Energy Bill Again Sinks on Ethanol Tax Fight
Date: 27-Oct-03
Country: US
Author: Charles Abbott
Besides unresolved disagreements on $16 billion in energy incentives, Senate Republicans said negotiations for a compromise bill were snarled by House Republicans' insistence on revising air pollution laws and giving liability protection to the gasoline additive MTBE.
Democrats have been locked out of energy bill negotiations for weeks.
The disputes prompted Senate Energy Committee Chairman Pete Domenici, who is leading the talks, to cancel a Tuesday meeting where he hoped the 56 negotiators would approve a final version of the bill for floor votes. No new date was set.
"It may be that more pressure needs to build to force compromise," the New Mexico Republican said. "I know we will get an energy bill. I will be patient, but how long should the country wait?"
An energy bill is a top priority of the Bush administration.
The draft bill would encourage more oil drilling, coal production and electricity transmission lines as well as doubling ethanol's share of the fuel market and construction of a natural gas pipeline from Alaska to the U.S. Midwest.
Billy Tauzin, the Republican head of the House Energy Committee, said he was "convinced Congress will deliver a comprehensive, national energy bill this year."
Congressional leaders hope to end this year's session by Nov. 7.
Senate Finance Committee Chairman Charles Grassley, Iowa Republican, told reporters, "No, definitely not" when asked if negotiations were at a point allowing a bill this year. He said ethanol was "a major stumbling block."
California Republican Bill Thomas, chairman of the House tax-writing committee, agreed there was no chance of agreement this week on tax incentives for the bill. Without agreement on incentives, the energy bill cannot go to the floor.
Revision of ethanol tax credits was a front-line dispute for the tax writers.
Thomas wants to defer action to a transportation bill next year. Grassley wants to put more money into the federal highway fund to make up for revenue lost to the 5.2 cent-a-gallon tax break given to fuel with a 10 percent blend of ethanol.
The Bush administration backs greater use of ethanol, distilled from corn. Grassley's home state of Iowa, the No. 1 corn state, opens the presidential nominating process with its neighborhood caucuses on Jan. 19.
There was also disagreement, Domenici said, on allowing tax credits to encourage alternative energy to be tradable and whether tax laws should encourage construction of new, cleaner coal plants and environmental upgrades to existing plants.
House Republicans insisted on shielding MTBE makers from defective-product lawsuits. MTBE, an ethanol rival, is a suspected carcinogen that has contaminated groundwater.
Senate Democrats have threatened a filibuster if the final bill protects MTBE.
Domenici also said Republicans who control the Senate by a razor-thin margin could not win passage of a bill that includes the House's efforts to amend the Clean Air Act.
"I certainly understand the House's position on these matters," he said. Pressure for compromise may build as "many of the tax incentives expire" and the Federal Energy Regulatory Commission operates "without clear, new statutory guidance."
His comments appeared to be aimed at congressional bookkeeping rules that would cut the flow of money into the road fund if action was delayed on ethanol taxes. FERC is in limbo with its proposal to establish a nationwide electricity transmission grid, which is opposed by Southern senators.
If ethanol tax changes are made now, an extra $15 billion would be available for federal projects in 2004-09, according to the American Road and Transportation Builders Association.
