Is it lights out for a national energy bill?

February 1, 2004 By    

New year, same frustrating challenges in Washington after the promising push for a comprehensive national energy bill withered in the cold winds of December.

When all was said and done in 2003, there was much said and little done as a recalcitrant Senate was not able to keep pace with a House of Representatives that pushed to get key issues passed into law.

Robert Baylor, director of communications for the National Propane Gas Association, says the inability of both houses to resolve differences and work toward compromise kept the bill from becoming law. Leadership in both the House and Senate had promised President Bush an energy bill in 2003, but the holidays arrived without any comprehensive measure.

“GOP leadership has said that this would be the first priority in January,” Baylor notes.

Indeed, following the president’s renewed call for energy legislation during his State of the Union speech Jan. 20, legislators sounded hopeful that action was near.

“For the third consecutive year, President Bush has called on Congress to pass an energy bill. We are closer to that goal today than we have been any time in these last three years. We are almost there,” Senate Energy Chairman Pete V. Domenici said.

“I am confident I can nail down the votes we need for cloture, but I’m still concerned about the budget points of order that will likely be raised. In the next few weeks, I will be working closely with House leadership to see what steps we can take to get the last few votes we need for final passage.”

Maybe this issue will become just a political football for the election campaign in 2004.
Maybe this issue will become just a political football for the election campaign in 2004.

The new year brings new hurdles to that challenge, however. First is the desire of some legislators to rework the 2003 bills into separate pieces. Domenici says he will not consent to that alternative.

“The one option I absolutely will not consider is breaking this bill up. I will resist such an effort with every resource I have,” he said.

“It’s the start of the year and we’re only two votes down. It’s far too early to talk about breaking this bill up. I intend to focus on final passage, and I urge my colleagues to do likewise.”

The second — and much more daunting — concern is the heightened political polarization that goes hand-in-glove with the anticipated bare-knuckles presidential election campaign brawl.

“Maybe this issue will become just a political football for the election campaign in 2004,” Baylor concedes.

For that reason, NPGA officials hope legislative action will be taken in the early part of the year before the political wrangling gets into high gear.

“Lawmakers have to act on this bill, if for no other reason that no one wants to be blamed if energy prices rise in the winter,” Baylor says. “At least the bill got further in 2003 than it did in the past, such as in 2002 when it didn’t even make it out of conference committee.”

One issue that won’t be part of the energy bill debate is the provision to offer tax credits for those who use propane for motor vehicles. That provision was removed by conference committee at the last minute to meet budget figures.

“NPGA will continue to lobby to have this credit included in another piece of legislation — perhaps the Highway Bill – in 2004, but it unfortunately won’t be in the energy legislation,” Baylor says.

The tax credit was part of the original Clear Act, sponsored by Orrin Hatch (R-Utah) in the Senate. It recognizes the role that clean-burning fuels such as propane play in improving air quality. The Clear Act was included into the energy bill as an amendment during the summer.

“The Clear Act would help reduce our country’s dependence on oil imports and it would provide domestic jobs,” Baylor notes. “This is a comprehensive approach toward developing cleaner vehicle technologies, building the vehicles and, most importantly, the infrastructure to support them.”

Baylor says the issue was to enhance national energy security and diversity goals by reducing the consumption of petroleum. Transportation accounts for nearly 67 percent of all oil consumption and is more than almost 98 percent dependent on petroleum.

Other sections of the Clear Act that passed will provide consumer incentives for technologies that are being introduced in small volumes, such as dedicated alternative fuel, electric and hybrid electric vehicles, as well as evolving, long-term fuel cell technologies.

“The transition and acceptance of this ‘pipeline’ of interrelated technologies is critical as the transportation industry continues its research and development of fuel cell vehicles,” Baylor says. “For example, feedstock fuels for dedicated alternative fuel vehicles set the stage for hydrogen reformation from the same alternative fuels [such as methanol, natural gas, propane and bio-fuels].”

NPGA says the effort to provide limited tax incentives to consumers for the purchase or lease of these vehicles will help offset the higher cost associated with new technology and alternative fuel vehicles.

“As the vehicles gain consumer acceptance and production volumes increase, the cost differential between these vehicles and conventional vehicles will be reduced or eliminated,” Baylor says.

Throughout debate on the bill in 2003, NPGA was most concerned about support for the Clear Act sections and support for the publicly traded partnership provision. The PTP provision would make it easier for partnerships to qualify as investments for mutual funds.

A third issue was an energy-efficiency tax bias. The original bill included a tax credit to builders for construction of energy-efficient homes and commercial buildings. NPGA views the credit as well intentioned, but claims the House version unfairly favored electricity in qualifying for the credits.

The association also wants legislators to consider source-to-site calculations when measuring energy efficiency.

“Because the generation of electricity is dirtier and less efficient than the way energy is derived from propane or natural gas, it’s the view of NPGA that it’s not a sound policy decision to include such a provision in a comprehensive energy bill designed to encourage cleaner and more efficient fuel use,” Baylor says.

The Senate version of the bill, which was less problematic for the propane industry, is the one that was included in the final version of the legislation.

Baylor says NPGA is pushing the PTP provision to make more capital available to industry members to expand their businesses, hire more workers and give a better value to their investors.

“We’ve worked hard to convince Congress of the importance of this provision,” Baylor says. “It’s important to the members of the NPGA and important to the overall economy of our country.”

The Senate’s failure to act in 2003 centered primarily on the provision to exempt oil companies from liability for the controversial gasoline additive MTBE. Six Republicans sided with the Democrat minority in blocking the bill when it came to a procedural vote.

Baylor says NPGA sources in the Senate say that the White House is working to convince House leaders to drop its insistence on the MTBE provision. The bill was approved in the House by a 246-180 vote.

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