Domenici calls bill "formidable step forward" but House MTBE provision presents big hurdle

A wide-ranging energy package has advanced in Congress, with Senate committee approval of a measure that seeks to stimulate domestic production, promote conservation and guard against breakdowns of the nation's electricity grid. The measure, which the Energy and Natural Resources Committee approved May 26 on a 20-1 vote, will go to the floor shortly after the Memorial Day recess, says panel Chairman Pete V. Domenici (R-N.M.), where amendments are expected.

"I think this is a rather formidable step forward," Domenici told reporters, adding that something like the committee's version is likely to pass the full Senate. President Bush has said he wants a final measure on his desk this summer.

The bipartisan backing on the committee will help Domenici in his quest. The committee's top Democrat, Jeff Bingaman--also from New Mexico--says the legislation encourages supply and technologies for "clean energy" and important provisions to increase energy efficiency.

The big hurdle ahead will be working out a compromise with the House, which passed an energy bill in April that has significant differences from the Senate panel's. Among the contentious issues will be whether to provide liability relief for makers of the gasoline additive methyl tertiary butyl ether (MTBE). The House bill has MTBE protections; the Senate version doesn't. Domenici says all parties know the MTBE issue is "a real stumbling block" in the path toward a final bill. He says it's unresolved--"If I knew how to do it, we would already do it," he says. But he adds that "some ideas, some parameters" are emerging from lawmakers about how to deal with the matter.

Democrats also criticize the House bill for not doing enough on conservation. Sen. Maria Cantwell (D-Wash.) says the Senate committee bill is "better than the status quo and a good floor," but adds, "The House bill represents something way below the floor." She praises the Senate panel's version for cracking down on electricity market manipulation, and says the House measure falls short in that area.

Among other provisions, Committee members from the Farm Belt praised the bill for setting a federal standard for producing ethanol and other renewable fuels, pegging production at 8 billion gallons by 2012. Sen. Tim Johnson (D-S.D.) calls that mark "robust but very doable." To placate critics from California, that state would be exempt from the fuels standard during the summer. The House bill sets the 2012 national standard at 5 billion gal. Last year, domestic production totaled 3.4 billion gal.

Energy legislation has had a difficult road in Congress. In late 2003, an estimated $30-billion package died in the Senate, because of opposition to an MTBE provision, the overall size of the bill and other factors. This time, Domenici has held the legislation to limits set earlier this year by the Budget Committee. He says it provides direct federal spending of $2 billion, and another $11 billion in tax breaks to be added by the Finance Committee on the Senate floor.

For electric power, the committee-passed bill sets mandatory reliability regulations and repeals the 1935 Public Utility Holding Company Act, but gives the Federal Energy Regulatory Commission authority to review utility company mergers.

For nuclear power, it extends Price-Anderson Act liability protection for Dept. of Energy contractors and Nuclear Regulatory Commission licensees through 2016 and authorizes construction of a test reactor at DOE's Idaho National Laboratory to evaluate advanced reactor technology.

The bill also has measures to spur oil and gas production, including incentives for "marginal" wells, for natural gas in shallow waters of the Gulf of Mexico.

(Photo courtesy of Senate Energy and Natural Resources Committee)