The Washington Post (pg. D1)  [Printer-friendly version]
September 5, 2007


House, Senate Must Reconcile Widely Varying Legislation

By Steven Mufson, Washington Post Staff Writer

Congress looks set to tackle energy legislation -- again.

Galvanized by a combination of $70-a-barrel crude oil prices, $3-a-
gallon gasoline, war in the oil-rich Middle East and growing anxiety
about climate change, House and Senate leaders have pushed through
separate energy bills.

The only problem is that the two bills don't match, and the
differences could prove tough to iron out.

The Senate voted for raising average vehicle fuel efficiency to 35
miles a gallon; in the House, disagreement among Democrats prevented
such a measure from reaching the floor.

The House voted for a renewable-energy standard for utilities; support
in the Senate fell short.

The Senate voted to raise the minimum level of ethanol consumption
nationwide; a House version never came to a vote.

The House voted to increase royalty and tax payments for oil companies
and give tax incentives for renewable resources and energy efficiency;
the Senate didn't adopt any tax package.

Energy legislation remains a priority for Senate Majority Leader Harry
M. Reid (D-Nev.), who is fighting to stop the construction of new coal
plants in his home state, and for House Speaker Nancy Pelosi (D-
Calif.), who has vowed to pass legislation that would help the
environment and promote what she has called "energy independence."

"It's one of her priorities," said Drew Hamill, a Pelosi spokesman.

But some lobbyists wonder whether energy will get drowned out by
debates on Iraq and appropriations.

"I think it's a priority for the Democrats and for the president. They
all talk about energy," said Bob Dinneen, president of the Renewable
Fuels Association, which represents the ethanol industry. "But this is
a political town and a political season, and who knows?"

Further uncertainty surrounds procedural issues. To reconcile the
House and Senate bills, one chamber may have to pass an additional
measure, creating an opportunity for mischief by the legislation's

Meanwhile, leading lawmakers are vowing to draw up climate-change
bills, and these could also be at odds. Sens. Joseph I. Lieberman (I-
Conn.) and John W. Warner (R-Va.) are teaming up to cap greenhouse-gas
emissions and allow companies to trade credits and allowances; House
Energy and Commerce Committee Chairman John D. Dingell (Mich.) wants
to combine a cap-and-trade system with hefty taxes on emissions.

President Bush's support remains doubtful on both the energy and
climate-change fronts. The White House is opposed to most energy bill
provisions. It has warmed to the idea of action on climate change as
opinion polls and scientists register greater concern. But Bush still
opposes unilateral U.S. action. He is to meet with leaders of
developing nations this month to discuss climate change, but he has
set December 2008, his last full month in office, as a target for
reaching an international agreement.

Warner's decision last week to retire dealt a blow to advocates of
climate-change legislation, who had hoped that the senior Republican,
an opponent of past climate-change bills, would rally other GOP
members behind a new measure.

"It probably takes the wind out of the sails of any effort to pass
major global-warming legislation in this Congress," said Frank
O'Donnell, president of Clean Air Watch. "It will be tough for a lame
duck to pull more Republicans into the effort."

On the energy bill, many lobbyists have been wondering whether Pelosi,
who favors the Senate fuel-efficiency clause, will let Dingell, who
backs a much milder version, lead the House conference team or pass
him over for veteran House Ways and Means Committee Chairman Charles
B. Rangel (D-N.Y.).

Another possibility is that senior leaders will bypass the conference
committee, the same way they handled the recent lobbying and ethics
bill. Congressional leaders would make a deal, the Senate would amend
and pass its own bill, and Pelosi would put it to a vote in the House
without allowing amendments. Leadership aides said no decisions have
been made on how to proceed.

Aside from the four major items in dispute, debate rages on other
clauses with huge consequences for companies in the energy industry.
Public Citizen, a nonprofit watchdog group, has decried provisions
that would expand loan guarantees for "innovative technologies,"
which, it says, could include as much as $50 billion for nuclear

Loan guarantees are limited by the Federal Credit Reform Act. The
Senate bill would remove the limits, giving discretion to the Energy
Department. The House version makes clear that nuclear projects
shouldn't be excluded from the list of innovative technologies.

In June, the White House budget office said that changes to the loan-
guarantee program could "significantly increase potential taxpayer
liability" and "eliminate any incentive for due diligence by private
lenders." But Sen. Pete V. Domenici (R-N.M.), a booster of nuclear
power, threatened to block the administration's nomination of Jim
Nussle as director of the Office of Management and Budget unless the
office altered its stance. In August, OMB Deputy Director Stephen S.
McMillin wrote a letter to Domenici with concessions. He said the
administration would let the guarantees cover up to 100 percent of a
project loan, instead of 90 percent; set aside loan guarantees for
nuclear projects in addition to its $9 billion appropriation request;
and let industry use them in later years.

Domenici voted yesterday in favor of Nussle's nomination, which was
approved 69 to 24.

The solar industry has also been pressing Congress for benefits,
urging it to extend the 30 percent income tax credit for renewable
energy to 2016. This is included in the House energy bill but not the

"The ITC is critical," said Avi Brenmiller, president of Solel Solar
Systems, which has signed a long-term contract to sell power from a
550-megawatt solar park in the Mojave Desert to Pacific Gas and
Electric. Construction is to start in 2009, and power won't flow until

It has been 30 years since President Jimmy Carter delivered a call to
action on energy, calling the issue "the moral equivalent of war."
Like today's lawmakers, he warned that the United States risked
compromising its foreign-policy latitude, the economy and the

Yet the nation's energy picture is more dire today. The United States
last year spent eight times as much on oil imports as it did 30 years
ago. Oil imports account for more than 60 percent of U.S. consumption,
up from just 25 percent when Carter spoke. The average American today
uses about 70 barrels of oil a year; Carter said that in 1977 the
average American used the energy equivalent of 60 barrels of oil.

Copyright 2007