Election returns leave industry hopeful for long-awaited energy bill

When it comes to campaign contributions, energy companies are steady producers for Republicans.

The oil and gas sector pumped $14.4 million into GOP coffers during the 2004 election cycle. Electric utilities added $8 million.
When it comes to campaign contributions, energy companies are steady producers for Republicans.

The oil and gas sector pumped $14.4 million into GOP coffers during the 2004 election cycle. Electric utilities added $8 million.
file photo
Energy and Commerce Chairman Rep. Joe Barton

Democrats got money, too, but much less: $9.5 million, or about 25 percent of the $39 million that energy and natural-resources companies gave candidates for the 2004 election, according to the Center for Responsive Politics.

The reason for the disparity is simple: Republicans tend to favor the type of pro-production, anti-regulation policies these companies crave.

Now that their favored party won big last Tuesday — Republicans picked up four
more seats, to increase their number to 55 in the Senate — many in the industry hope to collect a return in the form of national energy legislation.

A massive corporate tax bill passed before recess has provided some tax help to these companies, including tax credits for electricity produced from wind and a general manufacturing rate cut for producers of electricity.

But there are still a number of goodies that the massive energy bill that stalled a year ago in the Senate would offer, and some in the industry are optimistic about last Tuesday’s returns.

“In general, the election helped increase the potential for doing a comprehensive energy bill in the next Congress,” said Lee Fuller, the chief lobbyist for the Independent Petroleum Association of America (IPAA).

“I think it’s all positive for an energy bill,” a utility lobbyist said.

Electric utilities want freedom from the Public Utility Holding Company Act, or PUHCA, a law intended to keep utility eyes on the ball by limiting the types of businesses they can invest in. Consumer-protection groups favor a pumped-up PUHCA, but utilities say it restricts investment in a creaky power grid.

Nuclear-power advocates want a production tax credit to help pay for the construction of the first new plants in two decades.

Producers of corn-based ethanol won a helpful tax change already in the corporate tax bill, but they still want to double the federal mandate for ethanol production.

Oil and gas producers, meanwhile, want access to more areas for drilling, such as the Arctic National Wildlife Refuge, and a speedier permitting process to get at reserves in the Lower 48.

Lobbyists predict that lawmakers will focus next year on ways to encourage more natural-gas production to try to lower prices.

Fuller said Congress should open more areas for drilling, including environmentally sensitive spots in the eastern Gulf of Mexico. The IPAA also wants to restrict the number of legal challenges producers have to face before being able to drill, although it isn’t clear what the legislative relief would be.

“There are substantial off-shore resources that aren’t being used now,” Fuller said.

“We’re going to try to do everything we can to identify natural-gas issues that we need to deal with,” he added.

The current energy bill does little to encourage more gas production or ease the process of construction of what many consider the next big thing in energy: liquefied natural-gas plants that bring supercooled imported gas to market.

But while pro-energy-production Republicans solidified their hold on Congress and a former oilman was sent back to the White House, lobbyists say winning a long-sought national energy policy is hardly a slam-dunk.

Crafting energy legislation is “hard work,” said Charlie Drevna, the director of advocacy for the National Petrochemical and Refiners Association (NPRA). “Large, comprehensive energy bills aren’t easily passed.”

The NPRA wants limited liability protection for producers of the gasoline additive methyl tertiary butyl ether (MTBE) — an issue that held up the bill. Some communities where MTBE was used face massive cleanup bills because the additive leaked and polluted water supplies, but refiners argue that liability lawsuits should be limited to instances of negligence.

Chances of passage seem to be enhanced by the growing GOP majority in the Senate, where a comprehensive bill came up just two votes short of passing.

A cloture vote, which would have ended debate on the measure, failed 57-40 a year ago, although Senate Majority Leader Bill Frist (R-Tenn.) switched his vote to no in a procedural maneuver that allowed him to bring the measure up again. Sixty votes are needed to end debate.

Republicans who likely support the energy plan picked up three seats. Sens.-elect Richard Burr of North Carolina, Mel Martinez of Florida and Jim DeMint of South Carolina replace Democrats who either didn’t vote for cloture on the energy bill last November or voted no.

But lobbyists are used to staying up half the night monitoring committee markups and listening to bold predictions that this is the year Congress gets it done — only to watch an energy bill run out of steam.

Though energy companies clearly favor one party over another, regional concerns are as important as political concerns when it comes to crafting broad energy policies.

“Every region has its own energy issue,” said Marchant Wentworth, a lobbyist at the Union of Concerned Scientists, which favors pro-environment policies.

Expanding access in the Gulf of Mexico or efforts to encourage drilling in the Intermountain West, another area gas companies have their eyes on, could bring opposition from both parties.

“Politically, it’s not going to go anywhere,” John Northington, a Democratic energy lobbyist with Thomas Advisors said of any move to drill off the Florida coast. “Florida Republicans are just as against it as Florida Democrats.”

The difficulty in navigating all the political hotspots leaves some lobbyists thinking Congress will pass on trying to push through a wide-ranging bill again, after failing in the past three years.

Another problem: The bill now stalled could be too expensive in a climate where some want to get serious about the deficit.

“There’s just not much appetite for a comprehensive bill,” one Republican lobbyist said.

This lobbyist said it is more likely that separate measures that encourage more production of natural gas and adopt tougher electric reliability standards would pass, rather than a massive, catchall bill.

A spokesperson for Rep. Joe Barton (R-Texas) said the Energy and Commerce Committee chairman still holds out hope for H.R. 6, the current energy bill the House has already passed twice. He wants to add it to an omnibus spending measure or some other vehicle during the lame-duck session.

“We’re focused on this session,” the spokesperson said.

Barton and his staff have indicated that the priority next year will be on major telecommunications-law reforms and a reauthorization of the Clean Air Act. But some lobbyists expect Barton will eventually return to energy legislation if his lame-duck efforts are unsuccessful, which most agree they will be.

Barton’s Senate counterpart, Energy and Natural Resources Chairman Pete Domenici (R-N.M.), favors a comprehensive bill next year, said spokesman Marnie Funk.

With coal, natural-gas and oil prices all high, a comprehensive bill that addresses each one “makes sense,” Funk said.

Funk said the committee will likely work from S. 2095, a compromise
comprehensive bill that Domenici offered this year to break the logjam. That bill has less directed spending than H.R. 6, and at $14 billion is about half as expensive.