House Democrats made clear last week that they favor some of the same actions as the Republicans to resolve the current energy crisis — improving the energy transmission/transportation infrastructure, increased drilling on public lands, expedited permitting for pipelines and production tax credits — but they insist these can be accomplished without compromising the environment.
While Democrats favor expanding energy production, “[we] reject President Bush’s misguided notion that America must sacrifice the environment in order to maximize energy production,” said the House Democratic Caucus Energy Task Force, which issued last Tuesday a blueprint for a future energy bill. A spokesman for Rep. Martin Frost (D-TX), who chairs both the caucus and the energy task force, was unable to predict when legislation would be introduced in the House.
“Democrats do not believe we need to open our most pristine wilderness areas to oil and gas drilling, when the vast majority of America’s oil and gas resources — meeting decades of energy needs — are on less sensitive lands already open to energy development,” the task force declared in its “Principles for Energy Prosperity,” which was unveiled during a press briefing at an Exxon station on Capitol Hill. It underscored the Democrats’ opposition to the Republican plan to open the Arctic National Wildlife Refuge for oil and gas exploration.
Unlike Republicans, the House Democratic task force believes conservation and energy efficiency will be an integral part to digging the country out of the current energy fix. “Since the energy crisis of the 1970s, America has saved or produced four times more energy through efficiency, conservation and renewables than was produced from other new sources…However, President Bush is now practicing divisive politics by proposing a shortsighted policy that disparages the value of energy efficiency and renewable energy.”
The House Democrats’ energy principles were seen as a preemptive strike to the recommendations of Bush administration energy task force that were issued last Thursday, as well as to the comprehensive energy bill that was introduced by Senate Republicans earlier this year.
As the cornerstone of their blueprint, the House Democrats proposed “innovative tax incentives” to encourage the public and companies to be more energy efficient and to conserve without having to make “large and painful lifestyle changes.” Specifically, they called for a consumer tax credit of up to $4,000 on purchases of newly constructed or manufactured homes that exceed efficiency standards; retrofits of existing homes with renewable energy generation, cogeneration and/or geothermal heating/cooling; and purchases of cars and/or light trucks/sports utility vehicles/minivans equipped with fuel-saving new technology or alternative fuel engines.
On the business side, House Democrats proposed a 30% investment tax credit for business investments in renewable energy generation, and would permit businesses to take a deduction for increasing energy efficiency in non-residential buildings, such as commercial buildings, state and local government buildings and rental housing. They also would offer a 30% investment tax credit for purchases of cars and/or light trucks/SUVs/minivans that have fuel-saving technology.
House Democrats said they further favored the expansion of “energy efficient mortgages,” whereby federally sponsored secondary market institutions and federal loan programs would be required to offer financing tools that provide incentives to boost energy efficiency. They also support increased funding for weatherization and low-income energy heating assistance programs.
On the natural gas front, the House Democratic Caucus energy task force called for tax incentives for marginal wells and domestic exploration, a production tax credit to promote the development of a new trans-Alaskan natural gas pipeline, creation of a natural gas reserve to minimize price spikes, and speedier approval of gas pipelines by the Federal Energy Regulatory Commission.
With respect to electricity, the House Democrats proposed that the National Academy of Science undertake a study of the country’s existing transmission grid to identify infrastructure bottlenecks so that the “federal government can then target incentives to the highest priority modernization projects.”
In an effort to end price gouging in the West, they urged Democrats to support legislation sponsored by Sens. Dianne Feinstein (D-CA) and Gordon Smith (R-OR), or a bill authored by Rep. Jay Inslee (D-WA). Both measures would impose “”just and reasonable” cost-based rates on bulk power transactions until March 1, 2003. In addition, they proposed that all federal facilities in the Western Interconnection, and in other regions susceptible to shortages, reduce power usage by a minimum of 8% daily.
The House Democrats also supported favorable tax incentives for renewable fuels. Specifically, they advocated increasing the existing investment credit for the renewable energy infrastructure to 20% for solar and geothermal, and extending the credit to wind and biomass and other renewable energy. They also recommended boosting the current tax credit to 2 cents/kWh for power produced from renewable fuels.
Furthermore, they proposed creating a “Clean, Alternative and Renewable Energies” Public Benefits Bank to provide flexible financing to spur the development of domestic renewable energy generation. Funded at $1 billion a year for the next decade, the so-called CARE Bank would finance renewable fuel projects for state and local governments, schools and universities, and non-profit groups and cooperatives.
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