Ethanol earmark advances in US energy bill talks
Date: 30-Sep-02
Country: USA
Author: Charles Abbott
With pressure growing from the White House, negotiators hope to agree on a compromise energy bill next week that will include tax breaks for domestic drilling, incentives for conservation and development of more renewable energy sources.
Farm state lawmakers from both parties and President George W. Bush have pushed for a provision that would triple to 5 billion gallons the amount of ethanol-blended gasoline and biodiesel used annually in American cars, trucks and sport-utility vehicles.
Under the House plan, ethanol would be guaranteed 2.3 billion gallons of consumption in 2005, rising to 5 billion gallons in 2013 - a year later than the Democratic-led Senate's timetable.
First popularized in the 1970s as a home-grown alternative to imported oil, ethanol has taken prominence as a fuel additive for cleaner-burning fuels. Most of U.S. ethanol is distilled from corn.
Senate negotiators did not respond to the House proposal, which was formally offered to them just before negotiations adjourned until Tuesday. Rep. Billy Tauzin, a Louisiana Republican and chairman of the talks, said issues for the next session could include ethanol, mileage standards and drilling in the Arctic National Wildlife Refuge.
"We will take final action on a number of these next Tuesday," Tauzin said.
Texas Republican Joe Barton, a House negotiator, said it was "extremely bad public policy" to guarantee a market share for ethanol but "I can count votes as well as anybody."
While popular with Midwestern farmers and lawmakers, ethanol has critics in the environmental community.
The 53-page offer from House Republicans also would eliminate federal requirements for use of oxygenated fuels and would not ban use of fuel additive MTBE, as the Senate would.
MTBE is used to boost the oxygen content of motor fuel and limit air pollution. However, 35 states have found MTBE - methyl tertiary butyl ether - contaminating ground water.
The phaseout of MTBE has many Californians fearing an ethanol mandate will mean higher fuel prices and disruptions in supply. Ethanol is not distilled in California and must be shipped by barge, rail or truck rather than by pipeline.
California Democrat Henry Waxman, a House negotiator, said the ethanol language foretold "a massive transfer of wealth" from his state to the Midwest. But, Waxman said, the House proposal would not help California clean up water supplies tainted by MTBE.
Massachusetts Democratic Rep. Ed Markey said gasoline prices would rise by 5 cents a gallon if ethanol use was mandated.
The ethanol industry, led by giant Archer Daniels Midland Co. , says production is booming and output would be more than adequate to meet the demands of the legislation. It says price changes would be minimal.
Under the House language, all types of renewable fuels would be given legal protection against lawsuits claiming they were defective products.
Separately, House negotiators formally offered to their Senate colleagues a proposal to open the Arctic National Wildlife Refuge in Alaska to oil drilling.
The proposal matches what was passed by the full House of Representatives last year to limit drilling activity in the refuge's coastal plain to just 2,000 acres at any one time.
Democratic Sen. Joseph Lieberman of Connecticut, a possible presidential candidate in 2004, said the House's ANWR drilling proposal was a "nonstarter" in the Senate. He said adopting the plan would "doom" the entire energy bill.
Still, Lieberman said he would review alternative drilling proposals.
Drilling supporters are working on a compromise plan that would scale back part of the refuge to be opened to drilling and make those areas where caribou migrate a protected wilderness.
Republican negotiators discussed the compromise idea with Bush during a White House meeting on Wednesday. Bush did not indicate whether he would support such a compromise deal.