Broad energy legislation is dead on Capitol Hill this year, but nobody in Washington DC wants to admit this reality, a knowledgeable energy legislative analyst says.

“Everybody already knows that. It’s the elephant in the room that nobody talks about,” he told NGI Friday. “There’s not going to be a bill signed by the president” this year. At best, an omnibus energy bill has about a “2% chance” of being passed in 2004, the analyst noted.

The Senate is expected to begin debate on a slimmed-down energy bill (S. 2095) soon, but this will be “just academic” because House Republican leaders have made it “110% clear” they will not consider the revised bill if it clears the Senate. The reason: the newest version of the Senate energy bill has eliminated the liability waiver for producers of the gasoline additive methyl tertiary butyl ether (MTBE), a provision that is advocated by House Majority Leader Tom DeLay (R-TX) and Rep. Joe Barton (R-TX).

If the Senate should pass its energy bill in the coming weeks, the analyst says two things could happen. Either the House and Senate could set up another conference committee to reconcile the differences in their bills, which the analyst believes is unlikely, or the bill just dies.

Congress had the best shot to vote out energy legislation last year, but it missed out on the opportunity, he said. The House passed the conference report on the energy bill (HR 6) in November, but the measure stumbled in the Senate when Democrats successfully filibustered it. The bill also came under attack from Republican fiscal conservatives, such as Sen. John McCain of Arizona, for its pork-barrel spending.

To appease critics, Chairman Pete Domenici (R-NM) of the Senate Energy and Natural Resources Committee slashed the cost of the then-$31 billion bill to about $13-$14 billion by stripping out some of the tax incentives, delaying the effective dates for certain incentives, and deleting the MTBE safe-harbor provision. While he drew high marks for his efforts from some quarters, Domenici’s tinkering with the MTBE part of the bill elicited stern criticism from House Republicans.

Before departing for the Presidents’ Day recess, Senate Majority Leader Bill Frist (R-TN) said he wanted the Senate to consider the energy bill “as quickly as possible,” allowing for as few amendments as possible. Many took this to mean that the Senate would begin debating the energy measure when it returns Tuesday, but a Republican aide signaled that debate could be two or three weeks away.

There are a number of other pieces of legislation that are competing for the Senate’s attention — medical malpractice, welfare, gun manufacturer liability and foreign sales/extra-territorial income, Capitol Hill aides noted.

In the meantime, a major pipeline group sent a letter to Frist and Domenici on Thursday expressing its strong support for the “key natural gas objectives” in the streamlined Senate energy bill.

The Interstate Natural Gas Association of America (INGAA), which represents interstate gas pipelines, extended kudos to Domenici for “his efforts to improve the pipeline certification and construction process” in the measure.

While the Federal Energy Regulatory Commission “has done a commendable job in authorizing new interstate natural gas pipelines in recent years, activism by other federal and state agencies has eroded FERC’s preeminent authority under the Natural gas Act to the point where legislative action is required,” wrote INGAA President Donald Santa, a former FERC commissioner.

INGAA also supported the energy bill’s provision encouraging the construction of an Alaskan natural gas pipeline to the Lower 48 states. “While few natural gas supply options offer as much promise for the United States, any Alaskan pipeline faces significant financing and construction challenges. Therefore, federal government involvement is critical to the success of the pipeline project and the supply relief that it would bring to consumers,” Santa said.

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