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Energy Policy Overview (11-19-02)

Energy policy involves many issues of interest to the geoscience community, including research and development in coal, oil, gas, geothermal, and hydroelectric power; public lands, environmental regulations, climate change, and nuclear waste disposal.  Energy may be constantly in use by lawmakers and citizens, but only during times of crisis does it come into the policy limelight. Rising electricity and heating bills, last year's brownouts in California, and national security issues are continuing to keep the energy crunch in the spotlight.  Given that there is a new Administration and new Congress, these events will provide them a chance to promote a comprehensive national energy policy.

Most Recent Action

For more recent information, see the energy policy overview for the 108th Congress at www.agiweb.org/gap/legis108/energy.html.

The New York Times and E&E Daily both report that the incoming chairmen of the Senate Budget Committee and Senate Energy and Natural Resources Committee -- Sen. Don Nickles (R-OK) and Sen. Pete Domenici (R-NM), respectively -- may seek to use a filibuster-proof budget bill to obtain approval of oil drilling in the Arctic National Wildlife Refuge (ANWR). Known as budget reconciliation, this type of bill is exempted from filibusters, which require a 60-vote majority to break. Opening ANWR was included in such a bill in 1995, but that bill was vetoed by President Clinton. ANWR opponents led by Sen. John Kerry (D-MA) and Sen. Joe Lieberman (D-CT) have repeatedly threatened to filibuster any legislation to open ANWR. In test votes earlier this year, a provision to drill ANWR as part of comprehensive energy legislation did not obtain even a simple majority (see AGI Special Update 5-8-02), and it is unclear that ANWR supporters will have additional votes in the new Senate. The proposal by Nickles and Domenici, however, signals that this issue is likely to come up early in the new year. (11/19/02)

From an AGI Special Update (11-15-02): A conference committee of representatives and senators began meeting last summer to work out differences between the House and Senate versions of comprehensive energy legislation (H.R. 4) intended to establish a new national energy policy. Before breaking for the elections, the conference committee had worked out compromise language on hundreds of pages of bill text but had yet to find consensus on some of the largest issues -- such as the House provision to open the Arctic National Wildlife Refuge (ANWR) for oil and gas exploration and Senate provisions regarding climate change. The election results seemed to confirm the talk before the elections that the energy bill would be pushed off to the 108th Congress. But on November 13th, Conference Committee Chairman Rep. Billy Tauzin (R-LA) attempted to revive the debate by suggesting passage of a stripped-down bill that would include only provisions related to the Price-Anderson Act (insurance for nuclear power plants) and pipeline safety. Senate conferees quickly rejected the suggestion as did the White House, which indicated that any bill not including electric utility restructuring would be vetoed. Energy legislation will likely become one of the early issues for the 108th Congress.

In early October, Rep. Billy Tauzin (R-LA), the chairman of the bicameral conference committee on comprehensive energy legislation (H.R. 4), continued to express high hopes that the committee would be able to hammer out differences between the House and Senate versions before Congress adjourned on October 11th. But prospects dimmed with compromise elusive on some of the biggest provisions. Conferees began meeting at the end of June but did not shift into high gear until after the August recess. They have made some headway in crafting compromises on many fronts, including the bulk of the provisions regarding energy research and development. Among the more contentious matters, they have agreed on a Corporate Average Fuel Economy (CAFE) standards provision that would require the conservation of 5 billion gallons of oil over six years beginning in 2006. It would also require that the National Academy of Sciences study the effects of imposing revised CAFE standards. Five major issues remain: electricity restructuring, drilling in the Arctic National Wildlife Refuge (ANWR), climate change, ethanol liability, and tax incentives. There has been some talk of House Republicans consenting to Senate Democrats on climate change provisions in exchange for the House ANWR provision, but initial votes suggest that such a trade has little chance of making it into the final bill. Even if a provision for oil and gas exploration in ANWR made if out of the conference, the Senate would still have to break a promised filibuster by Senators Joseph Lieberman (D-CT) and John Kerry (D-MA). Adding to the mix is pressure from the White House to finish the energy bill with ANWR in it -- Interior Secretary Gale Norton has requested that the president veto any energy bill that does not contain an ANWR provision. Currently on deck are negotiations on reformulated gasoline and national renewable portfolio standard provisions. Despite the best efforts by conferees, it seems like there is a long road ahead before a completed bill will make it to the House and Senate floors. (10/4/02)

On September 23rd, the American Association of Petroleum Geologists (AAPG) held its second annual president's conference in Washington D.C. to discuss environmental issues relating to energy development. The conference, held on Capitol Hill at the Reserve Officers Association Building, brought leading petroleum geologists together with policymakers from federal and state agencies, Capitol Hill, and non-governmental organizations. AAPG President Dan Smith introduced the half-day session, which began with presentations on current energy supply setting and projected domestic energy needs and supplies. Subsequent speakers discussed both historical and current environmental practices along with specific examples of how petroleum companies are handling environmental impacts offshore along the Atlantic coast of Canada and onshore in the urban setting of Long Beach, California. The lunchtime speaker was environmental attorney Victor Yannacone. AAPG plans to produce a summary of the presentations for publication. The final report of the last year's energy summit is available at http://www.aapg.org/divisions/dpa/testimonies/2001/010423_energysummit.html. (10/4/02)

