Energy bill draws from same old well

The energy bill likely to emerge from the U.S. House of Representatives today repeats all the mistakes of earlier versions stymied by the Senate, except in miniature. The federal government’s budget deficit has gotten so bad even Congress recognizes the nation’s taxpayers can no longer subsidize everybody’s pet project.

The price tag on the 2004 model energy bill exceeded $23 billion.

But even at $8.1 billion over 10 years, this bill keeps the energy policy of the United States motoring down a road that leads back to 20th-century dependence on fossil fuels. Despite high oil, natural gas and coal prices, too many incentives included in the bill are directed toward those industries and too little toward technologies that should provide an increasing share of the nation’s energy needs.

President Bush, die-hard oil man that he is, has acknowledged in recent comments the U.S. must find alternatives. “The hydrocarbon society will still be with us, but it can’t be with us to the extent it is today,” he told a CNBC interviewer Monday.

Bush said as much again yesterday in a speech to the U.S. Hispanic Chamber of Commerce, and in a Statement of Administration Policy released later in the day. The statement, in fact, was remarkably blunt in pointing out White House concerns with the House bill.

“The administration believes the energy bill should not contain any new taxpayer subsidies for oil-and-gas exploration,” it says, advising instead that lawmakers focus on measures that will increase the diversity of energy sources. The president’s budget calls for $6.7 billion in tax breaks, 72 percent for alternative technologies like wind and solar and hybrid-fuel vehicles. Conservation measures also receive additional support.

But House leadership has not forgotten its old friends. Only about 5 percent of the incentives included in the House energy bill are dedicated to new technologies. Coal, oil, natural gas and nuclear energy producers get the rest. At the insistence of powerful Texas Reps. Tom DeLay and Joe Barton, the bill also includes provisions that will protect refinery owners from claims — possibly as high as $29 billion — that fuel additive MTBE has contaminated municipal water supplies.

Drilling in the Alaska National Wildlife Refuge, near and dear to the president and House leadership alike, is included in the measure.

They also agree on provisions that would give the Federal Energy Regulatory Commission control of transmission line siting, as well as placement of the terminals where imported liquid natural gas can be off-loaded. More exploration of potential offshore oil and gas reserves would be permitted. The Bush Administration has been consistently anti-federal, and Northwest officials should be concerned with all three.

The region has also benefited from tax credits given wind-generation projects, which will provide hundreds of megawatts of clean energy to Avista, Puget Sound Energy, and other utilities. Without the credit — one cent per kilowatt — those projects probably would not have been possible. The credits disappear in the House bill.

Assuming there is no last-minute change of direction in the House, it will again be up to the Senate to pass an energy plan closer to the president’s, and closer to the needs of the United States. In the past, ANWR drilling and the MTBE liability protections were deal-killers, but Republicans now have a stronger majority. If the process follows the script set the last few years, House and Senate members who negotiate differences between their versions will again try to square a circle. The president wants a bill he can sign by July.

President Bush said Wednesday a magic wand may be the only way gasoline prices will come down any time soon. The energy bill should at least offer some hope that will happen in the not-so-distant future. The House bill will not get us there. An Energy Information Administration analysis of a similar bill found U.S. dependence of foreign supplies would decline only marginally by 2025. That’s not much of a return on a multi-billion-dollar investment.

Anxious as the president is to have an energy bill, he will probably sign one even if it rejects his own priorities. Here we come, 20th century.