Passage of Senate bill means time to reconcile

By Kathleen Davis, Associate Editor

In late April, the U.S. Senate finally passed its own version of an energy bill. (The House had done so last August.) With the 88 to 11 vote, Congress will now be looking ahead to reconciling two very different takes on President Bush’s energy policy.

Can the two be merged into one solid political force by the House-Senate committee to be lead by Republican Louisiana representative Billy Tauzin? That is the overwhelming question at this crucial juncture, and no one seems to have the answer just yet.

A comparison

Both bills are swimming in tax incentives. The Senate bill includes $14 billion to be divided between renewable energy, conservation and fossil fuel energy producers while the House version has a more traditional take. Its $33 billion leans heavily on oil, gas, coal and nuclear.

Other interesting points in the Senate version include the repeal of PUHCA (the Public Utility Holding Company Act)-which has been both a help and a headache to energy companies since 1935-and the requirement that generators produce 10 percent of their electricity from renewable fuels (wind, sun, biomass) by 2019.

While the repeal of PUHCA sounds drastic, it seems to have significant bipartisan support in both House and Senate bills and is likely to remain in any consolidated draft. Helping this along significantly is the fact that its governing body, the Securities and Exchange Commission, also supports the repeal.

The Senate bill’s renewables requirement, on the other hand, is not popular with Republicans, for the most part, and is likely to be noticeably absent at the end of the debate, according to industry analysts.

Significantly absent in the Senate bill is any provision for drilling in ANWR (the Artic National Wildlife Refuge), a hot button issue of Bush’s policy from day one. The House bill took the Eisenhower-established refuge head-on, choosing to open 1.5 million acres of it to drilling, although only 2,000 acres will be used at a time.

Both sides are setting up the big guns on this issue. Senate Majority Leader Tom Daschle has stated in no uncertain terms that Democrats will rally to block a package that includes drilling in ANWR. Republicans, on the other hand, have firmly held their ground on the issue and make no bones about their plan to continue the push.

The buzz

With a House bill that follows President Bush’s energy policy like a blueprint and a Senate bill that sees Bush’s policy as more of a touchstone, the stage is set for a rollicking rumble over the issues. And while the public face of government agencies has been one of general- although occasionally lukewarm-support, more and more voices are speaking out against the national energy policy that seems to be emerging through the haze.

One of those dissenting voices belongs to the National Energy Policy (NEP) Initiative, a non-governmental, non-partisan, foundation-supported project organized by the Rocky Mountain Institute and the Consensus Building Institute. Bringing together experts in the areas of energy, policy and environment, the NEP Initiative has their own plan of attack, one that points a more accusatory finger at the transportation sector and looks to push deregulation forward hand-in-hand with a carbon tax or a “cap and trade” system.

NEP spokesmen are generally unhappy with the bills and their potential future offspring. If given a choice, however, the Senate bill gets the edge, mostly due to its renewables context.

“Both the House and Senate bills need to recognize the extraordinary opportunity we now have to move to a clean, secure energy sources-domestic sources of renewable energy, energy efficiency and efficient distributed energy systems,” stated Daniel Kammen, an NEP expert and a professor of energy and society at the University of California, Berkeley, as well as the director of their renewable and appropriate energy laboratory.

“A key aspect of the transition to the clean, domestic energy system is a renewable energy portfolio standard as endorsed by Senator Bingaman [the major sponsor of the Senate bill].”

While the renewables forum seems to be as sticky an issue as ANWR in some sectors, the most doubt about the policy lies not in the separate bills themselves but in the reconciliation and follow-through-or lack thereof.

“Over the past 30 years, I have witnessed concern for energy and the environment and calls to action come and go,” stated Mike Davis, CEO of Avista Labs and former assistant secretary for the U.S. Department of Energy from 1989 to 1993. “For all the intellectual capacity, great planning and political rhetoric brought to bear, I have not seen any sustaining leadership or progress.”

Peter Bradford, NEP expert and visiting lecturer in energy policy at Yale commented, “Trying to get a sensible energy policy by reconciling these two bills would be like trying to get to Salt Lake City on an ocean liner from New York to London.

“The fundamental principles of cost-effectiveness, security and environmental prudence embraced in the NEP Initiative are barely recognized in the Senate version and are contravened in the House bill. I hate to say this after the effort that has gone into the legislation, but Congress would do better to just start over.”

Kammen, Davis and Bradford all work with the NEP Initiative. More information on the organization can be found at its web site www.nepinitiative.org.

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