Energy Daily

GOP Tide Turns Energy Picture...

`Redder' Hill May Revive Energy Bill, ANWR, Clear Skies

BY CHRIS HOLLY

With their sweeping victories in Tuesday's election,
congressional Republicans are optimistic about moving long-
stalled energy legislation and are likely to make a new effort
early next year to open Alaska's Arctic National Wildlife Refuge
to oil production, GOP aides said Wednesday.

While prospects may have improved for moving the energy bill,
Republicans also will have a better chance of moving President
Bush's long-dormant Clear Skies legislation, which has been
stalled in the Senate due to opposition from Democrats and
moderate Republicans, energy lobbyists predicted.

Having gained up to four new Senate seats, Republicans could
hold a 55-44-1 majority in January. At press time, the contest
between Sen. Lisa Murkowski (R-Alaska) and former Alaska Gov.
Tony Knowles (D) had not been decided. By Wednesday afternoon,
Murkowski was leading Knowles by about 10,000 votes out of more
than 230,000 votes cast, with 98 percent of Alaska's precincts
reporting.

While the extra muscle does not guarantee that Senate
Republicans can achieve the 60 votes needed to overcome a
Democratic filibuster, sources on and off Capitol Hill agreed
Wednesday that the beefed-up GOP majority will make it easier to
move the energy bill.

In the House, Republicans will arrive in Washington in January
with at least 11 new seats to further strengthen their
stranglehold on that body. Several House races remain undecided.

House Energy and Commerce Committee Chairman Joe Barton (R-
Texas), who easily won re-election, said repeatedly before the
election that he has little interest in turning again to energy
legislation, saying that his focus will be on re-authorizing the
Clean Air Act and the Telecommunications Act and reforming
Medicaid.

Barton spokesman Larry Neal said Wednesday that Barton's main
priority will be to try to enact the energy bill when the 108th
Congress returns for a lame-duck session on November 16.

"It's the chairman's intention to spend as much effort as
necessary to pass the energy bill during the lame-duck session,"
Neal said. "That is where his focus is."

But Marnie Funk, spokeswoman for Senate Energy and Natural
Resources Committee Chairman Pete Domenici (R-N.M.), said it is
unlikely that the Senate will take up the energy bill during the
lame-duck session.

When the 109th Congress is launched in late January, Funk said
she expects a strong push on the Arctic National Wildlife Refuge
(ANWR) and other policy provisions in the energy bill.

Domenici and Sen. George Allen (R-Va.), chairman of the National
Republican Senatorial Committee, both said before the election
that if the GOP were to gain a Senate seat, they would try again
on ANWR in January.

With the likelihood of gaining four seats, however, a push on
ANWR and other policy provisions is almost certain, most likely
as part of budget reconciliation legislation, Funk said.

"Oil prices remain high, gasoline prices remain high and coal is
selling at twice what it was a year ago in the wholesale
market," Funk said. "I don't think those signals are going away,
so I think it is very likely you will see a serious move on ANWR
in the budget reconciliation process. I see strong momentum on
energy legislation in the Senate next year."

A veteran Republican lobbyist for the electric utility industry
cautioned that one of the key provisions that helped sink the
energy bill in the Senate-a provision to waive liability for
producers of methyl tertiary-butyl ether (MTBE), a gasoline
additive that has leaked into underground drinking water
supplies-remains controversial.

House leaders such as Barton and Majority Leader Tom DeLay (R-
Texas), refused to remove the MTBE provision from the
legislation, leading to a stalemate within the Republican party
on the bill.

But some sources have suggested that the need to reauthorize the
Clean Air Act could provide an opportunity for Republicans to
break the MTBE impasse.

"Barton could address the MTBE issue in the Clean Air Act
reauthorization bill, removing a key impediment to the energy
bill," the GOP lobbyist said. "I've been on my soapbox for some
time saying that MTBE is an environmental issue, not an energy
issue, since the reason it came to market was that the [1990
Clean Air Act Amendments] created a new reformulated gasoline
program."

The energy bill's electricity title remains relatively less
controversial than other provisions in the bill. Broad
bipartisan support exists for making now-voluntary rules for
maintaining grid reliability mandatory and enforceable.
Republicans also are keen to repeal the Public Utility Holding
Company Act, and their new majorities may allow them to achieve
that long-held goal.

And with three new GOP senators from southern states, that
region's concerns about restructuring the electric industry
could lead lawmakers to tinker with the electricity compromise
engineered in 2002 by Rep. Billy Tauzin (R-La.), then-chairman
of the House energy panel.

A Democratic utility lobbyist conceded that Republicans will
feel emboldened by their new majority to try again to open ANWR
and enact other long-sought energy provisions such as new
funding for clean coal technology, incentives for building a new
generation of nuclear power plants and the removal of
constraints on domestic oil and natural gas production.

But this lobbyist said it is even more likely that the
Republicans will make a concerted push to enact Bush's Clear
Skies legislation, which calls for roughly 70 percent reductions
in sulfur dioxide, mercury and nitrogen oxides.

"I think you'll see them come right out of the gate with Clear
Skies and mount a big push on that," the Democratic lobbyists
said. "I think they'll say this is our baby and this is the
time."

How successful Republicans will be, of course, depends in large
part on how Democrats react to their crushing defeat, which saw
Bush recapture the White House after a bitterly fought, divisive
campaign.

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