Trou­ble­some en­ergy leg­is­la­tion

The Washington Times Weekly - - Editorials -

While it seems some lead­ers in Congress are will­ing to com­pro­mise with the White House on an en­ergy bill, back-door wran­gling could grind the mea­sure to a halt, a prospect many con­ser­va­tives and busi­ness groups wouldn’t mind in the least.

The pend­ing bills, ap­proved with sig­nif­i­cant dif­fer­ences be­tween the House and Se­nate, would put in place a num­ber of un­sa­vory reg­u­la­tory mea­sures that the White House has in­di­cated the pres­i­dent would veto.

Par­tic­u­larly re­pug­nant is a pro­posal passed by the House that would im­pose bil­lions in new taxes on the oil and gas in­dus­try all in the name of de­vel­op­ing more ecofriendly re­new­able en­ergy re­sources. This harm­ful mea­sure would re­peal $16 bil­lion in tax breaks for U.S. oil com­pa­nies over 10 years, a move that will fur­ther drive up the cost of gaso­line. While Democrats claim to sup­port re­duc­ing U.S. reliance on for­eign oil pro­duc­tion, this pro­posal would hand­i­cap U.S. do­mes­tic com­pa­nies against their for­eign com­peti­tors by es­sen­tially dou­ble­tax­ing them be­yond the sub­stan­tial for­eign taxes they al­ready pay.

The Se­nate’s en­ergy bill would in­crease the cor­po­rate av­er­age fuel econ­omy, or CAFE, stan­dards for ve­hi­cle mileage for the first time in more than two decades. It would also quadru­ple the use of en­ergy al­ter­na­tives like ethanol. Un­for­tu­nately, the av­er­age CAFE stan­dard passed by the House is 35 mpg by 2020 for both cars and trucks, a stip­u­la­tion that fails to take into con­sid­er­a­tion the vast phys­i­cal dif­fer­ences among cars, trucks and sport util­ity ve­hi­cles. A much more sen­si­ble pro­posal has been of­fered by Reps. Baron Hill, In­di­ana Demo­crat, and Lee Terry, Ne­braska Repub­li­can, that would cre­ate sep­a­rate stan­dards for dif­fer­ent types of ve­hi­cles, ac­knowl­edg­ing that trucks and cars re­quire vary­ing lev­els of fuel for op­er­a­tion. The Hill-Terry com­pro­mise was not adopted in the orig­i­nal House bill, but should a mea­sure emerge out of con­fer­ence, leg­is­la­tors should in­clude this pro­vi­sion.

An ad­di­tional mea­sure fur­ther com­pli­cat­ing mat­ters is a pro­vi­sion in the Se­nate bill that would ex­po­nen­tially in­crease loan guar­an­tees of­fered to com­pa­nies seek­ing to build new nu­clear power fa­cil­i­ties. Wall Street is un­will­ing to grant th­ese sig­nif­i­cant loans to a un­der­de­vel­oped in­dus­try that has not seen a new plant con­structed since the 1970s. Per­haps this con­tro­ver­sial mea­sure should be con­sid­ered on its own mer­its in a sep­a­rate bill, rather than fur­ther en­tan­gling the com­pli­cated ne­go­ti­a­tions sur­round­ing th­ese two bills.

Some an­a­lysts say the en­ergy bill it­self could wither this year, per­haps giv­ing Democrats an op­por­tu­nity for elec­toral grand­stand­ing in 2008 if the bill dies. How­ever, Pres­i­dent Bush is will­ing to work with Democrats — en­ergy pol­icy was a ma­jor com­po­nent of his State of the Union ad­dress — and con­gres­sional lead­ers should be will­ing to com­pro­mise as well.

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