On July 23rd, the House Resources Subcommittee on Energy and Mineral Resources held a hearing on the availability of bonds to meet federal requirements for mining, oil and gas projects. The federal government requires adequate financial guarantees, often in the form of bonds, from mining and oil companies operating on federal lands. The bonds, issued by the surety bond industry, ensure that the obligations of mining and oil companies for post-production site cleanup and reclamation of federal lands are met. Witnesses testified that the surety bond industry has recently deteriorated due to increasing financial risk caused by long-term operation site uncertainty. The resulting paucity of surety bonds has led to the sinking of mining industry cash into the financial guarantee requirements, resulting in inefficient use of capital and mining industry decline. Chairwoman Barbara Cubin (R-WY) warned that the consequences of this inefficiency on domestic energy production are severe. A spokesman from the Department of the Interior (DOI) noted that the agency has convened a Bonding Task Force to address the problem. (7/29/02)

The House Committee on International Relations held a hearing on oil diplomacy on June 20, 2002.  The first panel presented the current goals of energy policy in the US; the second group offered their concerns and suggestions for improvement of US energy policy.  There was widespread agreement that dependency on OPEC oil must be reduced.  While some felt diversifying non-OPEC oil sources could easily fill US oil demands, others felt it was essential that energy conservation play a role in future energy policy as well.  Increasing Corporate Average Fuel Economy (CAFE) standards and encouraging technical innovations were two popular solutions for conserving energy.  Diversification of energy sources was also a solution voiced -- specifically the increased use of nuclear, solar, and wind power.  There was a positive sentiment at this hearing that, if given the opportunity and incentive, there was great hope that Americans would come up with new technologies and methods of conserving energy that would be a win-win on many fronts, including foreign policy, the US economy, competitiveness of US products in the global market, the environment, employment, and quality of life. (6/20/02)

The House-Senate Conference Committee for H.R. 4 has scheduled its first meeting for June 27th, but it is expected that this meeting will be primarily a symbolic meeting without much substance. Meetings had been delayed initially while the House decided on its conferees and again when there was a dispute between Rep. Billy Tauzin (R-LA) and Senator Jeff Bingaman (D-NM) regarding who should chair the conference committee. It is customary for the two chambers to alternate the chairmanship for major legislation. The House was claiming that the Senate chaired the 1992 Energy Policy Act (P.L. 102-485) and the Senate countered that the House had chaired the 1995 Alaska Power Administration Asset Sale and Termination Act (P.L. 104-58), meaning that it was now the Senate's turn for the chairmanship. On July 19th, it was announced that Tauzin will serve as chair but will work closely with Bingaman. Conferees are expected to begin business meetings after Congress returns from the July 4th receess. (6/20/02)

On June 12th, the House Leadership announced their members of the House-Senate Conference Committee for H.R. 4. In total the House will send 44 conferees, including 28 Republicans and 16 Democrats. Energy and Commerce Chairman Billy Tauzin (R-LA) will chair the conference committee. He is joined from the committee by Ranking Member John Dingell (D-MI) and senior colleagues Michael Bilirakis (R-FL), Joe Barton (R-TX), Fred Upton (R-MI), Cliff Stearns (R-FL), Paul Gillmor (R-OH), Richard Burr (R-NC), Henry Waxman (D-CA), Ed Markey (D-MA), Rick Boucher (D-VA), Bart Gordon (D-TN), and Bobby Rush (D-IL). Agriculture Committee Chairman Larry Combest (R-TX) will be joined by Ranking Member Charles Stenholm (D-TX) and Rep. Frank Lucas (R-OK). Armed Services Committee Chairman Bob Stump (R-AZ) will be joined by Ranking Member Ike Skelton (D-MO) and Rep. Curt Weldon (R-PA). Budget Committee Chairman Jim Nussle (R-IA) will be joined by his colleagues Reps. Gil Gutknecht (R-MN) and Dennis Moore (D-KS). Education and the Workforce Ranking Member George Miller (D-CA) will be joined by his colleagues Reps.Howard McKeon (R-CA) and Charles Norwood (R-GA). Financial Services Chairman Mike Oxley (R-OH) will be joined by Ranking Member John LaFalce (D-NY) and Rep. Marge Roukema (R-NJ). Judiciary Chairman James Sensenbrenner (R-WI) will be joined by Ranking Member John Conyers (D-MI) and Rep. Lamar Smith (R-TX). Resources Committee Chairman Jim Hansen (R-UT) will be joined by Ranking Member Nick Rahall (D-WV) and Rep. Barbara Cubin (R-WY). Science Committee Chairman Sherwood Boehlert (R-NY) will be joined by Ranking Member Ralph Hall (D-TX) and Rep. Roscoe Bartlett (R-MD). Transportation and Infrastructure Committee Chairman Don Young (R-AK) will be joined by Ranking Member James Oberstar (D-MN) and Rep. Thomas Petri (R-WI). Ranking Member Charles Rangel (D-NY) will represent the Ways and Means Committee, and Majority Leader Tom DeLay (TX) will also join as a House conferee. (6/13/02)

By a vote of 88 to 11, the Senate passed its version of energy legislation, paving the way for a House-Senate conference to work out a final bill. The large number of supporting votes reflected a desire by both the Senate leadership and the White House to complete action and move to conference where the administration and congressional Republicans hope to restore key provisions found in the House counterpart, H.R.4. Unlike the House-passed bill, S. 517 does not include a provision opening the Arctic National Wildlife Refuge (ANWR). Instead, the bill calls for opening a natural gas pipeline from the North Slope of Alaska to the state's southern coast. The Senate bill contains $14 billion worth of tax incentives for energy efficiency and increased domestic energy production, heavily weighted toward renewable energy sources. H.R.4 includes $33 billion in tax breaks with a greater emphasis on incentives to increase production from more traditional energy sources. (4/26/02)

