Everything you wanted to know about the House Dem energy bill
September 16th, 2008UPDATE #2: The Center for American Progress Action Fund letter on the bill is here. Bottom line: CAPAF supports it.
UPDATE #1: The full bill is here.
The thorough Congressional Quarterly summary is here.
A shorter summary from the House Select Committee on Energy Independence and Global Warming is here.
And then E&E News (subs. req’d) has a good piece on the bill, reprinted below:
House Democrats plan votes today on a bill that relaxes offshore oil and gas drilling bans while expanding renewable energy programs, the first test of a strategy that makes limited concessions on coastal drilling amid a relentless GOP push.
The bill introduced late last night includes measures designed to shore up support from various wings of the Democratic caucus. The bill is scheduled to be considered under a “closed” rule that bars amendments but allows a GOP alternative to be offered in the form of a motion to recommit.
It now includes a prohibition on oil-and-gas leasing in the Georges Bank off the New England coast. Another new provision would lift a ban on commercial oil shale leasing in several Western states, but only if those states pass laws to allow it.
Natural Resources Chairman Nick Rahall (D-W.Va.), a cosponsor, said he was confident Democrats had the votes for the bill. The other cosponsors are Energy and Commerce Chairman John Dingell (D-Mich.), and Reps. George Miller (D-Calif.) and Gene Green (D-Texas).
Rahall said he believed Democrats could hold their members together against a likely Republican substitute that would allow more expansive new drilling. “I think we will,” he told reporters. “We are just about there.”
“I think Democrats can say that by voting against [the GOP plan], they will have voted for a much more responsible, accountable and comprehensive piece of energy legislation,” Rahall added.
The outer continental shelf provisions of the Democrats’ bill would allow drilling greater than 100 miles off the Atlantic and Pacific coasts, and between 50 and 100 miles if states pass laws to allow it.
The bill retains a ban on leasing in the eastern Gulf of Mexico that generally extends at least 125 miles from Florida. That ban is in place until 2022 under a 2006 law that opened more than 8 million acres of the gulf acreage to new leasing.
Republicans say the bill is too light on new production and have called for a much more significant dismantling of leasing bans that currently cover both coasts and the eastern Gulf of Mexico. President Bush removed executive-level restrictions over the summer.
Republicans also argue the absence of offshore revenue-sharing for coastal states in the Democrats’ bill means there is no incentive for states to opt-in to leasing. Rep. Adam Putnam (R-Fla.), the Republican Conference chairman, slammed the Democratic plans yesterday. “It leaves most production off the table,” he said at a Capitol Hill forum sponsored by the Consumer Energy Alliance, an industry-backed advocacy group. “This is too important an issue to just slap a Band-Aid on.”
The bill also includes other measures that have drawn consistent GOP opposition and veto threats, including repeal of oil industry tax breaks.
House Speaker Nancy Pelosi (D-Calif.) has been cobbling together a package aimed at keeping both conservative, pro-drilling members and liberal members of her caucus in the fold.
Left-leaning Democrats who have opposed wider drilling are emphasizing the “clean” energy provisions. The bill also extends a suite of renewable energy tax and energy efficiency tax credits and funds the provisions through repeal of oil industry incentives.
Lawmakers who are reluctantly embracing wider drilling also cite a GOP push not to renew leasing bans that have for over two decades been extended annually through Interior Department spending bills.
Other provisions of the bill include the sale of 70 million barrels of oil from the Strategic Petroleum Reserve and language aimed at ensuring payment of royalties from late 1990s deepwater gulf leases that currently allow royalty waivers regardless of energy prices.
The plan also includes a renewable electricity standard that requires utilities to supply escalating amounts of power from sources like wind and solar energy. The standard in the bill is 15 percent by 2020, although about a fourth can be met with efficiency measures.
One liberal member, Rep. Raúl Grijalva (D-Ariz.), said he would probably vote for the bill, but did not appear happy about it, saying Democrats “rolled over” too quickly on the drilling issue by giving away too much, too soon.
Oil shale, Georges Banks, Section 526
The bill on the floor today contains significant additions from summaries of draft bills the Democratic leadership circulated last week.
For instance, it would allow the Interior Department to issue commercial leasing rules for oil shale, which is found in abundance in Colorado, Wyoming and Utah.
