ENVIRONMENT & ENERGY DAILY (partial)

Tuesday, July 19, 2005

 

SPOTLIGHT

1. ENERGY POLICY

Energy conference strikes middleground on clean coal power funding

Mary O'Driscoll, E&E Daily senior reporter

The House-Senate energy conference appears to have split its differences over clean coal power technology funding, according to a draft proposal to be considered today when the committee starts marking up the conference report.

The draft language for the coal title of the energy bill calls for 70 percent of the proposed $1.8 billion Clean Coal Power Initiative to go to gasification programs. These include gasification combined cycle, gas fuel cells and turbine combined cycle, gasification coproduction, and hybrid gasification, with the remainder of the money targeting other "clean coal" power projects.

The compromise appears to split the difference between the House bill, which had called for a 60-40 split, and the Senate bill, whose funding was divided 80-20.

Clean coal funding is but one of the issues lawmakers will tackle today as the energy conference, chaired by House Energy and Commerce Committee Chairman Joe Barton (R-Texas), gets down to business on seven energy bill titles that represent the easiest portions of the massive bill. Barton hopes to complete the bill before a monthlong August recess starts at the end of next week.

Other language to be discussed at today's conference meeting agreed to by House and Senate staffers covers energy efficiency, nuclear power, Energy Department management, personnel and training, vehicles and fuels, and hydrogen. Lawmakers hope to quickly wrap up these issues to progress to oil and gas, electricity and renewable portfolio standard, and climate change during Thursday's markup session.

Also awaiting approval is a deal that Barton is working on to provide liability protection for the producers of the controversial fuel oxygenate MTBE, which has leaked into groundwater supplies around the country, in exchange for a federal trust fund, partially funded by the MTBE industry, for cleanup of existing pollution sites.

That deal is key to final passage of the energy bill, as liability protection for MTBE producers in the 2003 energy bill gets much of the blame for the Senate's failure to pass the conference report.

Also unresolved is the tax package. The Senate effectively ignored White House calls for a $6.7 billion package when it passed a 10-year collection of tax breaks scored at $18.4 billion, with $4.37 billion in offsets. The House tax package was $8 billion but essentially constituted a "placeholder" until the conference could come up with a deal acceptable to all sides.

Also unclear is the fate of the Senate's incentives title -- a specific section giving DOE broad authority to make loan guarantees to a variety of energy projects, ranging from renewable energy systems to advanced nuclear energy facilities to coal gasification combined-cycle technology to carbon sequestration technology. Lawmakers and staffers on the Senate side are particularly proud of that plan, but the House has no similar provisions in its bill.

At this point, negotiators appear to be waiting for final word on the size of the incentives title that would send staff into meetings to figure out what programs get funded. But Senate energy tax staffers right now are working on the tax package for the highway bill reauthorization, so it is unclear just when the energy tax section will be completed.

With the tight conference schedule, Barton last week said he might schedule sessions for this weekend to resolve outstanding issues. It is unclear at this time whether that will be necessary. The conference must leave enough time next week for senators and House members to review the report and vote on it by the anticipated July 29 recess adjournment.

Other key points for tomorrow's energy conference debate:

      Nuclear: The nuclear power title shows where the House and Senate essentially blended their respective nuclear titles, by taking much of the Senate's language on the "Next Generation Nuclear Plant" program and the House's nuclear security language, which includes fingerprinting requirements for people with unescorted access to facilities, authorization of automatic weapons for security personnel regardless of state laws, expanded penalties for sabotage and attempted sabotage, and a new federal security study and corresponding enhancement of security standards if needed.

      Hydrogen: The hydrogen title outlines programs and goals for creating a hydrogen market for vehicle, utility, commercial and residential applications by 2020. The language outlines $3.3 billion in authorized appropriations to cover hydrogen supply, fuel cell technology, demonstration, codes and standards, as well as reviews of the program both internally and externally, through the National Academy of Sciences.

      Energy efficiency: The draft language retains the provision inserted into the House energy bill that requires the start of Daylight Savings Time the first Sunday of March and ending the last Sunday of November.

      DOE management: The draft language retains the Senate bill provisions creating a new position of Undersecretary for Science, with two assistant secretaries covering science and nuclear power. This title governs technology transfer and the additional positions reflect an emphasis on science and a recognition of the importance of nuclear power within the agency.

      Vehicles and fuels: There is little controversy in the draft language in this title; however, Sen. Ron Wyden (D-Ore.) at last week's first conference committee meeting said he would introduce an amendment here that would increase the corporate average fuel economy (CAFE) standards by 1 mile per gallon per year in an effort to cut back on gasoline consumption in the United States.