In early April, the national energy policy debate was in full swing in the Senate as they debated the Democratic leadership's Energy Security Policy bill, S. 517.  ANWR is among the most hotly debated issues along with reformulated gasoline standard (RFG), fuel efficiency standards, and renewable portfolio standards (RPS). Also adding to the highly partisan ANWR debate was the leadership's attempts to force a cloture vote on the issue before moving ahead with the other provisions of the energy policy. If Sen. Frank Murkowski (R-AK), ranking member of the Senate Energy and Natural Resources Committee and the leading proponent of opening ANWR, plans to offer an amendment regarding exploration and development of ANWR, it most likely will be introduced in the second week of April, when the Senate returns from its spring recess. Reformulated gasoline amendments have been submitted to the Senate; however, the amendments have some environmental organizations questioning the details.  A provision of the RFG amendment states that renewable fuel producers are waived of any unforeseen public health effects or environmental damage.  Future amendments are expected to surface that exclude this legal waiver to RFG industries.  More information on reformulated gasoline policy is available at AGI's Update on MTBE.   RPS provisions in S.517 are also somewhat controversial and would require energy suppliers to use 15 percent of power from renewable resources such as biomass, wind, solar and geothermal by 2013.  Sens. Jon Kyl (R-AZ) and Frank Murkowski (R-AK) unsuccessfully proposed RPS amendments to S. 517 that would have limited RPS goals to only 10 percent by 2020. (4/3/02)

On March 8, 2002, the Senate approved an amendment for the reauthorization of the Price-Anderson Act until the year 2012.  The Price-Anderson Act is the nation's  insurance program for the commercial nuclear power industry. It is scheduled to expire in August, 2002. (4/3/02)

Two recent reports are sure to further fuel the Senate debate. A new biological report by the U.S. Geological Survey claims that ANWR exploration and drilling would threaten Porcupine caribou, musk oxen, snow geese and polar bears. A report (PDF) by the Energy Information Administration (EIA), requested by Sen. Frank Murkowski (R-AK), addresses the effect that oil from ANWR would have on the nation's dependency on foreign oil.  The report found that ANWR oil production would reduce the percentage share of net imports by 2 percent on average -- dropping imports to 60 percent versus 62 percent if ANWR is not drilled -- and by 5 percent at most. (4/3/02)

On March 13, 2002, the House Science Subcommittee on Energy introduced H.R. 3929, the Energy Pipeline Research, Development, and Demonstration Act.  H.R. 3929, co-sponsored by Reps. Ralph M. Hall (D-TX) and Lamar Smith (R-TX), aims to advance pipeline infrastructure research and development (R&D) and streamline the repair and recovery process after a potential pipeline failure.  Currently, the Department of Energy (DOE) manages pipeline inspections and the Department of Transportation (DOT) manages oil and natural gas pipeline R&D.  DOE is interested in eliminating pipeline inspection from the agency consolidating all pipeline safety programs to DOT.  On the Senate side, Sen. John McCain (R-AR) attached S. 235, a pipeline safety bill, to the Senate energy bill S.517.  House Democrats voiced opposition to S. 235 saying inspection should be managed by the DOT, rather than industry.    (3/18/02)

Senate Democrats inserted S.1766 into a small bill that was already pending on the floor: S. 517, which started life as a $30 million authorization of a national laboratory partnership program but which has become the vehicle for the massive, 530-page energy bill. Several hundred amendments are pending, and deals are being made at a rapid pace. Despite rumors that a deal involving ANWR might be in the offing, no confirmation has been forthcoming. (3/8/02)

Senate Democrats introduced their own comprehensive energy package on December 5th, 2001.  S. 1766, entitled the Energy Policy Act, emphasizes efficiency, conservation, and the development of alternative and renewable energy resources.  The bill differs in many fundamental ways from the House-passed energy legislation, H.R. 4.  The most notable difference is that S. 1766 continues the ban on drilling in the Arctic National Wildlife Reserve (ANWR).  It would also provide $10 billion to $15 billion in tax breaks and incentives to encourage energy production and energy efficiency.  The bill is a work in progress with many major issues still to be worked out.  In the area of climate change, S. 1766 would establish new federal programs (more below).  According to Senate Majority Leader Tom Daschle (D-SD), a number of committees will have input into the final version, which will not be completed until Congress reconvenes in January.  For more details on S. 1766, see the comprehensive energy legislation summary below.   (1/17/02)

Previous Action in the 107th Congress
Republican attempts to force a vote on energy legislation and the ANWR issue went awry on December 3rd when the Senate denied a motion to invoke cloture -- a procedure limiting debate -- on an amendment that would have attached House-passed energy legislation (H.R. 4) to a pension reform bill (H.R. 10).  The motion was presented by Senate Minority Leader Trent Lott (R-MS) who hoped to get the 60 votes needed to block a Democrat-threatened filibuster.  However, Republicans abandoned the effort when it became apparent that they would not even get the 50 votes needed to send a pro-ANWR message. Instead, those who had already voted for the motion switched their vote, and the motion was defeated in a 94-1 vote. The energy/ANWR amendment was subsequently ruled non-germane (not relevant to the pending legislation) and dropped from consideration.   If the cloture motion would have passed, debate on the amendment would have been limited to 30 additional hours prior to voting.  In an attempt to explain the Republican shift, Sen. Frank Murkowski (R-AK) argued that invoking cloture would have blocked the full and open debate that energy policy deserves.  The motion's defeat is a clear blow to the Bush Administration's energy goals because the strength of the pro-ANWR vote in the Senate is now highly questionable.  It is not clear whether Republicans will try to attach energy policy to other pending legislation or drop the issue until early next year when Senate Majority Leader Tom Daschle (D-SD) has promised floor time.  For now, Lott and Murkowski continue their threats to file the energy bill as an amendment to other bills, including the economic stimulus package. (12/5/01)

