Energy Bill: Democratic Committee Staff Analysis
July 27, 2005
05:41 PM
To aid in reporting, below is our Democratic committee staff analysis of the final conference report. Because you may have heard from folks who are stressed about certain provisions that they don’t like, we though it would be helpful to offer a less myopic, more global framing of this massive, 1,725-page bill. For sure, there are some questionable policy provisions in this legislation. But on balance, we think the bill deserves bipartisan support. That’s why all but one Senate Democratic conferee signed the conference report -- Sens. Bingaman, Akaka, Dorgan, Johnson and Baucus.
That report is now posted on our committee’s website (http://energy.senate.gov/public). Because it’s so large, I won’t send it with an e-mail; for many, a file that big may be refused, or take ages to open, navigate and read.
Bill Wicker
Democratic Communications Director
Senate Energy & Natural Resources
202.224.5243
Policy Provisions of the Energy Bill Conference Report (H.R. 6)
(Tax Provisions Not Included)
Good Policy Provisions in Senate/House Energy Bills That Will Appear in the Conference Report
Electricity
- New standards for reliability on the national electric transmission grid, to prevent future blackouts.
- Major Senate provisions strengthening consumer protection in electric markets (new merger review, protection for utility customers in the Enron bankruptcy from exorbitant contract termination fees, improved market transparency, first-ever broad prohibition on market manipulation and filing false information).
- Higher enforcement penalties for violations by utilities of U.S. electricity laws.
Energy efficiency
- Major new federal programs and 15 new product standards that will reduce natural gas use in 2020 by 1.1 trillion cubic feet and peak electric demand in 2020 by 50,000 MW, equivalent to the capacity of 85 power plants (600 MW each).
- Energy Star program authorized for first time.
LIHEAP and Weatherization Programs
- LIHEAP reauthorized until 2007 at $5.1 billion per year.
- State weatherization grant and energy programs reauthorized at $2.1 billion through FY 2008.
Renewable fuels
- Senate schedule for mandating renewable fuels adopted up to 2011, with 2012 target of 7.5 billion gallons per year. 2012 proportion of renewable fuels maintained in succeeding years.
- Repeal of 2 percent oxygenate mandate.
- Senate language maintained on waivers to the program and to prevent gaming of the system (e.g., credits acquired in program expire after 12 months).
- Senate anti-backsliding language retained.
Renewable energy production
- Encourages the development of commercial markets for forest thinnings, which ultimately will reduce the cost of forest restoration. Kept out House language that would have subsidized the cutting of old-growth forests.
- Hydroelectric dam relicensing provisions improved from Senate language (which was better than House language), to promote fairness to all parties.
- Improves many aspects of the current Federal Geothermal Leasing Program to encourage production while ensuring environmental protection (e.g., simplifies the royalty structure; provides for competitive leasing).
Hydrogen
- Strong, far-reaching program to move towards a hydrogen economy, with emphasis on hydrogen cars.
Strategic Petroleum Reserve
- Permanent authority to operate the Strategic Petroleum Reserve (SPR).
- Guidance not to fill the SPR when fills would appreciably affect price.
- DOE authorized to fill the SPR to 1 billion barrels.
Nuclear Safety
- Authority for the Nuclear Regulatory Commission (NRC) to improve security at nuclear power plants.
- Enhanced whistleblower protection for NRC and Department of Energy (DOE) employees and DOE contractors.
Coastal Wetlands
- $1 billion in coastal impact assistance to protect coastal wetlands in coastal energy-producing States.
Indian energy development
- Environmentally responsible energy development on Indian lands, without the NEPA waivers proposed in the House energy bill.
- New office in DOE dedicated to Indian energy.
Vehicle fuel efficiency
- Research for increased efficiency in the railroad and aviation industries.
- Authorization of appropriations to promote implementation and enforcement of automobile fuel economy standards.
Liquified natural gas (LNG)
- Enhanced State participation in LNG siting decisions.
Global warming
- Structure put in place to coordinate climate change technology research across Federal agencies.
- Authorizes demonstration projects on technologies to mitigate global warming.
- Facilitates deployment of climate change technologies in developing countries.
Strong energy research and development (R&D) programs
- Increased emphasis on developing clean, next-generation energy technologies.
- New clean coal programs to develop systems that can ultimately capture and remove carbon dioxide.
- Agricultural biomass R&D program added on Senate floor kept intact.
- New direct spending for advanced oil and gas production technologies exploration in non-moratorium areas, but beyond the reach of current technology.
- Reforms to DOE management of R&D to improve consistency and effectiveness of these programs.
Transitioning technology to the marketplace
- Establishes tough standards for DOE loan guarantees for energy technologies.
- Provides authority to make loan guarantees for advanced energy technologies needing help to overcome the last barrier to commercialization.
Good Policy Provisions in Senate/House Energy Bills That Will NOT Appear
in the Conference Report
Renewable portfolio standard – 10 percent renewable electricity by 2020
Oil savings requirement for the President – 1 million barrels by 2015
Sense of Senate on Climate Change
Ban on methyl tertiary-butyl ether (MTBE)
Tire fuel efficiency amendment
Bad Policy Provisions in the House Energy Bill That Will Appear
in the Conference Report
Exemption of hydraulic fracturing from coverage under the Safe Drinking Water Act (however, hydraulic fracturing with diesel fuels will still be subject to Federal regulation, and State regulation of hydraulic fracturing is not affected).
Exemption of oil and gas construction sites from storm water runoff regulations under the Clean Water Act.
Expedited Federal judicial review for permits and federal authorizations related to natural gas pipelines and LNG facilities – e.g., Clean Air Act permits for such projects will be reviewable only by Federal Courts of Appeals.
Overly generous royalty relief for energy production on Federal lands.
New rules to manage the boutique fuels problem are complex and may be unworkable.
Two-year Clean Air Act exemption for Western Michigan.
Bad Policy Provisions in the House Energy Bill That Will NOT Appear
in the Energy Bill Conference Report
Provisions Related to MTBE Lawsuits
- No “safe harbor” from product liability.
- No termination of ongoing court cases.
- No “findings” intended to skew ongoing litigation.
No MTBE producer “transition assistance”.
No “Bump-Up” waiver of Clean Air Act ozone attainment standards nationwide.
No vague new “risk assessment” requirement that would provide for endless litigation of energy-related environmental regulation.
No NEPA waivers, which were sprinkled throughout the House bill.
No House special-interest electricity provisions (e.g. “contract sanctity,” Cross-Sound electric transmission cable order).
No Federal oil and gas lease repurchase requirements that could undermine environmental requirements.
No program to give DOE authority to override all other Federal and State agencies to build new refineries in economically distressed areas.
No carve-out of Chinese-made ceiling fans from U.S. energy efficiency standards (so-called “Home Depot” provision).
Other Provisions Advocated by the Administration
Conference Report includes nuclear plant construction “risk insurance” (A version of this proposal was in the Hagel climate change amendment in the Senate; the White House proposal was adopted after modifications to narrow the scope of coverage and reduce the potential cost.)
Conference Report excludes White House proposal for new oil and gas drilling on the Outer Continental Shelf in the Eastern Gulf of Mexico.
Bill Wicker
Democratic Communications Director
Senate Energy & Natural Resources
202.224.5243
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