Congress Passes Wide-Ranging Energy Package

Senate and House must reconcile bills that will affect almost all aspects of American life

THE United States, after years of debate, is moving toward its most sweeping overhaul of energy policy in two decades.

If President Bush approves, a massive energy bill could be signed into law before the November elections.

The measure now working its way through Congress would touch the lives of virtually every American, and could bring important changes in the oil, gas, nuclear, and alternative-energy industries.

The House of Representatives has approved its 1,500-page version of an energy package on Wednesday evening. Earlier, the Senate had passed a 600-page bill, which now must be reconciled with the House measure.

Environmentalists were pleased with some aspects of the House bill, but they complained bitterly about provisions that would make it easier to construct nuclear power plants in the US.

Supporters of the oil industry, on the other hand, were generally chagrined. Like the Senate, the House refused to allow oil exploration in Alaska's Arctic National Wildlife Refuge, where geologists say billions of barrels of oil may lie below the frozen ground.

Oilmen were also upset at the House decision to put a 10-year moratorium on drilling on the Outer Continental Shelf along the Atlantic Coast, around Florida, along the coast of California, and in Alaska's Bristol Bay.

Joe Lastelic, a spokesman for the American Petroleum Institute, complains that under the House action, "we are the only nation in the entire world that is shutting off its Outer Continental Shelf." The API claims the ban will cost the US up to 700,000 jobs because of lost oil production and the need to purchase additional petroleum abroad.

The biggest winner in the House bill could be the moribund nuclear power industry. The measure, supported by the White House, allows one-step licensing of new nuclear power plants for both construction and operation.

Energy Secretary James Watkins said after the House vote that the bill "offers the real possibility of enacting comprehensive and balanced energy legislation such as the country has not seen in 20 years."

Mary Marra, an official with the National Wildlife Federation, praised the bill for encouraging energy efficiency and providing incentives for alternative fuels.

Yet all sides could point to their losses.

Environmentalists were frustrated in their efforts to boost auto efficiency from the current requirement of 27.5 miles per gallon to a new standard of 40 miles per gallon. Congress worried that such a big step would hurt the US auto industry.

The administration, like the oil industry, is concerned that not enough will be done to bolster America's sagging petroleum output.

Production this year is running at 7.3 million barrels a day, down from 7.5 million barrels a day during the same period a year ago. Only 623 rigs were drilling for oil or gas in March of this year, the lowest number since records were kept.

Meanwhile, oil-industry officials estimate they could retrieve up to 3.5 billion barrels off the coast of southwest Florida, another 10 billion off California, and untold billions from Alaska - if they received permission to drill.

On balance, however, both Republicans and Democrats seemed satisfied with the House bill, with members from both parties supporting it overwhelmingly in the final vote, 381 to 37. Among the House bill's other major provisions:

* Tax breaks for renewable energy sources, including wind, solar, and biomass.

* New efficiency standards for appliances, lighting, and fixtures in the private sector, and new requirements for efficiency in federal buildings.

* Requirements for federal and private fleets to buy more vehicles powered by alternative fuels, such as electricity and natural gas.

* Removal of barriers to natural-gas pipeline construction.

* Restructuring the electric-power industry to boost competition between companies in the production of electricity.

* New incentives to encourage employers to pay, tax free, up to $60 a month to workers to ride mass transit, while capping tax-free parking benefits at $160 a month.

Prior to the House vote, Rep. Lamar Smith (R) of Texas, who represents the largest oil-producing district in the lower 48 states, said the bill could be described as "the good, the bad, and the ugly."

The "good" is the $1 billion in tax relief for independent oil producers to put people back to work, he said.

The "bad" was a provision - later defeated - to make the oil industry pay for filling the final 430 million barrels in the Strategic Petroleum Reserve to protect against future oil cutoffs.

The "ugly" was an amendment that was approved to prohibit states from setting production limits on natural gas to bolster prices. Mr. Smith argued that Texas had used such powers for 60 years.

Analysts say that with Congress and the White House under fire for failure to solve national problems, the outlook for the energy bill seems favorable.

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