Political storm brewing

October 1, 2005 By    

Unexpectedly, Congress returned to Washington a few days before their regular session was scheduled to pass a $10.5 billion supplemental emergency-spending bill in reaction to the devastation and impacts of Hurricane Katrina.

 Lisa Bontempo
Lisa Bontempo

Upon their post Labor Day start of session, they came face to face with other unexpected issues of political magnitude – not one, but two open seats on the Supreme Court with the death of Supreme Court Justice William Rehnquist, record high gasoline prices, approved oil loans from the Strategic Petroleum Reserve, Energy Information Administration predictions of a huge rise in winter heating fuel costs, and last but not least, an energized opposition in the Democratic party.

These realities have upended the planned Congressional agenda. In a non-election year, Congress often sets and tries desperately to meet target adjournment dates in October. Now, the fall session is expected to run well into at least late November, for better or worse.

Republican leaders had hoped to move quickly on two issues in particular, repeal of the estate tax and Social Security reform, but those issues are now pushed to the back burner.

What issues are likely to take their place? Obviously the Congress is working furiously to pass measures related to hurricane recovery. An additional $50.1 billion in aid related relief is likely this month, the largest financial aid relief package in our history.

While the propane industry gives its assistance to and works to recover from the hurricane’s impact and economic disruption, industry focus will need to be turned to Congressional attempts that may impact it under the guise of security or recovery.

Specifically, Majority Leader Tom Delay and House Speaker Dennis Hastert have said they will push for a second energy bill just one month after passage of the major bill passed in August.

Democratic and environmental critics are already gearing up their opposition in what they will charge is just an attempt to open up the Arctic National Wildlife Refuge. That issue aside, the industry will need to keep a watchful eye.

Many Democrats have begun the drumbeat for a windfall oil profits tax, as well as early calls for investigations into energy price gouging. In fact, the House and Senate have already held hearings on this.

Other ideas being discussed include additional oil release from the strategic reserve, a moratorium on the federal excise tax and aid for the construction of new oil refineries. The oil refinery measure was included in the House-passed version of the earlier energy bill but was removed over objections of House Republicans.

A new energy related bill might also look at litigation costs and regulatory burdens related to facility construction.

As the hurricane clean up continues, we also may see Congressional focus turn to facility safety and environmental concerns. Risk management plans and all of the arguments and issues related to the industry’s RMP fight are likely to resurface.

The industry has faced many of these issues before. Since the days of price controls, they have become almost cyclical in Congress every time gas prices hiccup. What is different this time is a fiercely partisan Congress, with Republican’s majority razor-thin, and a minority Democratic Party going into an election year with a renewed sense of purpose focused on a social agenda.

It’s a safe bet that the energy industry (read “big oil”) is likely to be lionized along with critique and clamor for reform of governmental relief agencies.

Hurricane Katrina reminds us to never underestimate the power of Mother Nature. We also should remember not to underestimate the political winds that blow in from the south as well.

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

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