With the nation’s attention squarely focused on energy, SenateRepublican leaders are expected to introduce comprehensive energylegislation very soon to tackle the price and supply problems thatare gripping the country.

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

There is a “big effort on the part of the leadership” to pass acomprehensive energy bill during this session of Congress, he saidduring a Natural Gas Roundtable luncheon in Washington D.C. lastThursday. Senate Majority Leader Trent Lott (R-MS) and SenateEnergy Committee Chairman Frank Murkowski (R-AK) are expected toco-sponsor the bill. Rep. Joe Barton (R-TX) is in the “initialstages” of drafting a companion bill in the House, but it’s notlikely to be unveiled for another month or two.

The centerpiece of the Senate Republicans’ draft legislationcalls for the Arctic National Wildlife Refuge (ANWR) to be openedto oil and natural gas exploration and production. But a Washingtongas lobbyist questioned whether ANWR would make the final cut. “Idon’t know whether they [the Republicans] will fight real hard tokeep it in” if it faces too much opposition, he said, adding thatthey may strip it out and make it a stand-alone measure.

Whatever the legislative vehicle, Lundquist believes the time isripe to get a bill through the Senate on ANWR. “We’ve done itbefore,” he said, but the president at the time refused to sign thebill. There is a “different atmosphere out there” now towards ANWR.Both President George W. Bush and Interior Secretary nominee GaleNorton favor opening the refuge to drilling, he noted.

The Republican efforts to open ANWR will surely be met with someopposition from Senate Democrats. Although there will be “a lot ofcommon ground” between the two sides, the gas lobbyist said theDemocrats will seek “greater emphasis” on renewable energy and willdownplay ANWR.

The Republican draft bill does not specifically address thepower crisis in California, according to sources. That’s becauseleading Senate Republicans — Murkowski, for instance — areopposed to any kind of federal aid to the ailing state. In fact,Murkowski strongly objected to Energy Secretary Spencer Abrahamissuing the emergency orders to extend gas and power sales to thenear-bankrupt utilities in California last week, the gas lobbyistsaid. Sen. Gordon Smith, who represents the neighboring state ofOregon, is said to be lobbying hard to stop the orders as well.

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

In addition to ANWR, the draft legislation does promote greateruse of public lands for energy production, tax incentives forproducers mostly, more construction of pipelines, the streamliningof the pipe certification process, and better coordination amongagencies involved in permitting of new pipelines. It also wouldrequire federal agencies, which are considering taking action thatcould adversely affect energy prices or supply, to first notify theDOE secretary about the details of the proposed action and outlineways to mitigate any harmful effects. The draft also addressesnuclear energy issues and clean-coal technology, but it doesn’tcontain any clean-air provisions.

Lundquist favors the Bush administration setting up amulti-agency task force to deal squarely with energy issues.Secretary Abraham raised the idea during his recent confirmationhearing, he noted. The task force would include representativesfrom a cross-section of federal agencies, such as the EnvironmentalProtection Agency, Treasury and Commerce. He believes this is theonly 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 gaspipeline from Alaska to the Lower 48 states. “We’re sort of seekingout our role” to help bring about the pipeline project, which hebelieves is “definitely viable now.”

He conceded that Florida’s mounting opposition to a proposedlease sale in the eastern Gulf of Mexico was a “very, verydifficult situation,” potentially pitting the state against thefederal government. Gov. Jeb Bush, the brother of President Bush,has asked the Interior Department to cancel proposed lease Sale181, which is scheduled for next December, because he is concernedthat exploration and production will hurt the state’s tourismindustry.

The president “has been very supportive of states rights” onsuch matters, Lundquist said. If President Bush should support hisbrother on this issue, some may view it as tantamount to renegingon his campaign promise to increase E&P activity in restrictedareas in the United States.

In other developments, FERC has been told by the Bush transitionteam to expect replacements for the two vacant Commissioner spotssoon, according to Commissioner Linda Breathitt. “They told us itwas a high priority,” she said last week.

Susan Parker

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