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New Congress Looks Toward Energy Policy Reforms January 8, 2007

Posted by notapundit in Congress, Politics, US News.

WASHINGTON (Dow Jones)–The new Democratic-controlled Congress has wasted no time spelling out their goals for U.S. energy policy changes.

Just three days into the new session, key lawmakers are promoting several energy proposals that reaffirm the new Congress’ commitment to clean energy and energy efficiency.

Senate Majority Leader Harry Reid,D-Nev., in the opening hours of the new session Thursday, introduced a message bill, or statement that previews the Democrats’ legislative agenda. It outlines the Democrats’ plans to increase vehicle fuel efficiency, roll back oil industry subsidies, boost renewable energy and address climate change concerns.

The bill, called the National Energy and Environment Security Act of 2007, “will take an aggressive approach to reducing America’s dependence on oil, especially foreign oil, and putting more advanced technologies in the hands of consumers,” Reid said.

The Democrats have not detailed exactly how they plan to address climate change, but say they plan to hold several hearings to create legislation that would reduce emissions of heat-trapping gases, particularly carbon dioxide.

Meanwhile, Sen. Barack Obama, the Illinois Democrat exploring a 2008 presidential run, made clear he wants to boost the use of ethanol in cars.

A bill Obama introduced last week would require the oil industry to blend 60 billion gallons of ethanol and biodiesel annually in motor vehicle fuel by 2030. The Biofuels Security Act of 2007, co-sponsored by Sens. Tom Harkin, D-Iowa, Richard Lugar, R-Ind., and Joseph Biden, D-Del., also aims to increase the number of gasoline stations that carry E-85, a gasoline blend made of 85% ethanol and 15% gasoline.

Unpopular With Oil

The bill is unpopular with oil companies who argue that it’s unfair to force them to sell at their gas stations an alternative fuel they didn’t even produce. They also argue that the ethanol market is too tight to meet strict mandates.

“Energy policy based on mandates is no recipe for success,” said Charles Drevna, executive vice president of the National Petrochemical and Refiners Association. “Renewable fuels are not the answer to America’s supply problems nor can they deliver on the promise of energy independence.”

Vehicle fuel efficiency is also a top Democratic priority this year, said incoming Senate Energy and Natural Resources Committee Chairman Jeff Bingaman,D-N.M.

“Efficiency is a key element in our energy policy that deserves more attention in this Congress than we have been able to give it before,” Bingaman said during a recent speech on the Senate floor.

Democrats don’t have a monopoly on energy efficiency legislation, however.

Sen. Ted Stevens, R-Alaska, has introduced a bill that would increase Corporate Average Fuel Economy Standards to 40 miles a gallon by 2017. Stevens’ proposal also calls for a voluntary national greenhouse gas trading scheme to address climate change.

“We think it’s a new day and a very good day for energy efficiency,” said Kateri Callahan, president of the Alliance to Save Energy. “The Democrats have said they want to work in a bipartisan fashion. To have a leading Republican step up and introduce legislation is a very good signal that they can actually do this.”

Similarly, former Environmental Protection Agency Administrator Carol Browner also took Stevens’ action as good news.

“I take that as an indication that the issue of climate change is an increasing reality for members,” Browner said. “He has not been a leader on the environment and to suddenly come forward means he’s seeing something, that his constituents are seeing something.”

Efficiency, Alaska Wilderness

Meanwhile, Obama plans to reintroduce this week a separate bipartisan bill, the Fuel Economy Reform Act. The measure would raise fuel economy by 1 mile a gallon, a year.

Although President George Bush has indicated he would consider moderately raising CAFE standards, a key obstacle could be John Dingell, D-Mich., who is chairman of the House Energy and Commerce Committee and a long-time defender of automakers’ opposition to higher CAFE standards.

A senior Democrat is already seeking to protect the Alaska wilderness from oil and gas drilling. The bill, by Rep. Edward Markey,D-Mass., would permanently protect Alaska’s Arctic National Wildlife Refuge from energy development.

“Our addiction to oil is real and enduring and still largely untreated,” Markey said in a statement. “Drilling in the refuge would amount to a declaration that we remain in denial about this addiction, its impact on our planet and our obligation to future generations.”

The House also plans to advance a significant energy bill that’s expected to be considered Jan. 18 on the House floor.

The proposal, to be introduced by new House Speaker Nancy Pelosi,D-Calif. as early as this week, would repeal oil industry subsidies, push energy companies to pay royalties to the federal government and set up a fund for renewable energy and energy efficiency.

Key provisions of the bill are still under discussion and haven’t been released to the public. Nevertheless, the Democrats have set a deadline for the bill’s approval within the chamber’s first 100 hours, with no plans to hold committee hearings.

Republicans and oil industry officials have argued the lack of hearings is unfair.

“A thoughtful process is all we’re asking for,” said American Petroleum Institute Chief Economist John Felmy, who argues that the oil industry is being unfairly targeted by the Democrats. It’s inappropriate to advance that energy bill “in a 100-hour dash,” he said.

By Maya Jackson Randall, Dow Jones Newswires


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