The 2005 Energy Bill

Overview:

8 August 2005
Congress vacations during the month of August, and the looming holiday moved both chambers to work double-time in July. One result: passage of the Energy Bill (HR 6) . Illustrating that Congress can move quickly when it wants to (whether that is good or bad is debatable) , the House of Representatives moved the bill to Committee on the last Monday in July and the House Energy and Commerce Committee released the 1700+ page conference report two days later.

Voting Record:

The original bill passed the Senate on an 85-12 vote; it passed the House 249-183. Conference votes: House (28 July - 275-156 - roll call vote) ; Senate (29 July - 74-26 - roll call vote) .

Budget Impact:

According to the Congressional Budget Office (in a letter dated 27 July - prior to House and Senate votes) , the 2005 energy bill will increase direct federal spending by $2.2 billion from fiscal 2006 through 2010 and will reduce federal revenues by $7.9 billion from fiscal 2005 through 2010.

Oil Emphasis:

The Energy Bill pours about $9 billion into the oil and gas sector in tax credits and incentives. The industry, which is rolling in dough due to record high gasoline prices, "invested" more than $360 million lobbying Congress over the past two years. Chevron (the second largest US-based oil company) benefits because of a mandated delay in government review of a competing (Chinese) offer to buy California-based Unocol.

Ethanol Benefits:

The bill also doubles required ethanol additive use; Archer Daniels Midland Co. is the nation's largest producer of ethanol and contributed $102,175 to candidates in the 2004 elections.

Controversy:

The bill's tortured history includes challenges from NGOs and Congress -- rebuffed by federal court -- to discover details of closed-door meetings between Vice President Cheney and oil executives in 2001. In February 2003, GAO Comptroller David Walker said:

Despite GAO's conviction that the district court's decision was incorrect, further pursuit of the [energy task force] information would require investment of significant time and resources over several years...

US Oil Consumption:

The US currently consumes about 20 million barrels of oil a day (7.3 billion barrels a year) ; only 8 million barrels are produced domestically each day. A 1998 USGS estimate suggests that the ANWR 1002 area could technically produce a total of 4.3 - 11.8 billion barrels of oil (95 percent probability) .

Bush Promise:

By signing the bill on 8 August 2005, President Bush partially fulfilled a 2000 election promise; conspicuous by its absence, the bill fails to address promised but controversial drilling in Alaska's Arctic National Wildlife Refuge (ANWR).

Summary:

The joint Senate-House energy bill conference committee developed an energy bill (Energy Policy Act of 2005, HR 6) estimated to cost $11.5 billion. The bill includes $1.5 billion in subsidies for oil and gas companies and contains $3.1 billion in incentives for alternative energy and $1.3 billion for conservation. One of the conservation measures extends daylight savings time; in 2007, DST would begin the second Sunday in March and end the first Sunday in November.

The bill does not address drilling for oil in the Alaska National Wildlife Refuge; global warming; and automotive mileage standards. It repeals the Depression-era Public Utility Holding Company Act, which limits mergers between utilities. It no longer offers immunity to producers of MTBE -- a gasoline additive that has reportedly contaminated groundwater.