ENERGY 2005

Bill Signing

MTBE Deal Proposed

Joe Barton (R-TX), Chairman of the House Energy & Commerce Committee and Representative Charles Bass (R-NH) have proposed to resolve the  methyl tertiary butyl ether (MTBE) problem by creating an $11.4 billion fund to clean up drinking water contaminated by the gasoline additive.  The proposal is a compromise between the House bill, which exempts MTBE manufacturers from defective product lawsuits, and the Senate version, which does not.  This provision was excluded from the final energy bill (See below).

MTBE Deal Rejected Sunday, July 23, 2005 - - Energy bill conference committee negotiators removed a proposal to give makers of the gasoline additive MTBE liability protection against environmental lawsuits. That decision neutralized the issue that had caused the failure of an energy bill two years ago. The industry faces scores of MTBE lawsuits arising from contamination of water supplies by the additive in at least 36 states.  A number of senators were prepared to filibuster any bill with such protection for the industry, and liability protection supporters probably did not have the 60 votes needed to end debate. Communities and water agencies say they face billion-dollar cleanups because MTBE, a gasoline additive introduced in the mid-1990s to reduce air pollution, polluted drinking water. More than 150 lawsuits have been filed to get MTBE makers pay for cleanup.

The plan would require the oil industry to pay about a third of the amount in the fund, with the rest coming from the federal government and state governments.  Barton's plan calls for $11.4 billion in funding over 12 years for cleanup and other compensation. The industry cost would be about $4 billion; the federal government would pay more than $4 billion and the cost to states would be nearly $3 billion.

Opponents of legal protection believe the plan is a giveaway to the oil industry and puts most of the burden of clean on taxpayers.  The oil industry believes the fund is too large and opposes it too.  Analysts can only guess at cleanup estimates.

MTBE has been widely used in gasoline to help reduce air pollution. But the additive has leaked from underground tanks, causing water pollution.  Proponents believe there should be legal protection for manufacturers because the government required that additives be used.

Bush Energy Plan 2005

President Bush called for the use of new technology to help secure domestic and global energy supplies. President Bush listed five initiatives to accelerate American energy security::

1. Call on federal agencies to work with states and communities to encourage construction of oil refineries on closed military bases. No specific sites have been identified.
2. Expand an existing White House proposal to provide a $2.5-billion tax credit for purchases of hybrid and fuel-cell vehicles by including cars and trucks that burn "clean diesel" fuel, which is more efficient than gasoline.
3. Encourage construction of nuclear power plants by reducing uncertainty in the licensing process and providing federal risk insurance to mitigate the cost of unforeseen delays. No new nuclear plants have been commissioned since 1973.
4. Increase federal authority over the location of onshore liquefied natural gas terminals. Four LNG terminals are now operating. Energy companies have proposed building 32 more if government approval can be obtained. The LNG proposal would "clarify" the authority of the Federal Energy Regulatory Commission to approve the placement of onshore terminals that accept tanker shipments of highly compressed gas and convert it to conventional natural gas for distribution to domestic markets.
5. Press other countries to participate in international efforts to promote more efficient and less polluting energy use, including clean coal and nuclear power generation.

President Bush's promotion of a mix of energy sources should be approved by Congress. It would be good if the nation could switch the percentages on coal and nuclear to 20 and 50 percent respectively. We need secure supplies of nuclear power, wind power, oil refineries, liquified natural gas, hydrogen, ethanol, and clean coal.

Congress Approves Budget Resolution With ANWR Drilling

The U.S. Congress approved a $2.57 trillion budget resolution, H. Con. Res. 95, on April 28, 2005 that allows oil drilling on the coastal plain of the Arctic National Wildlife Refuge (ANWR). The budget resolution only requires a majority vote and the ANWR provision was included to avoid a Senate filibuster.

The resolution is a nonbinding plan that establishes federal spending for fiscal 2006, revises the budget for fiscal year 2005, and sets forth appropriate budgetary levels for fiscal years 2007 through 2010.

The measure passed the House of Representatives in a 214-211 vote at the Senate in a 52-47 vote.