July 31, 2007 in Nation/World

Democrats back energy bill

H. Josef Hebert Associated Press

The energy plan

The proposed legislation would:

Impose nearly $16 billion in additional taxes on oil companies over 10 years.

Use the money to promote renewable energy programs and energy conservation and efficiency.

WASHINGTON – House Speaker Nancy Pelosi solidified Democratic support behind her energy initiatives Monday and quieted rebellious party members who feared U.S. energy production would be hurt.

Democratic leaders reached agreement on legislation that would impose nearly $16 billion in additional taxes on oil companies over 10 years and use the money to promote renewable energy programs and energy conservation and efficiency.

To garner broader Democratic support, Pelosi scrapped proposed changes in the way royalties are collected from offshore federal oil and gas leases.

Also dropped was a provision that would have made it harder for the federal government to designate nationally significant corridors for pipelines and electric power lines.

Pelosi, bowing to Democratic lawmakers in oil-producing regions, agreed to some changes in the way permits are issued for energy leases on federal land.

Congress two years ago gave new authority for the federal government to designate energy corridors to ease power grid congestion. The House Resources Committee, in its portion of the bill, had put severe restrictions on that authority, provisions the Democrats agreed to scrap.

“The speaker has sought to bring about Democratic unity” on the energy package, said a Pelosi spokesman, Drew Hammill.

The Democratic bill avoids, however, several of the toughest energy fights by not including mandates to increase automobile fuel economy, use more ethanol as a substitute for gasoline, or require electric utilities to use renewable fuels.

These issues could still be raised as amendments when the legislation comes up for a floor vote, probably Friday. It is likely to be the last House action before lawmakers depart for the monthlong summer recess.

Many Democrats had opposed provisions they viewed as detrimental to domestic oil and gas production, including a requirement that energy companies pay cash for oil and gas taken under federal offshore drilling leases.

A coalition of 47 moderate to conservative Democrats, known as the “Blue Dogs,” had threatened to withhold support unless the royalty-in-kind option was preserved and changes were made in the lease permitting and energy corridor provisions.

With strong GOP opposition to the bill, Pelosi needs the Blue Dogs’ support to fulfill a promise to get energy legislation passed before the August recess.

Rep. Jim Matheson, D-Utah, co-chairman of the Blue Dogs’ energy task force, said that while he still had concerns, he felt Pelosi had “moved a long way in improving this bill.”

Republicans have ridiculed the Democrats’ energy package, saying it ignores the need to produce more domestic oil, coal and natural gas and expand nuclear power. Rep. Joe Barton, of Texas, the ranking Republican on the Energy and Commerce Committee, dubbed it the “non-energy energy bill.”

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