House Set to Pass Cheaper Energy Bill

WASHINGTON - Rebuffing Democrats on automobile fuel economy and Alaska oil drilling, House Republicans are setting the stage to pass their vision of a national energy agenda.

The energy bill, crafted Wednesday during daylong hearings by three committees, mirrors one the House passed nearly two years ago, only to have it die in the Senate. A vote by the full House is likely next week.

This time, though, the legislation is considerably cheaper.

Tax writers approved a tax package costing $8 billion over 10 years, about a third of the $23.5 billion price tag in the legislation two years ago.

The bill is still tilted heavily toward helping traditional energy industries including coal, oil and natural gas companies with little to encourage energy efficiency. Less than $500 million in tax incentives are directed at renewable energy and efficiency programs. It does not address improvements in automobile fuel economy.

The legislation would boost production of corn-based ethanol, a boon to farmers, by requiring refiners to use at least 5 billion gallons a year as a gasoline additive. Proponents maintain it will reduce the need for oil imports.

Currently the industry produces about 3.7 billion gallons annually.

The bill also contains two controversial provisions that — if pursued in the Senate — would likely prompt a filibuster: a green light to drill for oil in the Arctic National Wildlife Refuge in Alaska, and a shield for makers of the gasoline additive MTBE against product liability lawsuits.

The MTBE issue scuttled an energy bill in 2003.

Rep. Lois Capps (news, bio, voting record), D-Calif., argued that MTBE makers knew the additive, used to reduce air pollution, would contaminate drinking water and should not be absolved from cleanup costs. Her attempt to remove liability waiver from the bill failed 31-20 in the Energy and Commerce Committee.

Republicans also turned back Capps' attempt to scuttle a provision that would give MTBE makers $1.75 billion for transition costs as MTBE is phased out after 2014. Capps says cleanup costs could be as high as $29 billion, although that figure is disputed by the industry.

Rep. Joe Barton (news, bio, voting record) of Texas, the committee's chairman, defended the MTBE waiver, arguing that the additive became widely used only because Congress in 1990 required an oxygenate in gasoline. MTBE and ethanol were the only readily available choices, he said.

The Energy and Commerce Committee cleared its energy provisions by a 39-15 vote late Wednesday.

In the House Resources Committee, Republicans by a 30-13 vote turned back an attempt by Democrats to strip out the provision that would, for the first time, allow oil exploration in the Arctic National Wildlife Refuge in Alaska.

"This is about making the country safer," countered Rep. Don Young (news, bio, voting record), R-Alaska, because it will increase domestic production and ease reliance on imports.

The government estimates about 10.4 billion barrels of oil beneath the refuge's coastal plain. Environmentalists complain oil drilling will harm caribou, migratory birds and other wildlife.

T he ANWR drilling issue is all but certain to be left out of the Senate's energy bill because it will attract a Democratic-led filibuster and could jeopardize the legislation. Refuge drilling proponents in the Senate, instead, are hoping to get the measure passed as part of the budget process where the filibuster cannot be used.

Democrats also criticized the House bill for failing to deal with gas-guzzling automobiles.

A proposal, offered by Rep. Ed Markey, D-Mass., that would require the Transportation Department to boost fleet-wide auto fuel economy requirements beginning with 2015 model year cars, was defeated.

Markey said cars are less fuel efficient today than they were eight years ago. "We are now moving backwards," he said.

The House bill also would:

_Provide more favorable tax treatment for expanding or modernizing the electricity grid, and for building more natural gas pipelines.

_Establish mandatory electricity grid reliability rules.

_Give a 20 percent tax credit up to $2,000 to homeowners who put in more energy efficient windows, doors and insulation.

_Require the Energy Department to stop oil from being added to the Strategic Petroleum Reserve if oil prices dip below $40 a barrel.

_Give the Federal Energy Regulatory Commission clear final authority to approve liquefied natural gas import terminals, even over state or local objections.

_Allow the Environmental Protection Agency to extend compliance deadlines for cities to meet federal smog standards if they show most of the pollution comes from outside the region.

By H. JOSEF HEBERT