Senate Republicans to Unveil Energy Bill Soon

With the nation's attention squarely focused on energy, Senate Republican leaders are expected to introduce comprehensive energy legislation very soon to tackle the price and supply problems that are gripping the country.

The measure, which Senate Republicans have been drafting for the past two months, could be brought to the Senate floor in as little as a week or two, said Andrew Lundquist, majority staff director for the Senate Energy and Natural Resources Committee and head of President Bush's transition team for the Department of Energy (DOE).

There is a "big effort on the part of the leadership" to pass a comprehensive energy bill during this session of Congress, he said during a Natural Gas Roundtable luncheon in Washington D.C. last Thursday. Senate Majority Leader Trent Lott (R-MS) and Senate Energy Committee Chairman Frank Murkowski (R-AK) are expected to co-sponsor the bill. Rep. Joe Barton (R-TX) is in the "initial stages" of drafting a companion bill in the House, but it's not likely to be unveiled for another month or two.

The centerpiece of the Senate Republicans' draft legislation calls for the Arctic National Wildlife Refuge (ANWR) to be opened to oil and natural gas exploration and production. But a Washington gas lobbyist questioned whether ANWR would make the final cut. "I don't know whether they [the Republicans] will fight real hard to keep it in" if it faces too much opposition, he said, adding that they may strip it out and make it a stand-alone measure.

Whatever the legislative vehicle, Lundquist believes the time is ripe to get a bill through the Senate on ANWR. "We've done it before," he said, but the president at the time refused to sign the bill. There is a "different atmosphere out there" now towards ANWR. Both President George W. Bush and Interior Secretary nominee Gale Norton favor opening the refuge to drilling, he noted.

The Republican efforts to open ANWR will surely be met with some opposition from Senate Democrats. Although there will be "a lot of common ground" between the two sides, the gas lobbyist said the Democrats will seek "greater emphasis" on renewable energy and will downplay ANWR.

The Republican draft bill does not specifically address the power crisis in California, according to sources. That's because leading Senate Republicans --- Murkowski, for instance --- are opposed to any kind of federal aid to the ailing state. In fact, Murkowski strongly objected to Energy Secretary Spencer Abraham issuing the emergency orders to extend gas and power sales to the near-bankrupt utilities in California last week, the gas lobbyist said. Sen. Gordon Smith, who represents the neighboring state of Oregon, is said to be lobbying hard to stop the orders as well.

The measure won't deal with the issue of electricity restructuring at all. In fact, Lundquist indicated this might be placed on the back burner as a result of the ongoing turmoil in the California power markets. "I think to some extent it [California] will slow down the process" of restructuring, he said. Still, he thinks the Bush administration remains "committed to deregulation."

In addition to ANWR, the draft legislation does promote greater use of public lands for energy production, tax incentives for producers mostly, more construction of pipelines, the streamlining of the pipe certification process, and better coordination among agencies involved in permitting of new pipelines. It also would require federal agencies, which are considering taking action that could adversely affect energy prices or supply, to first notify the DOE secretary about the details of the proposed action and outline ways to mitigate any harmful effects. The draft also addresses nuclear energy issues and clean-coal technology, but it doesn't contain any clean-air provisions.

Lundquist favors the Bush administration setting up a multi-agency task force to deal squarely with energy issues. Secretary Abraham raised the idea during his recent confirmation hearing, he noted. The task force would include representatives from a cross-section of federal agencies, such as the Environmental Protection Agency, Treasury and Commerce. He believes this is the only way for a national energy policy to be properly implemented.

He further said congressional Republicans were "very interested" in the energy industry's plans to build a long-line natural gas pipeline from Alaska to the Lower 48 states. "We're sort of seeking out our role" to help bring about the pipeline project, which he believes is "definitely viable now."

He conceded that Florida's mounting opposition to a proposed lease sale in the eastern Gulf of Mexico was a "very, very difficult situation," potentially pitting the state against the federal government. Gov. Jeb Bush, the brother of President Bush, has asked the Interior Department to cancel proposed lease Sale 181, which is scheduled for next December, because he is concerned that exploration and production will hurt the state's tourism industry.

The president "has been very supportive of states rights" on such matters, Lundquist said. If President Bush should support his brother on this issue, some may view it as tantamount to reneging on his campaign promise to increase E&P activity in restricted areas in the United States.

In other developments, FERC has been told by the Bush transition team to expect replacements for the two vacant Commissioner spots soon, according to Commissioner Linda Breathitt. "They told us it was a high priority," she said last week.

Susan Parker

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