Needed: An Energy Bill that Can Become Law

By September 17, 2008Energy, Labor Unions, Taxation

Below we assert that the House-passed energy legislation, H.R. 6899, will not become law. We base the assertion partly on this:

[Critics] of the bill say the absence of revenue sharing for new-producing states means a major means of enticing expanded production is missing. Senator Mary Landrieu (D-Louisiana) has declared the House measure “dead on arrival in the Senate”. She says in her view, “the Senate will never pass a bill without revenue sharing.”

The House bill does not affect a 2006 deal that gives Louisiana and other states currently producing offshore energy a guaranteed share of the revenue. Landrieu said it is unfair for any coastal state willing to allow production off of its coastline not to be guaranteed a set amount of revenue in return. Landrieu said, “it remains today a fairness issue to coastal states.”

And partly on this, the Statement of Administration Policy issued yesterday:

The Administration strongly opposes H.R. 6899. At a time when American families are in need of genuine relief from the effects of high fuel prices, this bill purports to open access to American energy sources while in reality taking actions to stifle development. Specifically, though H.R. 6899 would open the Outer Continental Shelf (OCS) to oil and gas exploration in some circumstances, it would do so only in combination with other provisions rendering this opening ineffective. This bill does not allow for revenue-sharing with States, eliminating a critical incentive for them to permit exploration off their shores. Moreover, this bill would replace current, temporary prohibitions on OCS leasing with permanent prohibitions against accessing significant amounts of our OCS oil and gas resources. If H.R. 6899 were presented to the President, his senior advisors would recommend that he veto the bill.

Many of the other provisions contained in this bill are taken from other House bills that failed to pass through the Congress, or have been subject to veto threats. Including these poison pills further demonstrates a lack of seriousness about expanding access to the vast domestic energy resources in the OCS. These include: (1) imposing targeted tax increases on energy companies, which would reduce domestic production, increase energy costs, reduce the competitiveness of American companies doing business abroad, and hurt the U.S. economy; (2) imposing a one-size-fits-all national renewable power mandate that ignores regional differences, effectively overriding the individual mandates or policies established by more than 25 states, and increasing electricity costs in States where there are relatively few renewable resources; (3) drawing down the oil in the Strategic Petroleum Reserve simply to manipulate prices, and reducing our ability to respond to severe energy supply disruptions (demonstrated most recently during Hurricanes Gustav and Ike) and thereby jeopardizing the Nation’s energy security; (4) forcing holders of certain deepwater oil and gas leases issued in 1998 and 1999 by the Clinton Administration to renegotiate the terms of their leases or pay an excessive fee in order to remain eligible to bid on new leases; and (5) expanding the application of Davis-Bacon Act prevailing wage requirements contrary to the Administration’s long-standing policy of opposing statutory attempts to expand or contract the Davis-Bacon Act.

Davis-Bacon provisions? America needs more domestic energy production, and instead the bill’s sponsors promote organized labor’s agenda to increase the cost of construction projects. How does that help consumers and manufacturers harmed by rising energy costs?

Anyway, DOA everywhere except campaign commecials.

Join the discussion 2 Comments

  • Carter Wood says:

    Not an area of expertise. It’s a serious matter, but neither should we talk ourselves — or let the media talk us into — a panic.

  • Does IAM & this page have anything to say about what’s going on in our markets? I love the blog, but the silence around this once every 100 years phenomenon is deafening.

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