- The Washington Times - Thursday, November 1, 2007

While it seems some leaders in Congress are willing to compromise with the White House on an energy bill, back-door wrangling could grind the measure to a halt, a prospect many conservatives and business groups wouldn’t mind in the least.

The pending bills, approved with significant differences between the House and Senate, would put in place a number of unsavory regulatory measures that the White House has indicated the president would veto.

Particularly repugnant is a proposal passed by the House that would impose billions in new taxes on the oil and gas industry all in the name of developing more eco-friendly renewable energy resources. This harmful measure would repeal $16 billion in tax breaks for U.S. oil companies over 10 years, a move that will further drive up the cost of gasoline. While Democrats claim to support reducing U.S. reliance on foreign oil production, this proposal would handicap U.S. domestic companies against their foreign competitors by essentially double-taxing them beyond the substantial foreign taxes they already pay.

The Senate’s energy bill would increase the corporate average fuel economy, or CAFE, standards for vehicle mileage for the first time in more than two decades. It would also quadruple the use of energy alternatives like ethanol. Unfortunately, the average CAFE standard passed by the House is 35 mpg by 2020 for both cars and trucks, a stipulation that fails to take into consideration the vast physical differences among cars, trucks and sport utility vehicles. A much more sensible proposal has been offered by Reps. Baron Hill, Indiana Democrat, and Lee Terry, Nebraska Republican, that would create separate standards for different types of vehicles, acknowledging that trucks and cars require varying levels of fuel for operation. The Hill-Terry compromise was not adopted in the original House bill, but should a measure emerge out of conference, legislators should include this provision.

An additional measure further complicating matters is a provision in the Senate bill that would exponentially increase loan guarantees offered to companies seeking to build new nuclear power facilities. Wall Street is unwilling to grant these significant loans to a underdeveloped industry that has not seen a new plant constructed since the 1970s. Perhaps this controversial measure should be considered on its own merits in a separate bill, rather than further entangling the complicated negotiations surrounding these two bills.

Some analysts say the energy bill itself could wither this year, perhaps giving Democrats an opportunity for electoral grandstanding in 2008 if the bill dies. However, President Bush is willing to work with Democrats — energy policy was a major component of his State of the Union address — and congressional leaders should be willing to compromise as well.

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