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Tuesday, June 12, 2007

Energy Legislation Moving Inside Beltway

The House and Senate have passed and are considering additional energy legislation. President Bush is promoting his energy proposal too and could veto H.R. 6 over provisions that would outlaw gasoline price gouging and would subject OPEC to U.S. antitrust laws. The Senate vote on H.R. 6 was almost enough to override a presidential veto. AAEA opposes both of these provisions too.

The House passed an energy bill, Clean Energy Act of 2007 (H.R. 6) by a vote of 264-163 on Jan 18. The bill shifts $14 billion in oil industry subsidies toward renewable energy and energy efficiency. The bill includes: 1) Strategic Energy Efficiency & Renewables Reserve, a fund for alternative fuels. Funding would come from amending legislation to require companies to pay royalties on deepwater production if oil or gas prices reached certain thresholds. The GAO estimates the omission of such royalties since 1998 and 1999 has cost the government nearly $2 billion. 2) Raising taxes ("YIKES") on domestic oil producers and spend the money to subsidize ethanol, solar energy, and wind power. 3) Renegotiation of oil company public lands royalty contracts or pay a $9 per barrel royalty fee from these leases or lose rights to bid on future leases on federal lands. 4) Rescinding $5-$6 in oil company tax breaks included in the Energy Policy Act of 2005 The Congressional Black Caucus voted unanimously in support of H.R. 6. Update: This bill was replaced by the House Speaker's bill that was passed on Sept 5, 2007 (see description below).

The Senate passed the Clean Energy Act of 2007 (H.R. 6) by a vote of 65 to 27 on June 21. Major items in the bill include 1) increasing fuel efficiency standards for cars, trucks and SUVs to 35 miles per gallon by 2020, 2) mandates the use of 36 billion gallons of biofuels by 2022, with more thatn 20 million gallons coming from cellulosic ethanol, 3) half of new cars mandated to run on an 85% ethanol blend by 2015, 4) set new efficiency standards for appliances and lighting, 5) outlaw "unconscionably excessive" prices for gasoline and 6) subject OPEC members to U.S. antitrust laws..

The House is currently (6-14-07) considering additional energy legislation through the Energy Policy Reform and Revitalization Act of 2007 (H.R. 2337), which is sponosred by Nick Rahall, Chairman of the House Natural Resources Committee. The bill passed out of Committee on June 13 on a vote of 26-22. The bill would override the recent Supreme Court decision giving the EPA authority to regulate greenhouse gas emissions from automobiles. It would also effectively block efforts by California and 11 other states to regulate and reduce greenhouse gases from vehicles. The legislation has not been adopted.

Update: The House passed H.R. 3221, Renewable Energy and Energy Conservation Tax Act of 2007, introduced by House Speaker Nancy Pelosi, on Sept 5, 2007. The bill seeks to move the U.S. toward greater energy independence and security, developing innovative new technologies, reducing carbon emissions, creating green jobs (H.R. 2847), protecting consumers, increasing clean renewable energy production, and modernizing our energy infrastructure, and to amend the Internal Revenue Code of 1986 to provide tax incentives for the production of renewable energy and energy conservation. House Tax Committe Chair Charles Rangel's bill (H.R. 2776) added to the end of Pelosi bill.

House Energy & Commerce Committee Chairman John Dingell is also moving a global warming/energy plan called the Discussion Draft, which is being considered by Chairman Rick Boucher's Subcommittee on Energy and Air Quality (Energy & Commerce Committee). The bill includes energy efficiency, information enhancement, smart grid and demand response, loan guarantees and loan guarantees for coal-to-liquid projects.

Senater Majority Leader Harry Reid's bill, S. 1419, the "Renewable Fuels, Consumer Protection and Energy Efficiency Act of 2007, passed out of the Energy and Natural Resources Committee on May 2 on a 20-3 vote and was transmorgrafied into H.R 6 for Senate floor consideration. Titles in the bill include: biofuels for energy security and transportation; energy efficiency promotion, carbon capture, storage research, development and demonstration; public buildings cost reduction, Corporate Average Fuel Economy (CAFE) Standards; price gouging; and energy diplomacy and security.

President Bush is promoting a Twenty-in-Ten program that proposes to cut gasoline consumption and greenhouse gas emissions from motor vehicles by 20 percent over the next 10 years. The Bush plan includes 1) Increasing the supply of renewable and other alternative fuels by setting a mandatory fuels standard to require the equivalent of 35 billion gallons of renewable and other alternative fuels in 2017 – nearly five times the 2012 target included in the Energy Policy Act of 2005. 2) Reforming And Modernizing Corporate Average Fuel Economy (CAFE) Standards For Cars And Extending The Current Light Truck Rule. 3) In Response To The Supreme Court's Ruling, The President Directed Cabinet Agencies To Take The First Steps Toward Regulations Based On "Twenty In Ten" (On April 2, 2007, the Supreme Court ruled EPA must take action under the Clean Air Act regarding greenhouse gas emissions from motor vehicles). 4) Signed an Executive Order requiring coordination among federal agencies tasked with the development of any regulations affecting greenhouse gas emissions from motor vehicles. Coal-to-liquids is also a part of the president's 20-in-Ten Initiative.

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