public works directors, as well as representatives of environmental and taxpayer groups.

House Majority Leader Tom DeLay, a Texas Republican, said, "The comprehensive energy plan may not be the sexiest or most tangible legislation we pass this year, but there are few other issues that are more critical to job creation, our security, and our quality of life."

New Mexico Senator Pete Domenici chairs the Senate Energy and Natural Resources Committee. (Photo courtesy Office of the Senator)

Domenici said, "I believe that when taken as a whole, the public and members of Congress support this, not only as a good plan to give the nation more stable and reliable energy sources but as a major bill that will create hundreds of thousands of new jobs, too."

Critics took greatest objection to two provisions of the bill - the postponment of clean air attainment standards, and an immunity from lawsuits granted to producers of gasoline containing the fuel additive methyl tertiary butyl ether (MTBE) which has contaminated the drinking water of hundreds of communities across the United States.

Senator Jim Jeffords, a Vermont Independent who serves as the ranking member of the Environment and Public Works Committee, opposes the bill. On the Senate floor today, Jeffords said he is concerned that the bill "will endanger our environment and benefit special interests."

"This bill drastically re-writes existing clean air laws," Jeffords warned. "It postpones ozone attainment standards across the country. This is a matter never considered in either House or Senate bill that has been inserted into the conference report. By inserting this language, the conferees will expose the public to dangerous air pollution emissions for far more time than under existing law."

"This is a disgraceful sneak attack on the air we breathe," said Earthjustice attorney David Baron. "There is no excuse for waiving clean air requirements for cities that are already years behind schedule in meeting health standards."

Liability immunity granted to MTBE producers raised objections from the U.S. Conference of Mayors. Executive Director Tom Cochran said today that this "safe harbor" provision "could be the largest unfunded mandate - to the tune of $29 billion - passed down from Congress to local taxpayers in recent years."

"This cost comes at a time when states, counties and cities are already severely financially challenged," Cochran said. "To impose another unfunded mandate on the backs of local taxpayers is both unfair and unjust."

Congress never mandated the use of MTBE, said Cochran, so Congress is not obligated to provide the producers with safe harbor. Furthermore, court documents show that the MTBE industry knew of the chemical's environmental dangers before putting it into widespread use.

Workers remove a leaking underground storage tank that may have introduced MTBE into local groundwater. (Photo courtesy EPA)

Senator Joe Lieberman of Connecticut, a Democratic candidate for the Presidential nomination, vowed to back a filibuster of the energy bill conference report over the MTBE liability exemption.

“Although the smoke has not yet cleared from the Republican closed door, backroom negotiations on the energy bill, this much is clear - polluters will profit, and the public will pay,” Lieberman said.

“Taking their cue from the President, Republican conferees have apparently agreed to shield the oil industry from liability on the proven harmful effects of the fuel additive MTBE. Families plagued by the water pollutant now have to fend for themselves."

But proponents say the legislation institutes a specific new funding category to cleanup tank related releases of oxygenated fuel additives in gasoline, like MTBE, and it prohibits federal facilities from exempting themselves from complying with all federal, state, and local underground tank laws.

Sierra Club Executive Director Carl Pope speaks for many environmental groups when he says this bill "hands over our public lands to big oil companies, making oil and gas drilling the dominant use of our pubic lands."

"The bill will turn back the clock on clean air gains that we've made in recent decades, weakening the Clean Air Act and making it easier for polluters to dirty our air for longer. The bill will take the teeth out of our clean water laws where it comes to oil companies, exempting oil and gas activities from the Clean Water and Safe Drinking Water Acts. It even lets MTBE manufacturers off the hook for cleaning up their own mess - saddling local communities with a $29 billion cleanup cost," Pope said.

But critics did not object to one of the bill's largest expenditures - $3.4 billion for each fiscal year 2004 through 2006 for the Low Income Housing Assistance Program, a federally funded program to help eligible low income households meet their home heating and/or cooling needs.

HIGHLIGHTS OF THE ENERGY POLICY ACT 2003

Nuclear

The bill renews liability protections for the nuclear industry for 20 years, including provisions to encourage the development of advanced modular reactors. It provides for improved federal oversight of nuclear plant security and the expansion of federal laws for sabotage of nuclear facilities.

The Nuclear Regulatory Commission receives more power to protects decommissioning funds from misuse, improves the ability to attract and retain trained personnel and clarifies license periods for new plants.

The bill authorizes more than $800 million over five years for the Advanced Fuel Cycle Initiative (AFCI). The AFCI is developing the technology base to extract energy from high-level nuclear waste. It deals with the transformation of long-lived radioactive materials, such as those in spent nuclear fuel rods, into short-lived or non-radioactive materials.

AFCI’s transmutation technology has the potential to extract energy from nuclear waste and make it available to the national power grid, representing a potentially huge amount of energy, proponents say.

The bill budgets $1.8 billion over five years for research into nuclear fusion, the type of nuclear energy emitted by the Sun, in which atomic components are fused to produce energy, rather than separated as in nuclear fission, the energy sources of today's power plants.

Authorization for the United States to participate in ITER, the international burning plasma fusion research project in which President George W. Bush announced U.S. participation on January 30 is contained in the bill. Once known as the International Thermonuclear Experimental Reactor, although this usage has been discontinued, the project to develop fusion includes scientists and engineers from Canada, Europe, Japan, and Russia.

Coal

The bill provides authorizations for an average of about $600 million per year for the Department of Energy’s (DOE) fossil program for existing and new coal based research and development.