Refusing Republican demands to bring energy legislation to the floor, Senate Majority Leader Tom Daschle (D-SD) made up his mind not to hold an energy debate before the 107th Congress adjourns its first session sometime in early December.  Daschle argued that the Senate's agenda is too full with pressing issues such as the economic stimulus package, anti-terrorism and bioterrorism legislation, the farm bill, and must-pass appropriation bills. But he committed to take up comprehensive energy legislation between January 22nd and the President's Day holiday in mid-February.  Unsatisfied Republicans held a news conference on November 28th to urge the Senate to pass energy legislation that would allow drilling in the Arctic National Wildlife Refuge (ANWR), calling it a matter of national security in the face of war.  Sen. Frank Murkowski (R-AK) firmly believes that "next year is not soon enough for energy," and promised that "if the leadership will not set a date certain this year, [he] will use whatever procedural means are available to make that occur."  Senate Republicans lived up to this threat, making several attempts to attach the House-passed energy bill (H.R. 4), which includes a provision to allow drilling in the Arctic National Wildlife Reserve (ANWR), as an amendment to pending legislation.  They first targeted the economic stimulus package, but when that stalled, all eyes moved to the farm bill (S.1731).  When action on that was delayed, Senate Minority Leader Trent Lott (R-MS) filed H.R. 4 as an amendment to a railroad pension bill (H.R. 10) that Daschle had put on the floor for consideration.  A scheduled cloture vote on December 3rd will decide whether the energy amendment will be considered.  Unlike a normal vote, the cloture vote requires a three-fifths majority to pass the Senate, reflecting a Democrat-threatened filibuster to block a vote on ANWR.  Republicans have used this tactic as well -- Murkowski has threatened to filibuster other bills if Daschle does not schedule floor debate on energy legislation before adjournment. (11/29/01)

In a November 13th decision, the U.S. Supreme Court declined to hear an appeal by petroleum companies to open federal lands in Montana's Rocky Mountain Front to oil and gas exploration.  The decision upholds a May ruling by the Ninth Circuit Court of Appeals that oil and gas companies have no "natural right" to bid for leases on Forest Service land, or to compel the Forest Service to lease its land for mineral exploration.  Environmentalists fear that the effect of the ruling could be muted by a provision in H.R. 4, the House-passed omnibus energy bill,  that would effectively increase drilling in Western forests. The provision transfers authority from forest supervisors to the U.S. Department of Agriculture's (USDA) Under Secretary for Natural Resources and Environment Mark Rey, stripping local managers of the power to make decisions about drilling for oil and natural gas in national forests.  According to a November 16th Greenwire, Senate Energy and Natural Resources Committee spokesman Bill Wicker called the provision "a pretty lousy idea because the forest supervisors are the ones who better understand the lands."  The Senate Democrats' version of comprehensive energy legislation does not contain such a provision, and Wicker said that he knows of no plans for amendments to add the measure. (11/19/01)

On November 1st, 2001, the House Science Subcommittee on Energy held a hearing on "U.S. Energy Security: Options to Decrease Petroleum Use in the Transportation Sector."  A panel of witnesses representing auto manufacturers, the electric vehicles industry, the Department of Energy (DOE), and environmental groups gave testimony concerning the relationship between national security and the nation's dependence on imported petroleum with a focus on the transportation sector.  Subcommittee Chairman Roscoe Bartlett (R-MD) reported that the U.S. imports 56 percent of its petroleum, the majority of which goes to transportation fuels.  This reliance presents a major problem since world oil production rates are expected to peak later this decade, while demand will continue to rise.  Witnesses agreed that certain options such as electricity, biofuels, and enhanced vehicle fuel efficiency exist to decrease petroleum use and oil imports, but much more research and development is required to make them a reality.  Witnesses expressed support for H.R. 4 and H.R. 2326.  Testimony was also heard on the status of the public-private sector Partnership for a New Generation of Vehicles (PNGV) and the U.S. Council for Automotive Research (USCAR), an industry research and development consortium.  A more detailed summary is available on the AGI Hearings on Energy Policy webpage.  (11/6/01)

The 107th Congress began with a flurry of hearings regarding the development of a national energy policy.  The GOP and Democrats both proposed omnibus energy legislation and President Bush convened an energy task force headed by Vice President Dick Cheney.  The main issues being discussed and debated were the opening of the Arctic National Wildlife Refuge (ANWR) and other restricted public lands for oil and gas exploration, streamlining the permitting process for transmission lines and gas pipelines, reducing carbon dioxide, nitrous oxide, sulfur dioxide, and mercury emissions from power plants; and licensing new generation facilities.

On February 27, 2001, Sen. Murkowski introduced his National Energy Security Act of 2001, (S.388 and S.389). The pair of bills, cosponsored by twelve senators, including Sen. John Breaux (D-LA), aims to decrease the nation's reliance on foreign oil to 50% by 2011 through a suite of policy changes.  Press attention has focused on the proposed opening of the ANWR.  Other provisions in S.388 and S.389 include tax incentives for domestic oil and gas production, measures to expedite construction of gas pipelines, measures to promote energy conservation, incentives for research and development into "clean coal" technology, and many others addressing a range of energy sources. (3/5/01)

Congressional hearings in January/February 2001 focused on collecting information on energy issues, specifically addressing the current energy crisis in California.  Energy issues discussed included increasing domestic supply, reviewing national demand and exploring the role of renewable energy sources and efficiency technology as all part of a comprehensive energy policy.

