Four years ago, in his National Energy Policy, Vice President Dick Cheney recommended building 1,300 to 1,900 new power plants, 38,000 miles of new gas pipelines, and 255,000 miles of transmission lines. Then last month, in a speech before the National Small Business Association, President Bush added a few more energy priorities to that list. He’d like to build new nuclear power plants and change existing laws to "reduce uncertainty" in the nuclear licensing process. Bush also proposed constructing the nation’s first new oil refineries since 1976 — suggesting they be built on military bases slated for closure — as well as simplifying the U.S. Environmental Protection Agency’s rules for permitting refineries. In his budget request to Congress, he asked for $6.7 billion in tax breaks for the energy industry.
All of this, however, is small potatoes compared with what Congress is proposing.
In mid-April, the U.S. House of Representatives passed its energy bill, which included $8 billion in subsidies for the energy industry. Although the Senate isn’t expected to vote on its version until the end of May, it has passed its 2006 budget, which includes $11 billion in energy subsidies.
The House has passed some version of the energy bill five times in the last four years, but the Senate has repeatedly rejected it. With some of the tax breaks already out of the way, however, the bill may have a shot at passing this year. Sen. Pete Domenici, R-N.M., chair of the energy and natural resources committee, has praised the spending bill, and vowed to use the money to craft an energy package that would maximize both energy conservation and energy production.
Meanwhile, the president is urging Congress to set the energy bill on his desk by August. And Westerners are bracing for the immediate and sweeping impacts the legislation would have on their region.
Longer days for the public — and sunnier days for industry
When the House passed the energy bill by a vote of 249 to 183, it approved everything from extending Daylight Savings Time by two months every year to creating a pilot program for making ethanol from sugarcane. And although environmentalists are indignant over provisions in both the House energy bill and the Senate budget that would open Alaska’s Arctic National Wildlife Refuge to energy development, that’s just the tip of the iceberg.
As passed, the House bill would exempt refinery owners such as BP, ChevronTexaco, ExxonMobil and ConocoPhillips from liability for contaminating groundwater with MTBE, a cancer-causing gasoline additive that has polluted more than 3,000 underground water sources in California alone.
The House bill would also block the EPA from regulating hydraulic fracturing or "frac’ing" — the process by which energy companies inject chemicals such as diesel fuel, benzene and formaldehyde into coal seams to boost oil and gas production. Frac’ing, which was pioneered by Halliburton in the 1940s, is a growing practice across the West, particularly in New Mexico’s San Juan Basin, Wyoming’s Powder River Basin and northwestern Colorado. Under pressure from Dick Cheney’s Energy Task Force — and over the objections of its own scientists — the EPA has backed off its earlier efforts to regulate the practice, despite evidence that frac’ing has contaminated underground drinking water sources (HCN, 12/20/04: Conscientious Objectors).
The House bill also outlines how the U.S. departments of the Interior and Agriculture should handle applications for oil and gas leases, permits and surface-use plans. Under current regulations, federal managers can approve or reject applications. Under the changes, however, federal managers would have 30 days to either approve or defer an application. If they defer, they would be required to tell the company how to change its application to ensure it is approved the next time; the company would then have two years to revamp its proposal.
The bill would also require the federal government to compensate oil and gas companies for the cost of complying with the National Environmental Policy Act, and reduce or suspend the royalties corporations pay into the U.S. Treasury when they drill on public land or in offshore waters. Combined, these provisions represent millions more in federal subsidies.
The bill would also boost the nuclear industry by subsidizing nuclear power at 1.8 cents per kilowatt hour, and authorizing $30 million for the research and development of new uranium mining technologies. It would renew the Price Anderson Act for 20 years. That 1957 law caps the nuclear industry’s liability for accidents at $9 billion (current estimates for accident damages are about $600 billion).
"Nuclear power is the cancer industry," says Dr. Helen Caldicott, a pediatrician and founder of the Nuclear Policy Research Institute. The radioactivity from nuclear power, she says, "will over time produce an epidemic of cancer, particularly among children who are vulnerable to it," she says.
President Bush told the National Small Business Association that nuclear energy emits "no air pollution or greenhouse gases." Caldicott says that claim is ludicrous. Enriching uranium to create nuclear fuel, she explains, requires a great deal of electricity and is responsible for vast releases of greenhouse gases. Of the call for new plants, she says: "It’s an absolutely criminal act to build new nuclear power plants and dig up uranium."
What about renewables?
President Bush and other prominent Republicans, such as House Resources Committee Chair Richard Pombo, R-Calif., have emphasized the bill’s commitment to renewable energy and to consumers. But while its 1,000-plus pages contain provisions involving renewable energy and energy efficiency, they are often vague, and have longer time frames for completion than the nuclear and fossil fuel provisions. For example, the section mandating that the federal government assess renewable energy potential on public lands simply requires the Interior secretary to "seek to have approved non-hydropower renewable energy projects located on the public lands" within 10 years.
It’s hard to find any good news for the renewable energy industry within the bill, says Marchant Wentworth, Washington, D.C., representative for clean energy with the Union of Concerned Scientists. "There are very minor tax credits for special, qualified facilities for renewable energy, but it doesn’t really require anybody to do anything" in terms of renewable energy or energy efficiency, he says.
Meanwhile, fiscal conservatives say it is irresponsible to grant tax cuts to energy companies — now reaping record profits from high energy costs — at a time when the nation is facing a $450 billion deficit and fighting a $9 billion-a-month war in Iraq.
"(The energy bill) does nothing to meet our energy needs in a more reliable, less expensive, environmentally friendly way," says Jill Lancelot, president of the Washington, D.C.-based Taxpayers for Common Sense. Rather, she says, it amounts to corporate welfare. "These are very, very wealthy oil and gas companies, who on the one hand, are touting to their stockholders in their promotional literature how well they are doing," she says. "On the other hand, they are coming with their hands out to Congress, saying, ‘We need federal support.’ "
The author is an HCN assistant editor.