CQ TODAY – ENERGY
May 3, 2007 – 8:38 p.m.
Senate Energy Legislation Stalls in Face of Iraq Debate, Slow Committees

The Senate leadership acknowledged Wednesday that energy legislation might not make it to the floor this month, despite mounting concerns about higher gas prices.

Majority Leader Harry Reid, D-Nev., had previously indicated that he wanted to pass an energy package before Memorial Day. The showdown over funding for the war in Iraq has squeezed an already tight floor schedule, however, and progress on energy legislation has been slow at the committee level.

The Energy and Natural Resources Committee has approved an energy bill focused on biofuels, efficiency and greenhouse gas management, but other panels have not marked up their own measures. Environment and Public Works Chairwoman Barbara Boxer, D-Calif., introduced a competing biofuels bill Thursday. The Commerce, Science and Transportation panel has yet to report out legislation that would boost automotive fuel efficiency, and the Finance Committee is unlikely to produce its bill on energy tax incentives until June.

The delays could put Democrats in a political bind if gasoline prices continue to rise. The latest round of quarterly earnings reports by major oil companies has only increased the pressure: On Thursday, Royal Dutch Shell Plc. announced first-quarter earnings of $7.3 billion, 6 percent above the same period last year. Last week, Exxon Mobil Corp. reported $9.3 billion in quarterly profits, 10 percent higher than 2006.

Senate Democrats led by Dianne Feinstein of California already have rolled out price-gouging legislation, and the House Energy and Commerce Committee could take the matter up in the coming weeks.

“In my home state of California, gas prices spiked to $3.99,” Feinstein said this week. “Yet energy companies continue to reap record profits.”

Sen. Charles E. Schumer of New York, who chairs the Democratic Senatorial Campaign Committee, said price-gouging legislation is on the agenda. He declined to say whether it might be part of a larger energy package. “Because of high gas prices, it’s something we are looking at,” he said.

The average for a gallon of regular unleaded gas is now close to $3. High crude oil prices also have forced the Energy Department to delay efforts to fill up the Strategic Petroleum Reserve, which was tapped in 2005 after hurricanes knocked out oil production in the Gulf of Mexico. After two failed solicitations, the department announced this week that it intends to delay purchases until the end of the summer driving season.

Feinstein’s bill would give the Federal Trade Commission authority to define and prosecute price-gouging, currently handled at the state level. Numerous FTC investigations have turned up little evidence of widespread price-gouging, and the agency warned lawmakers last year that federal price-gouging legislation could be difficult to enforce and ultimately counterproductive when it comes to protecting consumers.

That did not dissuade the House from passing a price-gouging bill last year, and Bart Stupak, D-Mich., is pushing the issue again. As chairman of the Energy and Commerce Oversight and Investigations panel, he plans to hold hearings on the matter this year.

As it did last year, the panel also is investigating a pipeline spill that forced British oil giant BP Plc. to close down part of the production at Prudhoe Bay in Alaska last summer, causing prices to spike briefly and spurring further ire among lawmakers already angry about record oil-industry profits.

Stupak blasted the company Thursday for allegedly withholding information regarding cost-cutting measures that might have contributed to pipeline corrosion.

Meanwhile, the biofuels debate took a twist Thursday as Boxer introduced her own bill. Environmental groups that opposed the Energy panel’s bill endorsed hers.

Boxer’s bill would require the EPA to increase the existing renewable fuels mandate to as much as 35 billion gallons annually by 2025, according to the panel.

The bill would require all renewable fuels to be at least 20 percent cleaner than gasoline in terms of greenhouse gas emissions; as more of the fuels were used, the standard would go up to as much as 75 percent. The bill also would mandate as much as a 10 percent reduction in overall greenhouse gas emissions from the nation’s transportation fuels by 2020, while requiring federal agencies to study and mitigate potential environmental impacts.

The Energy panel’s bill, sponsored by Chairman Jeff Bingaman and ranking Republican Pete V. Domenici, both of New Mexico, would require the use of 36 billion gallons by 2022. The bill would require new ethanol plants to produce fuel that is at least 20 percent cleaner than gasoline in terms of greenhouse gases, but that did not satisfy environmental groups.

Boxer said her panel has a key role to play in ensuring that biofuels are developed properly but downplayed jurisdictional issues. “I don’t get that excited about it,” she said. “How we get there is less important to me than making sure we do get there.”

Bingaman’s office offered the same message, suggesting that there will be plenty of time to amend the bill on the floor.

Jeff Bingaman will be glad to work with any senators who have an interest in biofuels,” said spokesman Bill Wicker. “This is not a contest. This is an effort to get good, solid legislation.”

Source: CQ Today
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