Congress Must Act Now on Solid Energy Policy

Posted December 3, 2004 at 12:31pm

Now, more than ever, the country needs a solid energy policy. With gasoline, heating oil and natural gas prices at all-time highs, and crude oil supplies more precarious than ever, we must act now on sensible and balanced legislation. Some predict that Republican leaders will merely seek to pass the unpassed portions of its previous failed bills, relying upon a slight Republican gain in the Senate. But the success of an energy bill will hinge upon the answer to the following questions.

Will Congress focus on common-sense consensus provisions, or hold them hostage to more controversial measures? The poster child for this matter is the electric reliability provision in the bill. The blackout of 2003 was the biggest threat to homeland security since the Sept. 11, 2001, terrorist attacks, throwing 50 million people into darkness, and leaving many without drinking water for days. Following the blackout, a joint U.S.-Canada task force called on Congress to enact mandatory reliability standards. That provision has strong bipartisan support.

Rather than heeding the calls of Democrats to pass the reliability provision quickly and separately, Republican leaders held it hostage to gain votes for the rest of the bill. As a result we continue to be vulnerable to blackouts.

Will the bill respond to the post-Enron world? When the first version of the bill was introduced, electricity prices were soaring on the West Coast and there was a debate over the cause. Was it merely a lack of generating capacity and transmission lines, or was market manipulation also a cause? We now know the answer. Everyone from the Federal Energy Regulatory Commission to the Justice Department to the companies’ own tapes show that market manipulation was involved.

Yet the bill ignores the lessons of Enron. Democrats responded with proposed legislation to arm FERC with tough anti-fraud authorities and the ability to compensate consumers. Amazingly, the energy bill repeals the Public Utility Holding Company Act, the law which prevented Enron from spreading its fraud across the country by buying up utilities.

How will the bill deal with $50 per barrel crude oil prices and $2 gasoline? When the bill was first introduced, crude oil was barely over $20 per barrel. The sponsors of the bill believed that costly tax breaks and royalty relief were necessary to stimulate production and protect consumers.

Now crude oil prices are hovering around the $50 mark. Are more financial incentives necessary? Meanwhile, an analysis of the energy bill performed by the Energy Department of found that the bill would raise gasoline prices by 3 to 8 cents in many parts of the country. Will Congress pay attention to this analysis?

Will the legislation recognize that a sound energy policy need not be an assault on the environment? The bill includes a provision which would give hydroelectric dam owners an unfair advantage in relicensing hearings at the expense of states, tribes, and environmental groups. The Bush administration has been trying to do the same administratively. These efforts, like the energy bill as a whole, have been roundly criticized in editorials across the country, but so far the Republican leadership has refused to consider a more balanced approach.

The bill makes a similar attack on drinking water. For example, a provision favoring Halliburton would tie the hands of the Environmental Protection Agency to regulate a process known as hydraulic fracturing, used to extract oil. While the process itself can be safe, there could be actions, such as the injection of fuel oil that could seep into water supplies, that clearly are not.

Will the legislation confront the reality of our deteriorating fiscal condition? When the energy bill was first introduced in 2001, the Bush administration had inherited a surplus over $200 billion. Since then, the surplus has turned into a deficit of over $400 billion. Will Republicans continue to insist on passing energy bills we can’t afford?

Does it make sense to pass legislation to lessen our dependence upon foreign oil when it is financed by borrowing from foreign lenders?

Will the Congress consider the bill under fair and open procedures?

The origins of the energy bill were found in the secret deliberations of the Cheney Energy Task Force of 2001. Once the Congress got a hold of the bill, things did not improve. It culminated in a conference last year that excluded all Democrats from the negotiations. A couple of days later the bill was put on the House floor where it passed, with few Members aware of its contents. But with more time, the Senate began to see the numerous special interest provisions thrown into the bill that had never been considered by either body, including a tax break for a strip mall that would house a Hooters bar.

In summary, the question for the next energy bill is will Congress re-evaluate its policies in light of new information and a changing world?

Or will it continue to seek votes for the remnants of an outdated bill?

Rep. John Dingell (D-Mich.) is the ranking member of the Energy and Commerce Committee.