On March 22nd, Senate Minority Leader Tom Daschle (R-SD) and Sen. Jeff Bingaman (D-NM) introduced the Comprehensive and Balanced Energy Policy Act of 2001 (S.596 and S.597) as a counter-measure to the energy legislation introduced by Sen. Frank Murkowski (R-AK).  In the legislation, energy efficiency and emissions reductions are encouraged through tax incentives and regulations that reduce the input of greenhouse gases to the atmosphere. The bill also bolsters the efforts of the federal government to get "clean energy technology" into developing countries that are expected to increase their greenhouse gas emissions in next decade. Other measures in the bill aim to streamline pipeline and dam permitting, and maximize oil and gas production on state and private lands. (3/26/01)

The congressional hearings in March 2001 began to explore issues relating to the use of public lands and the outer continental shelf to increase domestic supply of fossil fuels as part of developing a national energy policy.  The Senate Environment and Public Work Subcommittee on Clean Air, Wetlands, Public Property, and Nuclear Safety held a hearing focusing on aligning the Clean Air Act and national energy policies.

On April 23rd, the American Association of Petroleum Geologists (AAPG) held a summit to discuss United States energy policy.  The conference brought together a range of perspectives on how energy issues should be confronted in the future. Along with petroleum resources, many other types of energy generation were discussed including nuclear power, coal, renewable resources, and conservation.  Speakers from the Department of Energy, the U.S. Geological Survey, the Senate Energy committee, professional societies and prominent geologists from industry and government presented policy recommendations throughout the day.  A summary is available and the agenda and related information are available at http://www.wvgs.wvnet.edu/www/energy/index.html. (5/8/01)

On May 17th, President George W. Bush released his National Energy Policy (NEP), which was assembled by a task force that included several members of the president's Cabinet and was headed by Vice President Dick Cheney.  Cheney wrote in the opening note of the report that it "envisions a comprehensive long-term strategy that uses leading edge technology to produce an integrated energy, environmental and economic policy."  The report makes 105 recommendations of which 12 can be accomplished by executive order, another 73 can be accomplished by agency action, and the remaining 20 recommendations require congressional action.  More information is available in an AGI special update. (5/17/01)

On May 24th, the Interior Department's Outer Continental Shelf (OCS) Policy Committee passed a resolution urging the Secretary of the Interior to study the effects of lifting existing moratoria for five offshore areas adjacent to California, Florida, North Carolina, and New England. The external advisory committee is chaired by Alabama State Geologist Don Oltz. As reported in Greenwire, the committee's rationale for their recommendation was the need to meet the nation's growing demand for natural gas. The resolution states that the Minerals Management Service, "in consultation with industry and affected states, should identify the five top geologic plays in the moratoria areas, and if possible, the most prospective areas for natural gas in the plays that industry would likely explore if allowed. These five areas would provide the basis for a pilot to see if limited activity...is possible in the moratoria areas." The report also calls for expediting the permitting process for an Alaskan natural gas pipeline to the lower 48 states. The resolution can be obtained at http://www.mms.gov/mmab/policy-committee/Resolutions/OCSPCresolutions.htm. The resolution is based on a report by the committee's Natural Gas Subcommittee at: http://www.mms.gov/mmab/policy-committee/Subcommittee%20Reports/subcommittee_reports.htm. (6/6/01)

In anticipation of the release of the President's National Energy Policy, Senate and House committees held a series of hearings in April/May 2001.  The energy hearing focused on the exploring potential domestic fossil fuel reserves (specifically oil and natural gas) in order to increase both short- and long-term energy supply.  Nuclear energy and renewal of the Price-Anderson Act also were addressed.

On June 21, 2001, the United States Geological Survey (USGS) and the American Association of Petroleum Geologists (AAPG) held the third briefing in their "Science, Society, Solutions" series.  The title of the briefing was "Future Energy Resources: Where Will They Come From?" and aimed to present information on the role of the USGS in assessing future coal, oil, and gas resources.  The briefing was sponsored by Representatives Tom Davis (R-VA), Barbara Cubin (R-WY), and Ralph Hall (D-TX).  Speaking at the briefing were Charles Groat, Director of the USGS; Vicki Cowart, State Geologist and Director of the Colorado Geological Survey; and Dick Bishop, a geologist with Exxon Mobil Exploration Company.  The briefing looked at efforts by the USGS, state survey, and industry to locate domestic sources of energy.  The speakers also discussed the general role and qualities of the USGS that make it a valuable agency in energy research, such as the quality of science performed and the unbiased nature of the resulting data. Energy-related topics that were also discussed during the meeting were U.S. coal output and quality, natural gas, and methane hydrates--which are naturally-occurring ice-like solids that trap methane within their crystal structure resulting in an "ice" that can be burned.  The USGS currently has an Energy Resources Program that serves to explore new avenues and sources to deal with with the increase in demand for energy resources.

On June 28th, President Bush officially presented his energy plan to Congress, that included the provisions outlined in the Cheney report, the submission makes a supplementary budget request of $300 million for energy-efficiency research programs that were heavily cut in the president's original budget request. Even as the president's plan made its official debut, those aspects that were directed at increased fossil fuel development came under bipartisan fire in Congress. By a 242-173 majority, the House supported an amendment to the Interior appropriations bill to block future oil, gas, and coal leases in national monuments. By a 247-164 vote, they supported a moratorium on the proposed Gulf of Mexico Lease Sale 181 off the Alabama and Florida coasts.  In response, Interior Secretary Gale Norton announced on July 2nd that the lease sale would be reduced from the proposed 6 million acres to 1.5 million acres, all more than 100 miles from Florida. On a related note, neither the House nor Senate versions of the Interior appropriations bill includes funds requested by the president to conduct oil and gas studies in Alaska's ANWR. (7/9/01)

On June 28th, the House Science Subcommittee on Energy Ranking Member Rep. Lynn Woolsey (D-CA), introduced the Renewable Energy and Energy Efficiency Act of 2001 (H.R. 2324).  "This bill would boost research, development and demonstration programs with the goal of providing 20% of the nation's stationary sources of energy from non-hydropower renewable sources."  The bill authorizes research and development programs for wind, solar, and geothermal energy efficient technologies as competitive alternatives to fossil fuel. (7/2/01)

In response to the release of the President's National Energy Policy (NEP), the congressional hearings in June 2001 focused on collecting information about proposed energy sources.  During several hearings representatives from the Department of Energy testified on the specific recommendations presented in the NEP.  A series of hearing focused on research and development, technology and introduced legislation dealing with fossil fuel, nuclear, and renewable energy sources to increase the energy supply.  The House Energy and Commerce Subcommittee on Energy and Air Quality also held a hearing on decreasing the demand side of the national energy equation through conservation and energy efficiency technology.

