Two of the most significant energy-related legislative actions to occur during 2007 came late in the year -- congressional passage of a slimmed-down energy bill (HR 6) and the start of debate in the Senate on climate change legislation.

Although it had little to do with natural gas, "passing the energy bill in December certainly was one of the biggest things" to occur for energy on Capitol Hill last year, said Martin Edwards, vice president of legislative affairs for the Interstate Natural Gas Association of America (INGAA), which represents interstate gas pipelines.

The energy bill, which was signed into law by President Bush last month, focused on conserving energy and the production of renewable fuels as opposed to the development of traditional oil and natural gas resources (see NGI, Dec. 24, 2007). The measure, however, was a victory of sorts for natural gas and electricity because two hotly disputed items were dropped -- a renewable electricity mandate and a $21.8 billion tax package that would have repealed oil and gas tax breaks.

And "right up there with it [the energy bill] was the beginning of the debate over climate change legislation in the Senate," Edwards noted. The Senate Environment and Public Works Committee last month voted out the legislation (S. 2191), sponsored by Sens. John Warner (R-VA) and Joseph Lieberman (I-CT), that seeks to reduce U.S. greenhouse gas (GHG) emissions by as much as 19% below the 2005 level in 2020 and by as much as 63% below the 2005 level in 2050 (see NGI, Dec. 10, 2007). The full Senate is expected to take up the bill in the new year.

The way the bill would regulate emissions from natural gas is "very troubling" for INGAA, Edwards said. The measure "needs a lot of work," he noted, adding that without some changes it "could have a lot of unintended consequences."

It would attempt to assign emission credit compliance obligations to natural gas processors and importers of liquefied natural gas (LNG), according to Edwards. However, the bill's definition for processors is "very imprecise and confusing," he said. And there is no definition for gas importer in the measure.

"We don't know whether it's regulating the owners of LNG terminals or their customers who are importing gas. That's pretty significant because one has their costs controlled by FERC and the other doesn't. So it could introduce some major regulatory complexity," Edwards said.

The Warner-Lieberman legislation also would include the natural gas commercial and residential markets under an emissions cap, he noted. "We're more than a little troubled about that," Edwards said, adding it could drive people away from gas appliances.

Instead, he said, INGAA would prefer Congress to propose ramped-up appliance efficiency standards or a carbon tax for the commercial and residential gas markets.

"We would like to work with the Senate and the House on a better approach" in the climate change legislation in the new year, Edwards said.

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