House committees OK energy legislation

Wed Apr 13, 2005 07:38 PM ET 

WASHINGTON (Reuters) - House of Representatives committees moved
forward on Wednesday with legislation to update U.S. energy
policy, allowing oil drilling in an Alaskan refuge and providing
$8 billion in tax breaks for energy-saving technology.

The committees approved parts of an energy package that will be
folded into a broad bill that aims to boost domestic oil and
natural gas supplies, which will be sent to the House floor for
a final vote next week.

Despite objections from Democratic lawmakers, the House
Resources Committee voted to allow oil companies to drill in
Alaska's Arctic National Wildlife Refuge.

Giving oil companies access to the refuge's 1.5-million acre
coastal plain and billions of barrels of crude oil is a key part
of the Bush administration's national energy plan to help reduce
U.S. oil imports.

The committee voted 30 to 13 against a Democratic-sponsored
amendment to drop the ANWR drilling language.

The panel's bill calls for the Interior Department to lease to
oil companies at least 200,000 acres in the coastal plain within
two years after the legislation is signed into law.

The House Energy and Commerce Committee was working late on
Wednesday to finish its part of the House's broad energy bill.

The panel voted earlier in the day against requiring U.S.
automakers to ratchet up fuel efficiency to a fleet average of
33 miles per gallon by 2014 from the current 27.5 mpg for
passenger cars.

Democrat Edward Markey of Massachusetts, who sponsored the
proposal, said higher fuel standards were needed to reduce oil
demand and make the United States less dependent on foreign
petroleum suppliers like OPEC.

"The price of oil is controlled by OPEC," said Markey. "We can't
break (the cartel) up."

U.S. oil demand averages 21 million barrels a day, with imports
supplying three of every five barrels consumed.

With gasoline demand the biggest component of oil consumption at
about 40 percent, many environmentalists say the only way to
significantly reduce petroleum demand is to boost vehicle fuel
efficiency.

But committee Democrats from Michigan, where the auto industry
is based, said Congress can't mandate what type of automobiles
Detroit should make.

"People are driving around in big cars, because they like them,
because they feel safe," said Democrat John Dingell of Michigan.

Opponents to the amendment said higher mileage requirements
would force automakers to produce dangerous, small cars to meet
the stronger fuel standard.

"You'll never get your soccer moms and soccer kids in there,"
said Democrat Bart Stupak of Michigan, referring to the feared
subcompact vehicles. "It's not what Americans want."

The panel was also expected to defeat a Democratic-led move to
strike a provision in the bill that protects major oil companies
from lawsuits over the water-polluting gasoline additive MTBE.

House Majority Leader Tom DeLay of Texas wants the MTBE
liability waiver be part of energy legislation, even though the
Senate rejected an energy bill last year largely because of the
MTBE protection.

The House's final energy bill would still have to be reconciled
with much different energy legislation in the Senate that is
still being written. The Senate Energy and Natural Resources
Committee is expected to vote on its chamber's bill next month.
--------------------------

Grassley accelerates tax schedule to meet Domenici's energy
plans

Mary O'Driscoll, E&E Daily senior reporter

The Senate quickened its energy bill pace yesterday with word
the Energy and Natural Resources Committee will go to markup in
May, and the Finance Committee will have its tax package ready
by the time the energy bill gets to the floor.

Finance Committee Chairman Chuck Grassley (R-Iowa), who just
last week indicated he did not plan any action on tax policy
until the latter part of this year, told reporters yesterday the
energy tax component of the energy bill will be ready by the
time the energy panel completes its work on this year's
comprehensive energy policy bill.
>>>>>>>>>>>>>>>>>
Grassley said he does not have any number yet as to how big the
tax package should be, but he did say it would not include any
new programs, and largely consist of an extension of existing
tax benefits the industry already has.
>>>>>>>>>>>>
However, Grassley acknowledged that there will be pressure to
attach the CLEAR Act, the tax break for hybrid, fuel cell and
alternative fuel vehicles championed by Sen. Orrin Hatch (R-
Utah) to the bill.
>>>>>>>>>>>>>
And he added that the Senate bill's renewable fuel standard,
which in 2003 required a 5 billion gallon ethanol market and now
has support for a 6 billion gallon ethanol market requirement,
will be amended on the Senate floor to require an 8 billion
gallon ethanol market. Grassley is a key supporter of the
ethanol industry and incentives to help the industry, though he
added that lawmakers will have to keep in mind the criticism
they encountered two years ago when they supported an energy
bill that cost a total of $30 billion.

Reporter Ben Geman contributed to this report.

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