Hanging in the balance

Important issues for the propane industry are near the finish line as Congress returned in December to complete its business for the year. Will they cross the finish line or run out of gas?

A priority for Congress is passage of the 12 appropriations bills that fund the federal government’s operations and impact industry issues in direct and indirect ways. Directly, these bills fund the Department of Energy, Department of Transportation and other agencies, including the Department of Labor, Health and Human Services (Labor-HHS), which funds the low-income energy program.

Lisa Bontempo

Each year, these funding bills are must-pass bills that often end up indirectly influencing the political and legislative agenda as the session winds down. Congress often lumps many of these bills together in a package, or omnibus bill, to make it toward the finish line. Two of the 12 have passed Congress so far; only one has been signed into law.

The Labor-HHS appropriations is one of the largest funding measures each year and funds programs for vocational education, health research and the Head Start program for children and families. This year, the measure has become a lightening rod as the Democrats have used the bill to highlight their domestic budget priorities compared to those of President Bush, who vetoed the bill due to its cost. The House of Representatives failed to override the veto. This leaves funding for FY 2008 for the Low Income Home Energy Assistance Program (LIHEAP) uncertain.

The day after the veto, Mark Wolfe, executive director of the National Energy Assistance Directors’ Association, testified before Congress and called for additional funding for the program in light of rising energy costs. Of the nearly 6 million people expected to be helped through this program this year, Wolfe said only about 16 percent of those that are eligible will be helped.

Indirectly, the appropriations process is making it difficult for legislators to find time on the legislative calendar or political capital to press forward on other important priorities such as passage of the energy, tax or farm bills.

Legislators face significant hurdles to resolve differences in the two energy bills passed by the House (H.R. 3221) and Senate (H.R. 6) this summer. These differences continue to include disagreements over increasing vehicle fuel economy standards, a renewable fuel mandate, an increase in the production of alternative fuels and elimination of oil company taxes. With crude oil prices at $100-a-barrel levels, pressure, especially to increase corporate average fuel economy standards, remains very strong on Capitol Hill.

A coalition of environmentalists has organized around the rallying cry of “35and15” to call for an increase to 35 miles for the vehicle fuel economy standard and an increase of 15 percent in renewable fuels. The House energy bill calls for a controversial $16 billion tax plan to pay for renewable energy tax incentives by reducing current incentives for oil and gas companies.

The 2007 Farm Bill is also of particular interest to the industry this year.

This legislation includes over $280 billion of spending programs focusing largely on farm commodities, nutrition and food programs. It also includes an industry-promoted provision to exempt propane greater than 7,500 pounds from regulation. This stems from the industry’s fight to have consistent federal regulations in light of the recent ruling on chemical security from the Department of Homeland Security, which included propane on its list of covered substances.

An extension through 2010 of the alternative fuel and alternative fuel infrastructure tax credits also are included in the farm bill’s tax provisions. This bill may face a veto due to its inclusion of more than $30 billion in increased taxes to pay for its programs.

It is worth watching in December to see if the White House, and Republicans and Democrats in Congress, can agree on their priorities. Congress passed a continuing resolution through Dec. 14 to fund federal agencies at last year’s funding levels. Whether Congress can pass several separate appropriations bills or roll them together will determine how much time and energy they have left to move other issues forward.

Lisa Bontempo was a longtime energy lobbyist, including 13 years with NPGA. She remains involved in national politics, and can be reached at lisabontempo@msn.com.