Congressional hearings in July 2001 continued to deal with the debate on energy policy and major pieces of energy legislation.  The House Resources Committee held a hearing to discuss H.R. 2436, the Energy Security Act. The Senate Energy and Natural Resources Committee held two hearings to gather information and discuss research and development provisions of energy related bills. (7/18/01)

On July 17th, the House Resources Committee passed the Energy Security Act (H.R. 2436).  The bill, introduced by Chairman Jim Hansen (R-UT), is part of the energy package the House hopes to pass before the August recess. Greenwire reported the bill is "designed to facilitate energy exploration in federal lands and calls for opening the 1.5-million-acre coastal plain of ANWR with various environmental stipulations, including use of ice roads, environmental reviews and reclamation of the land."   (7/19/01)

On July 17th, the National Research Council (NRC) released the report Energy Research at DOE: Was is Worth it?  The report was requested by Congress to evaluate the success and failures of various programs and to provide recommendation for improving the cost-benefit assessment, evaluation and portfolio management of Department of Energy (DOE) research and development (R&D) programs in the areas of energy efficiency and fossil fuels. The report examines 17 energy-efficiency R&D programs and 22 fossil fuel technology programs from 1978 through 1999.  The evaluation process focused on reviewing the project based on the R&D objectives set forth for the research.  (7/31/01)

On July 18th, the House Science Committee passed a comprehensive energy bill (H.R. 2460) introduced by Chairman Sherwood Boehlert (R-NY).  The bill authorizes the appropriation of close to $18.5 billion over the next 8 year period to DOE, the Environmental Protection Agency (EPA), and the Office of Science and Technology Policy (OSTP) in the Executive Office of the President.  It would increase funding for conservation and renewable energy programs, fund the administration's 10-year $2 billion clean coal initiative, and fund a new research program on oil and gas drilling in ultra-deep waters. More information can be found in a press release outlining the bill at the Science Committee's website. (8/1/01)

On August 1st, the House passed H.R. 4, the GOP's comprehensive energy bill, in a floor vote of 240-189.  Originally introduced by W.J. "Billy" Tauzin (R-LA), the bill has many of the same provisions as the president's national energy policy, including a provision to allow exploration in the Arctic National Wildlife Reserve (ANWR).  Despite the fact that opening ANWR was central to Bush's plan, the H.R. 4 differs from what Bush had envisioned due to an amendment introduced by Reps. John Sununu (R-NH) and Heather Wilson (R-NM).  Their amendment, which passed by a 228-201 vote, limits exploration activity to 2,000 of the 1.5 million acres of the coastal plain in the refuge.  For more information on H.R. 4, see the major energy legislation summary below.

A preliminary analysis executed by ExxonMobil, BP, and Phillips Petroleum indicated that building a natural gas pipeline from Alaska to the lower 48 states would not be financially feasible for the companies.  Robbie Schilhab of ExxonMobil and John Marushack of Phillips Petroleum referred to the project as "a long shot" upon presenting the news at a recent task force meeting.  Projected construction costs are $15.1 billion for a pipeline running north through the Arctic Ocean to Canada's Mackenzie River Delta, or $17.2 billion if it runs south along the Alaska Highway.  Either way, the costs are too high to allow pipeline profits to yield the desired 15 percent return on investment.  Ken Thompson, a former oil executive with a seat on the governor's natural gas team, said that tax incentives, a lower return on investment, and a higher value for liquid natural gas from the pipe would make the project a worthwhile investment.  Federal legislation to expedite the permitting process would also be welcomed by the companies involved.  (9/28/01)

Congressional hearings in October 2001 addressed two important issues in the Senate and the House.  The Senate Energy and Natural Resources Committee held a hearing on the Alaska natural gas pipeline issue.  The House Subcommittee on Energy and Mineral Resources held a hearing on H.R. 2952, the Powder River Basin Resource Development Act, which would establish a process for resolving disputes between developers of coal and developers of coal bed methane in the Wyoming portion of the Powder River Basin.

President Bush urged the Senate to pass an energy bill that would allow drilling in the Arctic National Wildlife Refuge (ANWR), referring to the issue as a matter of national security because it would reduce the nation's reliance on foreign oil.  Bush's effort to revive this issue followed an October 9th decision by Majority Leader Tom Daschle (D-SD) to invoke a seldom-used Senate Rule under which Energy and Natural Resources Committee Chairman Jeff Bingaman (D-NM) will offer a proposed energy bill on the Senate floor without his committee voting on it.  This rule gives Daschle power to bypass committees and shape the bill more directly.  The Democrats' energy bill is expected to be brought to the floor before Congress adjourns next month and is not expected to authorize drilling in ANWR. According to the October 10 Greensheets, Bingaman said that the decision was made to suspend discussion of the bill in order to "avoid quarrelsome, divisive votes in committee ... and avoid those contentious issues that divide, rather than unite us."  Republicans and Democrats are currently negotiating whether ANWR will be subject to a straight up-or-down vote or whether it will be subject to filibuster, thus requiring 60 votes for passage.  (10/12/01)

