House passes energy bill including ANWR

Posted: Sunday, April 13, 2003

WASHINGTON (AP) -- The House approved nearly $19 billion in tax breaks Friday for energy companies and power producers and set up a showdown with the Senate over energy policy, particularly oil drilling in the Arctic National Wildlife Refuge.

The House-passed bill includes sweeping incentives for oil and gas development and a mix of tax and other financial breaks aimed at promoting the traditional fossil fuel industries.

And it revived the long-standing fight over whether to allow oil companies access to crude oil suspected to lie beneath ANWR's coastal plain.

Three weeks ago, the Senate rejected drilling in ANWR. Democratic senators -- including several running for president -- have vowed to block any energy bill that would expose the refuge to development. ANWR drilling has been a top White House energy goal.

The House and Senate also are taking different paths on energy tax incentives.

More than two-thirds of the $18.7 billion House proposal, covering 10 years, is aimed at helping natural gas, coal, and oil development.

A slightly cheaper tax measure -- about $16 billion -- in the Senate focuses more on renewable energy, such as development of wind power. Unlike the House, the Senate also gives a tax incentive to spur construction of an Alaska gas pipeline.

The House bill was approved 247-175 after lawmakers rejected Democratic amendments to encourage energy conservation and reduce production subsidies. A proposal to require automobiles and sport utility vehicles to use 5 percent less fuel by 2010 failed, as did an attempt to eliminate the ANWR drilling.

President Bush called the House-passed legislation ''a major step forward in the effort to secure our nation's energy future'' and said he looked forward to prompt Senate action. The House-passed bill mirrors many of the energy priorities outlined two years ago by Vice President Dick Cheney's energy task force.

Rep. Billy Tauzin, R-La., who guided the bill through two days of floor debate, rejected criticism that the bill focuses too heavily on helping fossil fuel producers and not enough on getting people to use less gasoline and electricity.

''Everyone has a different idea of what balance means,'' Tauzin, whose state is a major energy producer. He said it may be ''a little more pro-production'' than pro-conservation but will improve energy security and give ''a good shot in the arm'' to the economy.

First it must pass the Senate, which is expected to take up energy legislation next month. A Senate committee began working on an energy bill this week, approving some of the same measures in the House bill, including incentives for natural gas production and wider use of corn-based ethanol in gasoline.

But Tauzin acknowledged that the overall Senate bill likely will differ from the House-passed bill in some major areas, including Arctic refuge drilling and contentious issues involving the management of the nation's electric power grids.

Last month, the Senate defeated a proposal to allow ANWR drilling on a vote of 52-48. In the energy bill, which is subject to filibuster, drilling supporters would need 60 votes to get it included.

Still, Tauzin was optimistic. ''The Senate hasn't seen our best offer on ANWR,'' he told reporters Friday.

Sen. Joe Lieberman, D-Conn., one of several Democratic candidates for president who have vowed to block ANWR drilling, said, ''Any plan to drill in the Arctic will be dead on arrival in the Senate.''

While much attention has been on high-profile issues such as ANWR drilling and the lack of anything to boost automobile fuel economy, the bill includes a broad sweep of provisions aimed at helping utilities, oil and gas companies, corn producers, automakers, coal companies and developers of wind power.

The oil and gas subsidies alone, complained Rep. Ron Kind, D-Wis., ''will put hundreds of millions of dollars into the already deep pockets of the major oil companies.'' The bill's supporters said small oil and gas developers will be the primary beneficiaries, not the oil giants.

House Republicans turned back attempts to encourage more energy conservation.

Although the bill contains some tax breaks for buying solar heating equipment and more efficient appliances, it makes no attempt to improve auto fuel economy. Asked about this, Tauzin cited the significant incentives to develop hydrogen-fuel vehicles, which many believe are decades away from showrooms.

While broadly praising the House-passed bill, the White House questioned the size of the $18.7 billion tax subsidies, twice what the president sought. Even a favorite administration fuel efficiency proposal -- a $2,000 tax credit for buying gas-electric hybrid cars -- was omitted. Tauzin said it might be added when the House and Senate bills are reconciled.

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