- The Washington Times - Tuesday, June 28, 2005

The Senate approved energy legislation embraced by both Republicans and Democrats yesterday, but hard bargaining looms with House leaders who favor a significantly lower price tag.

The Senate version passed 85-12 and is expected to cost about $18 billion, nearly double the House’s $10 billion package, but the Senate Energy and Natural Resources Committee chairman said the price tag was unavoidable.

“People are talking about two different things with the costs; the only costs in this bill that are in any way in excess of the [Bush administration’s] is the tax portion …” said Sen. Pete V. Domenici, New Mexico Republican.

The bill contains numerous tax incentives for domestic oil production, ethanol-based fuels and renewable energy sources, such as wind, solar and hydrogen power.

The administration suggested a budget ceiling of “about $7 billion” for the comprehensive energy policy, said Energy Secretary Samuel W. Bodman, and that was without any tax incentives for oil and gas.

Mr. Domenici said President Bush will have to decide which provisions and funding should move forward next year and what will have to be put on hold until later in the 20-year policy plan.

Two previous energy bills have passed both houses of Congress in the past four years, but failed in conference owing to several key provisions.

An issue that has derailed the legislation in the past — how to handle producers of the gasoline additive methyl tertiary-butyl ether (MTBE) — may be sidestepped this year, just as the issue of oil and gas drilling in the Arctic National Wildlife Refuge was dogged by adding its potential revenue to the budget proposal.

Rep. Joe L. Barton, Texas Republican and House Energy and Commerce Committee chairman, has been working on a deal to include the MTBE language in the highway transportation bill and said he can get a deal “when we need to have a deal.”

Congress essentially mandated MTBE use when it passed a law in 1990 requiring gasoline to contain 2 percent oxygen. As a result, House Majority Leader Tom DeLay, Texas Republican, has demanded that Congress accept its role and protect MTBE producers from the numerous “defective product” lawsuits that surfaced after the chemical was found to contaminate ground and drinking water in 18 localities.

The Senate has rejected the proposal as a deal breaker.

Several senators opposed the legislation because their chief concern was not addressed.

For example, Sen. John McCain, Arizona Republican, pushed for a strong global-warming policy, but found that the majority of the Senate agreed with Mr. Bush’s position, which holds that the earth is warming in part as a result of human activity but that it is not possible to determine the human impact or how fast it is occurring.

Global warming is not expected to stall the bill, but a provision to expand offshore oil and gas drilling with a mandate that every state, except Florida, provide an inventory of its resources could be problematic. Some states do not mind the inventory, but want their rights respected.

“This is a very good bill that, unfortunately, contains a very bad provision,” said Sen. Mel Martinez, Florida Republican.

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