NEWSROOM

House Passes Two Energy Bills; More Substantial Proposals Run Out of Gas

Thursday, June 26, 2008

(CQ Today)

 

By Coral Davenport, CQ Staff

 

After weeks of partisan backbiting and blame-trading over record oil prices, Congress leaves town for a weeklong recess with only a handful of modest new energy measures to point to.

 

In the House, lawmakers passed two energy bills Thursday in the final votes before recess — and only after a flurry of more substantial proposals failed or fell apart before reaching the floor.

 

The House voted, 322-98,to pass a bill (HR 6052) that would provide transit agencies with grants to expand services and subsidize fares. The House also passed, 402-19, legislation (HR 6377) that would authorize federal regulators to take “emergency steps” to tighten oversight of oil futures trading.

 

However, a contentious bill (HR 6251) pushed by Democrats to strip oil companies of energy production leases they are not using failed to win the two-thirds majority needed under an expedited procedure. The bill, which Democrats dubbed “use it or lose it,” failed on a 223-195vote.

 

Neither of the measures that passed would have a serious, long-term impact on energy supplies or prices, analysts said. Experts said the debate was designed more to score points with constituents angry about gasoline prices than to reshape policy.

 

“Much of what is going on on Capitol Hill is to inoculate [lawmakers] against attacks that might be waiting for them when they go home for July Fourth weekend,” said Sherry Bebitch Jeffe, a political analyst and senior scholar at University of Southern California’s School of Policy, Planning and Development.

 

Jeffe said the partisan gamesmanship probably will matter little to constituents beyond the Capital Beltway.

 

“Americans have personalized the energy problem, and the symbol is the high price of gas, which they don’t believe Congress has any power over,” she said. “The whole mechanics of government are too far away for people to focus on. It’s become simplified, it’s become personalized. There’s no indication that people believe Congress can wave a magic wand and make it better.”

 

With polls showing increased support for more domestic oil and gas production, Republicans have pressed to open new sections of U.S. coastal waters and Arctic wilderness to energy exploration — and to blame Democratic opposition for higher gasoline prices.

 

The dispute now threatens to hold up the annual appropriations bills.

 

House Appropriations Chairman David R. Obey, D-Wis., adjourned a scheduled markup Thursday after Republicans tried to add the entire Interior appropriations bill as an amendment to the Labor-HHS-Education spending bill.

 

Republicans want a markup of the Interior bill so they can offer amendments to expand areas open to drilling.

 

“It’s stunts like this that make people hate Washington,” Obey said, threatening to halt the appropriations process.

 

Floor Action

 

On the House floor, Democrats offered their “use it or lose it” measure to put Republicans on the defensive. The Democrats say oil companies already lease 68 million acres of government land and waters that they are not exploiting. Before opening new areas, they argue, the companies should be forced to use the leases they hold.

 

“Our Republican friends have . . . charged that we’re keeping the best lands out of the hands of oil and gas companies,” said Majority Leader Steny H. Hoyer, D-Md. “That is not the case. They can say it again and again and again but it is not the case.”

 

Minority Leader John A. Boehner, R-Ohio, called the bill “another excuse” for not developing domestic energy supplies.

 

“We’re going to blame it on speculators, blame it on oil companies, blame it on OPEC,” he said. “There’s only one group, only one group in this chamber we ought to blame, and that is all the liberals in this House who have voted for ‘no energy’ each and every time over the last 18 years that I’ve been here.”

 

Despite the partisan divide over drilling, passage of the bill authorizing emergency steps to regulate oil futures trading suggests potential for bipartisan progress after the recess. Although experts disagree about the impact of speculation on prices, many lawmakers from both parties insist speculation contributes anywhere from 10 percent to 50 percent of the price of crude oil.

 

Several legislative proposals are under consideration, including bills to boost funding and staffing for the Commodity Futures Trading Commission (CFTC) and to apply U.S. reporting requirements to trades in offshore markets. Other legislative proposals would impose new restrictions on traders.

 

The bill passed Thursday was rushed to the floor while lawmakers try to reconcile the competing approaches. It would require the CFTC to invoke a temporary state of emergency on oil futures prices, reflecting an acknowledgement that market prices do not reflect supply and demand.

 

That would allow the commission to use such tools as limiting the total value of a trader’s open accounts, suspending trading by certain traders or shutting down markets altogether.

 

Lawmakers also expect to work next month on extending incentives for renewable energy, such as solar, wind and geothermal, but Republicans have balked at Democratic proposals to offset the lost revenue by stripping oil companies of some tax breaks.

 

“They’re coming back after the holiday and they still have time to get things done,” said Paul Bledsoe, spokesman for the National Commission on Energy Policy, which advises Congress on energy issues. “There could still be an agreement on market oversight for futures speculation on oil and there could be agreement on extending funding for production incentives for renewables. That seems like a very doable list.”

 

Bledsoe said there is potential for breakthroughs on more intractable issues if prices keep rising.

 

“The higher the price gets, the greater there is a possibility of bipartisan compromise on issues that have been stalled for decades,” he said.