US Congress Agrees On Terms Of Energy Bill

by Mike Godfrey, Tax-News.com, New York

18 November 2003

Senator Pete Domenici (Rep. - New Mexico) and Representative Billy Tauzin (Rep. - Louisiana), chairmen of the Senate and House energy committees announced on Friday that they have reached agreement on the terms of an energy bill, something that has seemed unlikely for most of 2003. Mr. Domenici said he would give Democrats 48 hours to review the bill before calling a conference meeting for a formal vote, and that the bill could come up for a vote in the House by Tuesday and in the Senate by Wednesday.

The bill, which takes up more than 1,700 pages, will provide tax breaks for the development of oil, natural gas, coal and nuclear power, encourages the use of corn-based ethanol as a gasoline additive and eases environmental restrictions on the development of oil and gas on federal land. The compromise bill largely reflects President Bush's energy agenda, although it doesn't include the proposal to open an Arctic wildlife refuge in Alaska to oil drilling, which would have been unable to surmount opposition from an entrenched cross-party pro-Alaska group in the Senate.

Measures in the bill are likely to cost between $16 billion and $19 billion, most of it going to tax incentives aimed at boosting energy production.

There has been sustained pressure on Congress to come up with a bill since the August power blackout highlighted the parlous state of the nation's power transmission system. For the first time, the government will impose reliability standards on the transmission system. Agreement comes after important differences on ethanol and other tax breaks threatened for a while to wreck the chances of a bill this year. Vice President Dick Cheney, who has had responsibility for the progress of the bill, intervened personally a week ago to get an agreement on ethanol taxes.

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