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New York Times - Voter Anger May Free Up Energy Bills

FOR IMMEDIATE RELEASE
Contact: Kristin Lee, (202) 785-8683 or kristin_lee@lcv.org November 13, 2007  

The New York Times

November 13, 2007 Tuesday
Late Edition - Final

Voter Anger May Free Up Energy Bills

BYLINE: By JOHN M. BRODER

SECTION: Section C; Column 0; Business/Financial Desk; Pg. 1

LENGTH: 1297 words

DATELINE: WASHINGTON, Nov. 12


Congress saw it coming. Earlier this year, lawmakers warned of an impending energy crisis as they debated wide-ranging legislation to improve automotive efficiency, reward energy conservation and spur development of alternative power sources.

When the Senate passed an energy bill in June, crude oil was trading near $65 a barrel, the highest price in a quarter-century. When the House acted six weeks later on markedly different legislation, oil had passed $70.

Then nothing happened. Oil prices continued to climb while members of Congress bickered among themselves and sniped at the White House.

Lately, the price of crude oil has flirted with $100 -- it settled Monday at $94.62, down $1.70 -- and some analysts have projected $4-a-gallon gasoline by spring. Lawmakers may finally be preparing to act, most likely on a less ambitious set of energy-saving measures than those passed by either house this summer.

Leaders in both houses predicted action on a scaled-down package of energy measures before Congress breaks for Christmas, including some form of higher fuel-efficiency requirements for cars and trucks and incentives for alternative fuels.

To be sure, none of these would have an immediate effect on gasoline prices at the pump. The price of oil is determined in global markets, and Congress can do little about it. But with gasoline and heating oil prices near record levels, lawmakers going home for the holidays to face the electorate want to be able to say that they have taken steps that will eventually help.

''There's a general perception outside of Washington that we haven't done near what we could to move the country to a more acceptable energy mix,'' said Senator Jeff Bingaman, Democrat of New Mexico and chairman of the Senate Energy and Natural Resources Committee. ''Congress has been slow to act, and the administration has been slow to act, and the public is way ahead of us on these issues.''

The frustration over a lack of a coherent national energy policy is bipartisan. The senior Republican on the Energy Committee, Pete V. Domenici of New Mexico, expressed similar dismay at Washington's seeming paralysis.

''It's incredible,'' Mr. Domenici said. ''You would expect us to be much more excited about these high prices, that we'd have a committee working day and night on the problem of oil dependence.'' Instead, he said, the nation has done little since the oil crises of the 1970's, with the exception of a hard-fought 2005 energy bill, which, he contends, has been applied less than effectively by the Bush administration.

John C. Felmy, chief economist at the American Petroleum Institute, also expressed unhappiness at the government's inability to act on energy matters, though from a different perspective. ''It's very ironic the way this legislation is playing out,'' he said. ''Everyone agrees that we're in a very tight energy situation, so why are they writing legislation to make it even tighter?''

The reasons government has not acted are many, and they are as much a matter of perception as they are economic and political. The current run-up in oil prices, while rapid by historical standards, has not been matched by a quick spike in the direct cost to consumers, since gasoline increases can sometimes trail increases in the price of crude oil by months. The American economy has, so far, weathered the increase without badly damaging effects.

The politics of energy are difficult as well, with lawmakers divided not just by party and ideology, but by region. And unilateral moves by the United States will have only limited effect in a global market where the demand for energy, according to many projections, will rise faster than production.

''There's not one single reason for the increase in oil prices and there is not one single solution,'' said Karen Harbert, assistant secretary for policy at the Energy Department.

''We need to diversify our sources of energy beyond just hydrocarbons and accelerate the development of alternative fuels,'' she added. ''And of course we have to increase efficiency -- of appliances, industries, homes and cars.''

Energy measures passed by one house or the other in the summer would seek to do all those things if signed into law. They include mandates for the production of huge new quantities of alternative fuels like ethanol, biodiesel and those made from excess plant material; a requirement that electric utilities produce 15 percent of their power from wind, water or solar energy by 2020; and tax credits and loan guarantees for greener buildings, nuclear power and more efficient home appliances.

But these measures would do nothing to lower prices in the short run, and some of them could result in higher energy prices by making utilities rely on renewable sources like wind or solar power that are more costly than coal and natural gas.

Advocates of a stronger federal energy policy maintain, though, that such steps could eventually alleviate some price pressure by lowering the demand for oil in the United States, by far the world's largest user. And some of the measures would lower the quantities of greenhouse gases the country produces.

The hard part is to find a way to accomplish these measures and pay for them that is acceptable to majorities in both houses of Congress. And some of what lawmakers are pushing, including the repeal of billions of dollars in tax incentives for the oil and gas industries, has drawn a veto threat from President Bush. He has also vowed to veto any bill that contains penalties for price gouging by oil companies or that, in his view, discourages new oil exploration and production.

Environmental advocates express frustration that despite rising fuel prices and a cascade of dire reports on global climate change, policy makers have not taken decisive action.

''Clearly, these record high oil prices should be a final wake-up call that we need a new energy policy in this country,'' said Gene Karpinski, president of the League of Conservation Voters Education Fund, ''and lead us to make sure the next president has significant policies in place and has campaigned on those promises to reduce our dependence on foreign oil.''

Experts and members of both major parties agree that the single most effective way to address the problem of American oil imports and consumption is to improve the efficiency of cars and light trucks, which use roughly 70 percent of all oil burned here.

But the question of how much to improve auto mileage and how fast is a deeply divisive issue, pitting Republicans against Democrats and those who have automobile plants in their districts against those who do not.

Democratic leaders in the House and Senate hope to enact the auto and light truck fuel-efficiency measure included in the Senate bill, requiring a fleet average of 35 miles a gallon by 2020. Auto companies, the United Automobile Workers union and influential lawmakers from carmaking states oppose it, preferring a weaker measure pending in the House.

One difficulty is that the costs of compliance with new fuel economy standards will be felt fairly quickly, both by the automakers and the millions of drivers who buy their products every year. The savings are felt in small increments over many years.

That, indeed, is the quandary for those who advocate tough new mileage standards as well as those pushing for sweeping climate-change legislation. Many of the costs are short term, while the benefits are somewhere over the horizon.

''Even if they put together a perfect bill,'' said Brian P. Malnak, a lobbyist for Shell Oil and a former top Republican aide to the Senate Energy Committee, ''the results won't be felt in the next election cycle, or even in the careers of some of the members.'' 



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