But like the offshore drilling proposal, states would have to opt-in to oil shale leasing on federal lands within their borders before it can proceed. Rep. Jim Matheson (D-Utah) has been a proponent of removing the ban on oil shale leasing that was contained in last year’s omnibus spending bill.
The ban’s supporters say Interior is proceeding too fast toward leasing despite questions about the environmental effects of developing the resources. But the bans have come under attack by lawmakers who claim it keeps a potentially massive source of supply off-limits.
Another provision in the bill would add the Georges Bank, a key fishing ground, to the areas where leasing would not be allowed. The bill notes this area is “one of the largest and historically important fishing grounds of the United States.” It leaves it up to the Commerce Department, which oversees the National Oceanic and Atmospheric Administration, to identify the specific boundaries of the area.
Elsewhere, the bill includes a clarification of a law that prohibits federal agencies from buying greenhouse gas-heavy fuels. Section 526 of last December’s major energy bill bars federal contracts to buy alternative or synthetic fuels that have higher lifecycle greenhouse gas emissions than conventional petroleum fuels.
The bill clarifies that Section 526 does not cover contracts for “generally available” petroleum fuels that are not predominantly produced from unconventional sources. The change is aimed at alleviating concerns over how Section 526 may affect imports of Canadian oil sands.
This change was also included in defense policy legislation the House approved in May, and the Senate version of the annual defense authorization measure is currently on the Senate floor.
Another provision is aimed at addressing some members’ concerns about restrictions contained in the expansion of the federal biofuels mandate in last year’s energy bill. That bill expanded the federal renewable fuels standard to require that 36 billion gallons of renewable transportation fuels are used annually by 2022.
The new bill includes a “Sense of Congress” that the definition of what constitutes renewable biomass in the RFS “could be improved,” adding that it should be as “inclusive as possible” to help meet the advanced biofuels portion of the RFS.
“Cellulosic biofuels can and should be produced from a highly diverse array of feedstocks, allowing every region of the country to be a potential producer of this fuel,” it states.
$18 billion tax plan
Democrats said the $18 billion tax incentives package largely resembles energy tax measures that have cleared the House in the past, although there are also some changes.
The tax incentives include a one year extension of the expiring production tax credit for wind projects, a three year extension for other energies — such as biomass and geothermal and landfill gas — and also allows wave and tidal energy projects to qualify.
Other provisions include tax credits for plug-in vehicles; extension of the biodiesel production tax credit; extension of several residential and commercial energy efficiency credits; and more than $1 billion in credits for coal projects capable of capturing carbon emissions.
The package extends solar project investment tax credits for eight years and also provides new incentives for using natural gas-fired vehicles.
The bill includes “energy security bonds” aimed at helping states fund installation of natural gas fuel pumps at retail gas stations. Rep. Rahm Emanuel (D-Ill.) has pushed for wider programs to encourage natural gas-fired vehicles.
The costs are offset by repealing a major tax incentive — the Section 199 deduction — for the largest integrated oil companies, and oil companies owned by foreign governments, which is aimed at Citgo Petroleum Corp. Citgo is a a subsidiary of Venezuela’s state-owned oil company.
The deduction would be frozen at 6 percent for other oil and gas companies. The Section 199 repeal and freeze are estimated to raise almost $14 billion over a decade, according to the House Ways and Means Committee.
The bill would also change tax rules regarding income on oil and gas projects in other countries, which would raise more than $3.8 billion over a decade, according to the committee.
A deal on how to extend energy tax credits and a host of other tax incentives has long been stalled in the Senate. But Majority Leader Harry Reid (D-Nev.) said last week he wanted to move an energy tax package ahead of planned debate on broader energy bills in the Senate this week.
A spokesman for Reid said last night that he is “hopeful” he can reach an agreement with Minority Leader Mitch McConnell (R-Ky.).
Related Posts:
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- Gang-of-10 deal, Part 4: Pick of B.O.S.S. Palin and McCain’s speech make it a must for Dems
- House Dems rolled by GOP on drilling?
- Reid floats votes on 3 drilling plans next week
- Senate Dems push bipartisan drilling bill
- Congressional Dems get smart on pushing “all of the above” energy vote
- Gang-of-10, Part 3: More good stuff, some ugly
- Gang-of-10 Part 2.5: House GOP says drill here, drill now, compromise … later
- The good, the bad and the ugly of the Gang-of-10 drilling deal, Part 2: Something for nothing?
- Since offshore oil is de minimis, why shouldn’t Obama and the Dems make a deal? Part 1
