G.O.P. Energy Bill Is Likely to Set Off Fierce Policy Fight
Central to Mr. Murkowski's bill is
a provision to permit oil drilling
inside the Arctic National Wildlife
Refuge, a wilderness area in
Alaska's north slope."
……………………………………..**************………………………………..
"Just imagine this happening on the edge of Yellowstone National Park or
Yosemite," said former President Jimmy Carter."
By LIZETTE ALVAREZ
from The New York Times
W ASHINGTON, Feb. 26
— Declaring that the
nation faced an energy crisis
threatening its security and
economy, Senate Republicans
today proposed the first major bill
in a decade to overhaul energy
policy and spur domestic oil
exploration.
The bill, presented by Senator
Frank H. Murkowski of Alaska,
the chairman of the Energy and
Natural Resources Committee, is
expected to unleash one of the
year's fiercest policy debates
pitting business groups led by the
oil industry against
conservationists. The measure's
introduction comes after rolling
power cutbacks in California, a
problem Republicans say will give
their bill fresh momentum.
Central to Mr. Murkowski's bill is
a provision to permit oil drilling
inside the Arctic National Wildlife
Refuge, a wilderness area in
Alaska's north slope. That
proposal has met with strong
resistance in Congress in the past
and is vehemently opposed by
many Democrats and some
Republicans, who say it would
needlessly disrupt the refuge.
"American dependence on foreign oil threatens our national security and
our freedom, and we need to recognize that," Senator Trent Lott of
Mississippi, the majority leader, said today on the Senate floor in support
of drilling in the refuge.
Supporters of the drilling proposal say high natural gas prices are the
legacy of the country's failure to adopt a comprehensive energy policy.
Still, they acknowledge that opening the wildlife refuge to drilling would
not produce benefits for consumers for at least five years.
Senator John Kerry, Democrat of Massachusetts, has threatened to
filibuster any bill that would permit drilling in the refuge. And in the
Senate, any pro-oil industry measure is certain to face legislative hurdles
raised by Democrats.
President Bush, a former oil executive, is a strong supporter of drilling in
Alaska, but the package of tax breaks intended to encourage exploration
goes far beyond the tax credits Mr. Bush mentioned in his own energy
plan on the campaign trail. The Senate package could also run into
conflict with Mr. Bush's vow to push through in his $1.6 trillion tax cut
plan with no changes.
Mr. Bush has directed Vice President Dick Cheney to create a task
force on energy policy and to work with Congress on steering a bill
through Congress by this summer.
The White House press secretary, Ari Fleischer, said Mr. Murkowski's
bill was off to "a very good start."
Mr. Murkowski's 300-page bill is intended to reduce the nation's use of
foreign oil to 50 percent, down from the current 56 percent, by opening
up new tracts of land for oil exploration. The bill would also promote the
production of natural gas, coal and nuclear energy and increase home-
heating assistance for the poor.
The bill includes numerous tax breaks to spur oil and natural gas
production, promote solar and wind energy and encourage nuclear
power plants to produce more electricity. Some of the provisions are
intended to attract Democrats by offering tax breaks for people who buy
energy- saving cars and appliances.
But some Democrats instantly cited the bill as an example of the kind of
frenzy for tax cuts that could take place this year, calling it an ornament
on the Christmas tree," as one Democratic aide put it. Mr. Bush used
similar language last week in saying he would resist demands to add more
tax breaks to his plan.
Taxpayer groups immediately attacked the bill today as a boon to oil and
utility companies, industries that contribute heavily to the Republican
Party, and said the bill would cost taxpayers at least $21 billion in
subsidies and tax breaks to energy companies. The total cost of the bill is
still being calculated by the Congressional Budget Office.
"The bill will not solve the energy crisis, but will make already profitable
companies even wealthier," said Cena Swisher, program director for
Taxpayers for Common Sense, a group in Washington that monitors
federal spending.
The legislation, for example, would benefit big oil companies by reducing
the federal royalties they pay when the price of oil falls below $18 a
barrel and natural gas prices drop below $2.30 per thousand cubic feet
for 90 straight days.
Oil companies that deal with small-scale wells would be awarded tax
credits when prices fall as a way to provide an incentive to keep such
wells operating. Owners of so-called stripper wells would get a tax credit
of $3 per barrel when oil prices fall below $15 a barrel and a 50 cent tax
credit on each 1,000 cubic feet of gas produced when gas prices drop
below $2 per thousand cubic feet.
Mr. Murkowski said he sought to balance the need for a sound energy
policy and the concerns of environmental groups and conservationists.
But Mr. Murkowski, along with other Republican leaders, emphasized
that his chief aim was to increase oil production in the United States and
reduce the country's reliance on oil imported from "unstable nations" like
Iraq and Iran. The United States imports 750,000 barrels of oil a day
from Iraq.
For this reason, he said, drilling in the Alaskan refuge, which is often
referred to by its initials, A.N.W.R., makes sense. "The reality of
A.N.W.R. is that if you are looking to increase supply, you look at where
you are mostly likely to find it."
The federal government estimates that the refuge's coastal plain could
hold from 3.2 billion to 16 billion barrels of extractable oil. Mr.
Murkowski said oil drilling technology had vastly improved over the
years and would do little harm to the refuge and the migrating caribou.
"It can replace the oil we buy from Saudi Arabia for the next 30 years,"
he said.
In 1980, President Jimmy Carter signed a bill that made Alaskan land a
refuge of 19 million acres, an area the size of North Carolina. Mr. Carter
carved out 1.5 million acres for possible oil exploration if Congress voted
to authorize the drilling.
In an interview today, Mr. Carter said that he opposed Mr. Murkowski's bill just as most major environmental groups do. "I feel that this is ill-advised legislation that would despoil a precious area of our country
for a very small and trenchant amount of oil," Mr. Carter said.
"Just imagine this happening on the edge of Yellowstone National Park or
Yosemite."
Mr. Carter and other Democrats also said the bill failed to address fuel
consumption by including restrictions on the number of sport utility
vehicles and light trucks.
"We can't even talk about a comprehensive energy policy without
concrete policies to reduce oil demand," said Senator Jeff Bingaman of
New Mexico, the ranking Democrat on the committee. "We cannot
produce our way to independence from foreign oil supplies."
All day today, Republicans took to the Senate floor and issued news
releases to promote their energy bill, saying that California's problems are
a harbinger for the rest of the nation. They all cast the debate as a foreign
policy issue, raising the possibility that foreign nations could manipulate
the United States by withholding supplies or pushing up crude oil prices.
For decades, Republicans have pushed to open up broad swaths of the
United States to further oil and natural gas exploration, only to be
stymied by Democrats and environmental groups.
"We have allowed this drift to go on too long," said Senator Chuck
Hagel, Republican of Nebraska. "We can't leave this country subject to
international blackmail because of our reliance on foreign oil. It's far too
dangerous
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