After 4 years of debate, energy bill nears passage

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While promising no immediate relief from record-high gas prices, Congress is poised to pass an energy bill that could have far-reaching implications for

Copley News Service

WASHINGTON, D.C. — While promising no immediate relief from record-high gas prices, Congress is poised to pass an energy bill that could have far-reaching implications for California.

The mammoth legislation, which passed the House on Thursday, would weaken the state’s ability to block controversial liquefied natural gas, or LNG, facilities. But it made an exception for military posts, allowing the Pentagon to block nearby LNG projects, which some fear are possible targets for terrorists.

The bill also orders an inventory of offshore oil and natural gas reserves that are now off limits to drilling, mandates greater use of the gasoline additive ethanol and allows federal courts to assume jurisdiction over lawsuits against makers of another additive that has been banned in California, MTBE.

Consumer activists said the bill, which is expected to pass the Senate on Friday barring a concerted effort to stall it, would do the state more harm than good.

“It’s lights out for California consumers,” said Doug Heller, executive director of the Santa Monica-based Foundation for Taxpayer and Consumer Rights. “They’re weakening consumer protections and they’re taking away the state’s right to determine whether new energy facilities are safe and appropriate.”

But supporters said the legislation would put the country on the road to stepped up energy production and, ultimately, lower energy prices. California motorists pay among the nation’s highest gas prices.

“There is a lot that we need to do to have energy independence in this country and to lessen our dependence on foreign sources. It’s a great start,” said House Resources Committee Chairman Richard Pombo, (R-California).

California’s congressional delegation split largely along party lines on the 275-156 vote.

The legislation is the culmination of more than four years of debate. Shortly after taking office in 2001, President Bush called for a national energy policy that focused on increasing the production of coal, oil, natural gas and nuclear power.

That touched off a rancorous debate in Congress and several, ultimately futile, attempts to pass a bill. A combination of factors has helped the legislation along this year, including high oil prices, bigger Republican majorities in the House and Senate and the sidelining of controversial issues like opening Alaska’s Arctic National Wildlife Reserve to oil and gas drilling.

Some observers had predicted that the provision giving the Federal Energy Regulatory Commission, or FERC, final say on the siting of LNG facilities, which handle imports of the explosive fuel, would torpedo the bill again. But strong opposition to the move was largely limited to Democrats from the Northeast and the West Coast.

The provision grew out of a court battle between the California Public Utilities Commission and the FERC over a proposed facility in Long Beach that would convert the liquefied fuel, which is shipped in tankers from overseas gas fields, back into a gas.

Demand for LNG is growing, but local opposition has stymied efforts to build some LNG terminals. Federal officials say states will still have plenty of say in the process, citing their authority over clean water and coastal zone management laws.

The legislation is “clarifying our exclusive authority to authorize an LNG import facility that is part of foreign commerce,” said FERC Chairman Joseph T. Kelliher.

But Heller of the Foundation for Taxpayer and Consumer Rights questioned why lawmakers felt compelled to carve out an exception for military bases.

“That has got to tell you something. If the Department of Defense is so nervous about these facilities that they want veto power, shouldn’t California and other states have decision-making power?” he said.

Some California officials are also alarmed about a provision in the bill that would require an inventory of offshore oil and natural gas reserves. They see it as a prelude to weakening a moratorium on drilling in those waters, long coveted by energy companies.

House Minority Leader Nancy Pelosi, D-Calif., said the provision was “opening the door to oil and gas drilling in the protected areas off our shores.”

But supporters said detailed information about the reserves was necessary to guide future policy over drilling in the areas. An inventory would “at least allow us to see what’s out there,” said House Energy and Natural Resources Committee Chairman Joe Barton, R-Texas.

Another potential spoiler provision, which would have granted liability protections to makers of the fuel additive MTBE, was stripped from the final version of the legislation.

MTBE, methyl tertiary butyl ether, is a fuel additive that was widely used in California and other states to reduce air pollution from automobiles. But the substance has fouled water supplies, prompting dozens of lawsuits.

The legislation does allow future MTBE suits to be transferred to federal court, where juries and judges may be less sympathetic to local concerns.

The bill also marks a major victory for MTBE’s longtime rival ethanol, a fuel additive made largely from corn. Oil refiners will have to double their use of ethanol by 2012, blending 7.5 billion gallons into the nation’s gas.

Some California lawmakers fought the provision, fearing it would further increase gas prices in the state because little ethanol is produced there and it could be difficult to import enough to meet the new requirement. The ethanol industry insists those concerns are unfounded.

Consumer Watchdog
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