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White House, Congress may find rare agreement on energy bill |
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By Jim Snyder
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Posted: 10/16/07 06:53 PM [ET] |
At odds on Iraq, children’s health insurance and eight of 12 spending measures, the Bush administration and Democratic Congress may find common ground on an unlikely topic: energy legislation.
The kind of broad energy bills that lawmakers are contemplating this year are notoriously tough to pass because the measures touch a variety of interests, from farmers to carmakers to electric utilities.
The White House has identified several areas of concern with versions passed by the House and Senate, and groups with powerful Capitol Hill allies like oil and auto lobbies are working to kill or alter portions of the bill.
Still, lobbyists said energy legislation might present the rare instance in which the administration and Democratic Congress each find something beneficial in passage. The various components of the bill also provide plenty of opportunity for compromise.
For the White House, an energy bill presents what will likely be one of a few remaining opportunities to add to the president’s domestic policy legacy, with more sweeping measures like Social Security reform long off the table.
“The administration would like a couple of domestic policy wins at this point,” said Martin Edwards, a lobbyist at the Interstate Natural Gas Association of America. “And this is an achievable win.”
For a president raised in the Oil Patch, the victory may come with an ironic twist. One of the signature measures the bill could include is a new federal mandate on production of renewable fuels, despite opposition from oil interests.
President Bush already moved away from the industry in his last State of the Union address, when he called for the production of 35 billion gallons of alternative fuels in the next 15 years.
In the pending Senate version, the renewable fuel standard would not include a process by which coal is converted to gasoline, a technology the administration supported.
But the White House is viewed on K Street as generally supportive of a new renewable fuel mandate, although it may press Congress to make more allowances for technological advances necessary to meet the 36 billion gallon target set in the Senate bill.
On this, as on other issues, a broader hurdle for Democratic supporters may come from within their own caucus.
The House bill does not include a renewable fuel standard. Worried that using more corn to make ethanol would drive up food prices, anti-hunger groups have reached out to Speaker Nancy Pelosi (D-Calif.) in an effort to kill the mandate.
Other groups are aligned against the bill as well. Farmers and ranchers who rely on grain to raise livestock also worry about rising corn prices. Environmentalists fear that the new mandate would lead to a loss of habitat as more corn is planted to meet the new mandate.
The Senate bill requires that 15 billion gallons of the total renewable production target come from corn-based ethanol. But some lobbyists believe a final bill may cap corn-based ethanol at most at 12 billion gallons, given fuel-versus-food concerns.
The House embraced a renewable mandate of another sort: a requirement that electric utilities produce more of their power from wind, solar, geothermal and other renewable sources. An effort in the Senate to pass a similar mandate failed.
The Edison Electric Institute opposes the language and is lobbying the administration to include opposition to the Renewable Portfolio Standard (RPS) in its statement of administration policy, or SAP.
Democrats will also have to work out differences among themselves on how aggressively to raise fuel efficiency standards for cars and trucks, a significant obstacle. The Senate bill would raise the standard, but House Energy and Commerce Committee Chairman John Dingell (D-Mich.) favors a more modest fuel efficiency target, known as Corporate Average Fuel Economy (CAFE).
The administration’s policy letter is expected to include opposition to language that would allow antitrust lawsuits to be filed against OPEC-member nations and define “price-gouging” at the pump as a federal crime.
The oil lobby opposes the measures. Lobbyists predicted Democrats would likely leave them out of a bill if it meant passing a measure that raised fuel efficiency standards on cars for the first time in two decades and required more renewable fuels production.
The absence of any boost in domestic production is also expected to be a bone of contention with the White House and Congress. To win the president’s signature, House Democrats likely will have to scuttle a controversial section in the House bill, written by the Natural Resources Committee, that oil and gas lobbyists argue would curtail natural gas production in the West.
The administration is also likely to push Congress to minimize the tax hit that oil and gas producers take in an energy bill. Democrats want the revenues to support renewable fuel development.
“It’s like a Turkish bazaar,” said one utility lobbyist. “You can negotiate a number on CAFE. You can negotiate a number on RPS.”
In the end, the lobbyist added, Democrats will have to decide “whether they want a bill or a veto.”
A bill may add to the president’s legacy, but it would also add to the new majority’s own list of accomplishments. A veto, on the other hand, like the children’s health insurance bill, would give Democrats an example to take into 2008 of how their priorities differ from the president’s.
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