On the heels of his announcement of a “leaner” energy bill, Senate Energy and Natural Resources Committee Chairman Pete Domenici (R-NM) indicated Tuesday that he is looking to cut the cost of the omnibus energy measure by as much as one-third before offering it on the Senate floor later this month as an amendment to a larger bill.

Specifically, Domenici has asked his staff to come up with $8-$10 billion in cuts to the energy bill’s $31 billion tax package, and has said he plans to nix the liability waiver for producers of the gasoline additive methyl tertiary butyl ether (MTBE), sources told NGI.

These were the “two most controversial items” in the conference report on the broad energy measure (HR 6), which cleared the House last November, but lost steam in the Senate when Republican leaders failed to garner enough votes to bring the bill to the floor.

Domenici “is not trying to reinvent the entire bill,” said an energy industry legislative analyst. He’s “just targeting the issues” that caused the bill to stall in the Senate last November.

“I think it’s a good-faith effort to get the bill [through the] Senate,” he said. But whether Domenici can “line up enough votes” to accomplish that is the million-dollar question, the analyst noted.

Domenici said he has informed House Energy and Commerce Committee Chairman W.J. “Billy” Tauzin (R-LA), who is quiting his chair post later this month (see related story), and the House leadership about his plans to cut the tax package and delete the MTBE safe-harbor provision.

“They aren’t particularly happy about it, but I believe stripping MTBE out is necessary to get this bill through the Senate,” Domenici said. He noted that most of the cost cuts would come from tax incentives, but he did not identify which incentives were most vulnerable.

He anticipates that fiscal conservatives in the Senate will raise a budget point of order with respect to the electricity reliability provision of the bill. “On this vital issue, a budget point of order is inevitable. However, the cost of this provision will be completely offset by fees charged to power companies to implement the program.”

A budget point of order would require 60 votes to overcome.

Despite public sentiment to the contrary, Domenici remains committed to pushing a comprehensive energy bill through the Senate this year. Many lobbyists and analysts in Washington, however, believe the broad measure subsequently will be severed into pieces and tacked onto other legislative vehicles moving through Congress this session.

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