When US President George W. Bush arrived for his first term in the White House the lights were going out in California. The former Texas oilman, advised by his number two, a Texas oil industry veteran, formed an interim administration including an energy task force that included top people from the oil, gas and utility industries in Texas and beyond.
The aim of Bush and Vice President Dick Cheney was to hear from those people -- including Earl Nye of TXU, the lone star state's utility provider, and Kenneth Lay of Enron -- about an overhaul of energy legislation and regulation in the US.
Then the Sept. 11 attacks, the Iraq war and the collapse of Enron intervened. Cheney, however, pressed ahead, producing a report by his energy task force in 2002, and last week the US congress passed a 1,725-page bill addressing every conceivable aspect of energy supply and demand management.
ILLUSTRATION: MOUNTAIN PEOPLE
The passing of the bill comes against a background just as unsettling as the California blackouts -- conflict in the world's key oil producing region, crude prices nudging US$60 a barrel, concerns about security of US energy supplies and reliance on imports. The Washington politics are not easy either. As the bill has gone through its last stages in Congress -- a conference of the House of Representatives and Senate which stitches together separate bills from each house -- key proposals have been torn out and others added.
Environmentalists point out that most of substance that was rebuffed was in the Senate bill. This was considered a greater attempt to grapple with issues of sustainability and climate change than the bill from the House, which is more dominated by Republicans.
Ana Unruh-Cohen, of the Center for American Progress, said: "The House bill was not any good at all. The Senate bill was better, but a lot has been taken out. And we end up with a very bad bill."
For example, while both bills proposed tax relief packages for energy producers -- which must be debated later as part of budget negotiations -- the House proposed US$415 million out of US$8 billion (5 percent) for renewable energy and energy efficiency, with the rest targeted at fossil fuel and nuclear production, while the Senate proposed US$10 billion of a US$24 billion package (45 percent).
Democrats, such as Senate minority leader Harry Reid, point to the need for laws reducing dependence on energy imports, cutting oil consumption, measures to source 10 percent of electricity from renewables by 2030 (20 years later than other countries' targets) and for a passage in the bill to indicate climate change is taken seriously.
But last week's process was dominated by the Republican chairmen of the energy committees in the House and the Senate, Representative Joe Barton from Texas and Senator Pete Dominici of New Mexico, two men known for their strong and deep connections with the energy industry and, particularly in the former case, with the White House.
Barton received US$224,398 from the oil and gas industry and US$221,951 from electricity utilities, the two largest contributions to his House election campaign last year. For Dominici, utilities and oil and gas were two and three, contributing US$190,970 and US$180,308 respectively.
The bill has united natural opponents in condemnation. Even those close to, and with influence in, the White House are opposed. Ben Lieberman of the conservative think tank the Heritage Foundation said: "There are three responses to this bill: it is good, let's pass it, it is bad, let's reject it, and it is a bad bill that could have been worse, so we should pass it and have another go."
Lieberman said he falls into group three, but added: "The people in group one are the energy industry. This is the `no part of the energy industry gets left out' bill."
His objections arise from the principle that government should not interfere with the market, so he is against the US$11 billion package of tax breaks for industry that was agreed.
And, while, like the White House, he is in favor of more nuclear power stations, he is against subsidies for a new reactor in Idaho and against a US$2 billion package of risk insurance if problems emerge during the planning and construction of the first six new plants.
Lieberman argues against tax credits full stop, unlike environmentalists who say they should be used to "incubate" new technologies such as wind, solar and wave power. So, for example, he is against tax breaks for low-emission ethanol -- one of the few measures greeted with enthusiasm by environmentalists -- for the same reasons he is against those for coal. He says policymakers should not try to pick technological winners.
Environmental groups point out that the proportion renewables receive is less than a third (although the combination of renewables, energy efficiency and development of alternative vehicles and fuels is half of the US$11 billion total).
Lieberman said: "This is an energy bill. If it is morphed into an environment bill, that will not be good."
The Heritage Foundation has shared White House scepticism on climate-change science, which has kept the US out of the Kyoto Protocol, though its involvement in last week's Asia-Pacific arrangements concedes the fact of climate change.
Lieberman adds that the bill should not be concerned with reducing US reliance on imports.
"I am not in favor of trying to reduce imports. Nor am I in favor of forcing energy reductions on the American people. That would hurt the consumer and the economy," he said.
It is worth noting that Heritage lists Exxon, Chevron Texaco and General Electric among its corporate donors.
From the opposite end of the spectrum, Karen Wayland, of the Natural Resources Defense Council, said: "This is a huge failure. It is not going to reduce import dependence, it is not going to reduce dependence on oil. It also pumps billions of dollars of subsidy into oil, gas, coal and nuclear industries that are a waste of taxpayers money."
Much discussion last week focused on issues affecting US companies -- for example, measures to penalize industries in areas where ozone levels are low and relaxing clean-air regulations on companies seeking to open or reopen refineries. Both went against industry.
Opposition comes not just on what is proposed, but what has been left out. Neither of Reid's priorities from the Senate bill -- the 10 percent renewables standard, nor the reduction of oil consumption by 1 million barrels a day by 2015 -- survived. Proposals to increase the fuel efficiency of cars and light trucks were also dismissed.
And environmentalists pointed out that although one of the most contentious issues -- drilling for oil in the Alaskan Arctic, which is supported by the House, opposed by the Senate -- was not included, avoiding the risk of a filibuster in the upper house killing it, it could be reintroduced later in another measure.
Unruh-Cohen said: "There are some positives, [such as] the tax incentives for renewables and efficiency, but these must survive another round of negotiation in the budget discussions. The problem is a lot has fallen out."
"The question is `Does this help on imports and the environment?' The answer is that although President Bush will say the passing of an energy bill is a great political achievement, it is a terrible result for the American people," Unruh-Cohen said.
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