On October 18th, Sens. Harry Reid (D-NV) and Gordon Smith (R-OR) introduced the Renewable Energy Incentives Act, S. 1566, that would allow public utilities to trade tax credits from energy they produce using renewable energy sources from wind, sun, small hydropower, geothermal, or animal waste.  The bill is designed to make these renewable energy companies competitive with traditional energy companies.  According to Reid, S. 1556 "encourages the use of renewable energy and signals America's long-term commitment to clean energy, a healthy environment, and energy independence."  He hopes that this legislation will result in more renewable energy plants in Nevada and other places with available resources.  It is expected that the bill will be included in the Senate Democrat's energy package.  However, if that measure gets stalled, Reid said he will push the renewable energy bill on its own.  (10/26/01)

Anthrax scares on Capitol Hill closed the Senate and House office buildings, postponed congressional hearings, and slowed most legislation.  As a result, the Senate did not have time to vote on a comprehensive energy bill before Congress adjourns.  Nevertheless, Senate Energy Committee Chairman Jeff Bingaman (D-NM) still hopes to finalize a bill soon after the committee offices reopen and present it to Senate Majority Leader Tom Daschle (D-SD), who will decide whether or not to schedule the bill for a Senate floor vote.  Bingaman's bill is expected to include tax incentives and credits in the range of $15 billion to $20 billion and an ethanol incentive package, but no language to open the ANWR to drilling.  Whereas a counter energy bill entitled the Homeland Security Act (S. 388) by Sen. Frank Murkowski (R-AK) and other Senate Republicans is expected to allow access to ANWR and include an energy security measure sought by the Bush Administration for federal dams and public lands.  Republicans claim to have a simple majority in the Senate to pass their bill in a straight up-or-down vote, but Daschle told them they have to get 60 votes to override a filibuster threatened by Democratic ANWR opposers.   According to an October 26th Greensheets Express, Murkowski promised that Republicans "will consider every avenue available" to ensure a vote on energy legislation before Congress adjourns.  (10/26/01)

Background
The autumn of 1999 saw prices of oil and energy fall drastically and a flurry of bills were proposed to curb economic effects of the low prices, but the times have changed.  A gasoline price spike, rising home heating costs, and the California electricity crisis turned the tide in the fall of 2000.  During his Presidential campaign, then-Governor Bush stated that he would promote increasing domestic oil production to bring energy prices down, specifically calling for opening the Arctic National Wildlife Refuge (ANWR).  He has not backed down from this position and, along with many GOP leaders in Congress, has promoted the idea that the U.S. is far too dependent on foreign oil. They would like to pass a comprehensive national energy policy whose cornerstone will be the increased production of domestic oil. Many disagree with this tactic saying that using alternative energy sources and conservation would help solve energy difficulties.

Senate bill S.2557 introduced on May 16, 2000, sponsored by Sen. Frank Murkowski (R-AK) laid out a general national energy policy for the country.  The bill outlines a plan to reduce the nation's dependency on foreign oil to fifty percent by 2010 through several measures including opening the ANWR to petroleum exploration, encouraging more research and development of natural gas, and improving the oil and gas leasing program on federal lands.  More information on S.2557 can be found on the AGI website Congressional Energy Policy: Response to Rising Oil Prices.  The AGI webpage has more related action from the 106th Congress.

Part of the energy debate this Congress will focus on outer continental shelf (OCS) lands.  The OCS Deep Water Royalty Relief Act (Title III of P.L.104-58), provides royalty relief to those leasing lands on the OCS under certain circumstances.  The act amends Section 8(a) of the Outer Continental Shelf Lands Act (43 U.S.C.1337(a)(3)).  It was originally intended to provide aid to domestic oil producers while oil prices were low in 1999.  Now the case for royalty relief lies in the encouragement of domestic oil production to reduce the U.S. reliance on foreign oil.  It is expected that the royalty relief statute will be debated this Congress, considering the current high oil prices and the bipartisan support behind the Conservation and Reinvestment Act (CARA; H.R. 701), which uses royalty profits to fund conservation programs.  More information on CARA can be found on the AGI website Update on Outer Continental Shelf Royalties. The details and history of the OCS Deep Water Royalty Relief Act can be found on the AGI website Legislative History and Digest of S. 395 , as well as Update on S. 395: Alaskan Oil Export/Deep-Water Royalty Relief Legislation.  Information on other OCS royalty debates in the 106th Congress can be found on the AGI website Update on Outer Continental Shelf Royalties.



Comprehensive Energy Legislation

Two very different comprehensive energy bills dominate energy policy debate in the 107th Congress.  H.R. 4, commonly called the SAFE (Securing America's Future Energy) Act of 2001, was passed by the House on August 2, 2001.  This Republican-favored legislation, which includes a provision to open the Arctic National Wildlife Refuge (ANWR) to drilling, has been at the root of partisan contentions and has inspired some very creative political maneuvering.  Senate Democrats unveiled their anxiously awaited energy legislation, S. 1766, on December 5, 2001.  S. 1766, entitled the Energy Policy Act, offers alternative ways to boost domestic energy production without disturbing ANWR.