A front loader piles coal at Niagara Mohawk's Dunkirk steam station in New York. (Photo courtesy NREL)

Research is focused on innovations at existing plants, new advanced gasification and combined cycle plants, advanced combustion systems and turbines as well as fuel-related research.

It provides a $1.8 billion authorization for the Secretary of Energy to carry out the Clean Coal Power Initiative, which will provide funding to those projects that can demonstrate advanced coal based power generating technologies that achieve significant reductions in emissions.

The bill mandates that at least 60 percent of the $1.8 billion will be used for projects on coal based gasification technology and that these projects meet stringent environmental performance standards and increased efficiency standards.

Oil and Gas

A provision allowing controversial oil and gas drilling in the environmentally sensitive Alaska National Wildlife Refuge does not appear in the legislation.

The measure authorizes oil and gas research programs including ultra-deepwater and unconventional natural gas research and development. More oil and natural gas exploration and development is encouraged by provision of royalty relief for deep and ultra-deep gas wells in the shallow waters of the Gulf of Mexico.

The bill allows for the construction of a natural gas pipeline from the Alaskan North Slope to the lower 48 states to promote competition in the exploration, development and production of natural gas.

Proponents say, "Natural gas is responsible for 20 percent of our nation's energy production and is expected to play an increasingly important role in addressing our nation's future energy needs."

The measure authorizes the expansion of the Strategic Petroleum Reserve’s (SPR) capacity from 700 million to one billion barrels and filling the SPR to that capacity during periods of stability.

But critics say the bill seeks to allow the Bureau of Land Management (BLM) just 10 days to review lengthy permit applications that applicants may have taken up to two years to complete. Randy Moorman of Earthjustice points out that the measure biases the BLM toward approving completed permit applications, and attempts to require approval of an application that is deemed complete, even if the project is fundamentally flawed because its environmental impacts cannot be mitigated, such as projects sited near sensitive areas including streams or steep slopes.

Language authorizing the Secretary of Interior to lease 100 percent of the National Petroleum Reserve in Alaska, without ensuring permanent protections for important conservation areas or regard for wildlife habitat, native hunting and fishing, water quality, or other non-commercial values, is damaging, says Earthjustice.

Renewables, Research, Efficiency

The legislation authorizes over $2.9 billion in funding over the next five years for renewable energy research and development, including $800 million to develop biopower energy systems, biofuels and bio-based products.

A hydrogen fuel cell generates electricity through an electrochemical reaction using hydrogen and oxygen. Because there is no combustion in the process, there are no harmful emissions. (Photo by Matt Stiveson courtesy NREL)

Tax incentives for development of wind, solar and geothermal power are authorized.

New scientific endeavors are authorized in such areas as nanotechnology, and catalysis research tailored to specific classes of chemical reactions, which may be used in the synthesis of new polymers and fuels.

Propenents say the bill provides extensive authorization for the Department of Energy to increase the efficiency of all energy intensive sectors, promotes diversity in energy supply. It improves energy security and "decreases the environmental impact of energy related activities," Domenici says.

Specific authorizations are provided for energy efficiency efforts, a next generation lighting initiative, national building performance initiative, advanced energy technology transfer centers, research and development efforts regarding distributed energy systems and electric energy technologies, renewable energy efforts, bioenergy programs, and solar power research.

Electricity Transmission

The measure promotes investment in electric transmission capacity and efficiency measures by directing the Federal Energy Regulatory Commission (FERC) to do an incentive rate rulemaking. It promotes market stability by requiring FERC to meet a public interest standard before abrogating electricity contracts.

Expedited siting processes for transmission equipment on both federal and private lands are authorized, and the bill provides for the use of advanced transmission technologies.

Electricity towers near Denver, Colorado (Photo by Warren Gretz courtesy NREL)

An electric reliability organization to develop and enforce reliability standards for the bulk transmission system is established in addition to the existing North American Electric Reliability Council

Proponents like the provision that "dramatically" increases criminal and civil penalties limits and expands penalty provisions to cover all violations of the Federal Power Act.

But critics say financial incentives for polluting fossil fuel industries are not the right direction for U.S. energy policy to be taking. League of Conservation Voters (LCV) President Deb Callahan today said, "The Congressional Budget Office estimates that there are literally billions of dollars in subsidies and tax breaks for polluting industries - and far too little for renewable, efficient energy technologies and conservation."

"This bill is bad for the environment, bad for public health and bad for taxpayers," Callahan said.

Taxpayers for Common Sense, a citizens' group based in Washington, DC takes exception to the final price tag. Program Director Aileen Roder said, "It only took a matter of months, for sequestered energy conference negotiators to lard up the $61 billion version of the House Energy bill into a final version that will cost at least $95 billion. This bill uses the power of pork to reward big energy at the expense of millions of taxpayers."

The final bill contains more than $72 billion in authorized spending and an estimated $23 billion in tax giveaways, Roder said.

A poll by Zogby International conducted November 5 to 7 found that three of four voters support investments in energy efficiency and renewable energy over oil and gas drilling.

The poll, conducted for The Wilderness Society, involved 1,003 likely voters chosen at random nationwide. It has an error margin of +/- 3.2 percentage points.

The poll showed that 82 percent of Democrats, 80 percent of Independents and 70 percent of Republicans said that investing in energy efficiency and renewable energy sources is preferable to drilling for more oil and gas in the United States.

A majority of likely voters, 55 percent, feel it would be better if Congress did not pass this particular bill, knowing what the legislation contains, according to the poll. Just one in five feels it is very important that Congress pass this bill as soon as possible.