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Congress Strives to Vote Out Energy Bill By August Recess; MTBE Plan Unveiled

After pushing for an overhaul of the nation's energy policy since 2001, President Bush could get his wish this year as the U.S. Congress may actually make good on his request to have an agreed-upon energy bill on his desk by Aug. 1 -- or not.

On Friday, House energy negotiators offered the Senate a plan on the critical issue of cleanup of groundwater sites contaminated by the gasoline additive methyl tertiary butyl ether (MTBE), and liability protection for MTBE producers. Rep. Joe Barton (R-TX), chairman of the energy bill conference committee, and Rep. Charles Bass (R-NH) proposed the creation of an $11.43 billion industry-government fund over a 12-year-period (2006-2017) for the cleanup of MTBE contamination, as well as to protect MTBE producers from product liability lawsuits. The proposal drew immediate objections from some House and Senate Democrats.

House-Senate conferees were expected to meet over the weekend in a rare Sunday session to tackle some of the remaining issues in the energy bill -- oil and gas, the renewable portfolio standard, hydropower, geothermal, climate change, ethanol and fuels, and research and development. A conference session also has been scheduled for Monday at 2 p.m. If all goes well, Barton hopes negotiators will wrap up the energy bill report early this week.

Speaking at the Natural Gas Roundtable luncheon last Wednesday, Marnie Funk, a spokeswoman for Sen. Pete Domenici (R-NM), one of the top negotiators on the energy bill, classified the mood surrounding the 2005 energy measure as "optimistic," adding that there is a good chance it could be on Bush's desk by late this week, prior to Congress leaving for its month-long recess in August.

"We are very pleased at how well the energy bill conference is going right now," Funk said. "I would describe everyone as optimistic and exhausted. The odds on getting the energy bill to the president [this] week are 70% right now."

She noted that the mark-up went "very well" last week and said the hope is to have the last conference meeting on Monday (July 25). "We are hoping to close the deal Monday night," she said. Rep. Joe Barton (R-TX), chairman of the energy bill conference committee, said an agreement on the bill would come early this week -- or not at all, according to a report in CQ Green Sheets.

Funk said she believes the timing of the Supreme Court nomination is also playing a role in the expedition of the energy bill debate. If the energy bill gets on Bush's desk before the August recess, then Congress can focus on confirming a Supreme Court nominee when they get back in September. "I do think it plays into this," she said.

Funk added that when an issue can't be agreed upon by the staff, the item goes in front of "the Big Four," which includes Domenici and Sen. Jeff Bingaman (D-NM) from the Senate Energy and Natural Resources Committee, and Barton and Rep. John Dingell (D-MI) from the House Energy and Commerce Committee.

Despite the optimism, Funk noted that one of the reasons the conference was moving so smoothly and quickly so far was because the panel has been focusing on the easy issues first. She allowed that the MTBE issue could be a sticking point. "Will we have enough time to have an MTBE deal by Monday night?...I don't know," she added.

If the Barton-Bass proposal on MTBE fails, House conferees will be confronted with the difficult decision of either dropping a provision to protect MTBE producers from product liability lawsuits to get a deal that will clear in the Senate, or allowing one of President Bush's top legislative priorities -- the energy bill -- to languish over the August recess and perhaps longer, CQ Green Sheets reported.

"One other thing we don't know is whether or not the tax boys will be able to finish by Monday," she said. Sen. Charles Grassley (R-IA), chairman of the Senate Finance Committee, and Rep. Bill Thomas, chairman of the House Ways and Means Committee, "told us they think they can be done [with a tax package] by Monday."

With Bush's nomination of appellate Judge John J. Roberts Jr. to the Supreme Court last week and amid speculation that liability protection for producers of MTBE could be abandoned to salvage the energy bill, a Washington, DC-based research group last week raised its odds for passage of the omnibus energy bill measure year to 85% from its previous estimate of 60%.

The selection of Roberts, who currently sits on U.S. Court of Appeals for the District of Columbia Circuit, "is likely to avoid triggering a meltdown in the Senate that would threaten the ability of the chamber to enact legislation," wrote energy analyst Christine Tezak of Stanford Washington Research Group in an "Energy/Electricity Policy Bulletin" last Wednesday.

"This choice has encouraged us to raise our odds on enactment based on the belief that Judge Roberts will likely have a noisy but successful confirmation process and that prospects that the energy bill conference report being a casualty of a Democratic-led filibuster fight over judges is now much lower. We're now at 85% chance of enactment this year," she said.

But "what is more important, however, is the speculation that if an MTBE deal is spurned by the Senate, Barton will abandon the effort in order to save the broader [energy] bill," Tezak noted. "This incremental change indicates to us that MTBE manufacturers may not succeed in securing the shelter from the defective product liability lawsuits they seek in the bill, and may be left with the status quo of protecting their interests in court."

Barton has spearheaded the effort to reach a deal on product liability protection for producers of MTBE in the form of a trust fund that would likely have both private and public funding components. Producers are facing lawsuits in more than a dozen states for MTBE contamination of the groundwater.

"Everything will depend on the size of the trust fund offered to the Senate," Tezak said. Sen. Judd Gregg (R-NH), a key opponent of MTBE liability protection, said last Wednesday the trust fund needed to be at least $15 billion, with an option to raise the amount if needed. "The open-ended nature of his request will be a hard feature [for] industry to accept," she noted.

"The most important change on this item...is the view held by increasingly more people in Washington that Barton may not hold the [energy] bill hostage to retain the MTBE provisions. Given the staunch opposition in the Senate, clearly he must craft a deal the Senate will accept or face a filibuster. The other option is to decide that, in spite of his best efforts, a deal can't be done and the provision must be dropped."

The MTBE issue sank the energy bill in 2003. Barton, as chairman of the conference committee on the energy bill, does not want to see a repeat this year.

Given the "conciliatory choice" of Roberts to replace Justice Sandra Day O'Connor on the Supreme Court, Tezak said earlier last week that some of the pressure was off to get a energy bill conference report voted out by Congress by Aug. 1, as requested by President Bush. "We do not think that the bill being enacted in August is particularly material, and that a slip in time until after the August recess would not change our revised call raising our expectation for the bill's enactment this year. As long as Chief Justice William Rehnquist stays on the job, we think that this bill gets done. If he announces a sudden retirement or passes unexpectedly, we will have to revisit our analysis if it is feared that a replacement would be highly controversial." On Friday, however, Tezak conceded it was entirely possible that Congress may meet the Aug. 1 deadline.

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