H.R. 4: The SAFE Act of 2001
H.R. 4 was originally introduced by Rep. Billy Tauzin (R-LA) on July 7th, and subsequently passed by the House on August 2nd with many amendments.  H.R. 4 is based largely on the Bush Administration's energy plan, including a provision allowing exploration activity in ANWR.  However, an amendment proposed by Rep. John Sununu (R-NH) limits exploration to 2000 of a possible 1.5 million acres in the refuge.  Another provision provides royalty relief to oil companies for drilling in deep waters of the Gulf of Mexico.  Specifically, it would provide $3 per barrel tax credit for low-volume or stripper wells when oil prices are below $15 per barrel.  The House bill also offers tax credits equal to 50 percent of the incremental cost of an alternative fuel vehicle, and a business tax credit of 25 cents per gallon for alternative fuel sold at retail.  Oil refiners would be allowed to expense capitol costs and credits for making low sulfur diesel fuel.  Consumers who buy solar water heaters, fuel cell vehicles, or energy efficiency improvements to their homes would get tax credits also.  Overall, this bill would provide $33 million in energy tax breaks over a 10 year period.

The House energy package does not address electricity deregulation issues, but does provide heating aid for low-income families by boosting annual Low Income Assistance and State Energy Program grants to $3 billion, and expanding funding for weatherization programs.  The bill calls for a $2 billion, 10 year program to encourage cleaner coal technology and orders a National Academy of Sciences (NAS) study on how to improve domestic energy supplies.  It also calls for studies by the Environmental Protection Agency (EPA) and the Department of Energy (DOE) on boutique fuel requirements to reduce smog in urban areas.  Another key provision would reduce gasoline use by sports utility vehicles and minivans by 5 billion gallons between 2004 and 2010.  The amount of gasoline saved would roughly equal a two week supply of fuel at the nation's current consumption rates.

S. 1766: Energy Policy Act of 2002
This bill was introduced in the first week of December, making it clear that the bill is a work in progress that will not be finished until Congress reconvenes in January.  It is largely based on S. 597, an earlier version of the Democratic energy policy that was introduced in March 2001.  S. 1766 differs from the House-passed legislation on many key issues, the most important difference being that it continues the ban on drilling in ANWR, opting instead to increase domestic production by hiring more Interior Department staff to reduce the backlog of requests to drill on public lands already available. Tax breaks and incentives in the amount of $10 billion to $15 billion are provided by S. 1766 to encourage energy production and energy efficiency.  An example of this is the provision that would increase domestic natural gas production by providing loan guarantees good for six months after passage of the bill to build a natural gas pipeline from the North Slope of Alaska.  The legislation would streamline pipeline certification and dam re-liscensing, and increase funds to speed permitting for domestic oil and gas production projects, including drilling in the National Petroleum Reserve in Alaska and assisting Native American tribes to unlock energy potential on their lands.  It would also extend permanent authority to fill and operate the Strategic Petroleum Reserve (SPR).

New climate change policies are proposed in S. 1766, including a provision (Title XIII) that would create a National Climate Service (NCS) within the Department of Commerce (DOC), presumably as a division within the National Oceanic and Atmospheric Administration (NOAA).  S. 1766 proposes to appropriate $150 million for FY 2003, $175 million for FY 2004, $200 million for FY 2005 and $230 million for FY 2006.  It is not clear how this new entity would relate to the many existing federal programs in NOAA and other agencies under the umbrella of the U.S. Global Change Research Program.  The NCS would be responsible for forecasts and warnings on future climate changes in addition to atmospheric monitoring.  The bill would establish an Atmospheric Monitoring and Verification Program within the NCS to coordinate data collection and interpretation activities carried out by various entities of the Commerce Department (both NOAA and NIST) and other federal agencies.  Climate change vulnerability and preparedness assessments would be the responsibility of the White House Office of Science and Technology Policy and the National Office of Climate Change Response.  This vulnerability and preparedness aspect of the bill would be closely related to federal, state, and local agencies -- such as the Federal Emergency Management Agency, the Environmental Protection Agency, the Army Corp of Engineers, and the Department of Transportation.  The bill also assigns the investigation on the effects of “human-induced climate changing on economic social systems” and the effects of energy production on the global climate to DOE's Global Change Scientific Research program.

The Democratic energy package includes many provisions geared toward renewable energy resources and alternative fuel production.  It mandates 5 billion gallons of alternative fuels such as ethanol and biodiesel to be used in vehicles by 2012, and provides incentives to triple the amount of electricity produced by non-hydroelectric renewable sources by 2020. It calls for a phase-out of methyl tertiary butyl ether (MTBE), a popular gasoline additive, over a four year period.  The bill would also invest in research and development of clean coal technology, fuel cells, nuclear, and renewable energy sources.

Energy efficiency is another major theme in this legislation.  The bill includes language requiring higher fuel economy for federal fleets and the use of alternative fuels.  As introduced, the bill includes a "placeholder" for increasing corporate average fuel economy (CAFE) standards.  Specific numbers will be recommended by the Senate Commerce Committee and be included in the final version.  The bill would enact a higher seasonal energy efficiency rating (SEER) of 13 for heat pumps and central air conditioning units, and mandate adherence to the rules that protect the reliability of the interstate electric grid.  S. 1766 would increase federal investment in research development on energy efficiency to over $1 trillion by 2006, and encourage a 25 percent increase in industrial energy efficiency over 10 years.


Sources:  E&E Publishing, Greenwire, Library of Congress Thomas web site, The New York Times, hearing notes and printed testimony, The Washington Post.

Please send any comments or requests for information to the AGI Government Affairs Program at govt@agiweb.org.

Contributed by Summer 2001 AGI/AIPG interns Michelle Williams and Caetie Ofiesh; Spring Semester 2001 AGI/AAPG intern Mary Patterson; Margaret A. Baker and David Applegate, AGI Government Affairs Program; Fall Semester 2001 AGI/AAPG intern Catherine Macris; Spring Semester 2002 AGI/AAPG intern Heather R. Golding; and Summer 2002 AGI/AIPG intern David Viator.

Posted February 18, 2001; Last updated November 19, 2002


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