NGI The Weekly Gas Market Report
With the nation’s attention squarely focused on energy, topSenate Republican leaders are expected to introduce comprehensiveenergy legislation very soon to tackle the price and supplyproblems that are 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.yesterday. 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 notexpected to be unveiled for another month or two.
The centerpiece of the Senate Republicans’ draft legislationcalls for Arctic National Wildlife Refuge (ANWR) to be opened tooil and natural gas exploration and production (E&P). But aD.C. gas lobbyist questioned whether ANWR would make it into thefinal legislation. “I don’t know whether they [the Republicans]will fight real hard to keep it in” if it faces too muchopposition, he said, adding that they may strip it out and make ita 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 refused to sign the bill. Thereis a “different atmosphere out there” now towards ANWR. BothPresident George W. Bush and Interior Secretary nominee Gale Nortonfavor opening the refuge to drilling, he noted.
The Republicans can expect stiff opposition to ANWR from SenateDemocrats, who are drafting their own comprehensive energy measure.There will be “a lot of common ground” between the two bills, thegas lobbyist noted. But the Democrat initiative will have a”greater emphasis” on renewable energy and ANWR will be noticeablyabsent.
The Republican draft bill does not specifically address thepower crisis in California, according to sources. That’s becausetop Senate Republicans — Murkowski, for instance — are opposedto any kind of federal aid to the ailing state.
In fact, Murkowski strongly objected to Energy Secretary SpencerAbraham issuing the emergency orders to extend gas and power salesto the near-bankrupt utilities in California this week, the gaslobbyist said. Sen. Gordon Smith, who represents the neighboringstate of Oregon, is said to be lobbying hard to stop the orders aswell.
In addition to ANWR, the draft legislation does promote greateruse of public lands for energy production, tax incentives formostly producers, more construction of pipelines, the streamliningof the pipe certification process, and better coordination amongagencies involved in permitting of new pipelines.
It also would require federal agencies, which are consideringtaking action that could adversely affect energy prices or supply,to first notify the DOE secretary about the details of the proposedaction and outline ways to mitigate any harmful effects.
Lundquist believes the Bush administration needs to set up amulti-agency task force to address energy issues. The task forcecould include representatives from various federal agencies, suchas the Environmental Protection Agency, Treasury and Commerce, hesaid. He believes this is the only way that a national energypolicy can be properly implemented.
He further noted Republicans were “very interested” in theenergy industry plans to build a natural gas pipeline from Alaskato the Lower 48 states. “We’re sort of seeking out our role” tohelp bring about the pipeline project, which he believes is”definitely viable now.”
On the issue of electricity restructuring, Lundquist seemed toindicate that this may be placed on the back-burner as a result ofthe ongoing California power crisis. “I think to some extent it[California] will slow down the process” of restructuring, he said.Still, he thinks the Bush administration remains “committed toderegulation.”
He conceded that the brewing controversy in Florida over thestate’s long-time ban against offshore drilling was a “very, verydifficult situation,” but he didn’t see the Bush administrationgetting involved. The president “has been very supportive ofstates’ rights” on such issues.
Florida Gov. Jeb Bush, the brother of the president, happens tofavor restricting drilling in waters off the state’s coast. Somemay view the president’s silence on this issue as tantamount toreneging on his campaign promise to increase E&P activity inrestricted areas 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 yesterday.
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