US Senate approves comprehensive energy legislation
Washington (Platts)--28Jun2005
The US Senate Monday passed by 85-12 a $16-bil energy bill that mandates 8-bil gal of ethanol be used in gasoline by 2012, gives the federal government exclusive authority over the siting of LNG plants and mandates grid reliability standards for the nation's electricity infrastructure. The House and Senate now need to negotiate differences in their respective energy bills before a final bill can be voted on again in each chamber and, if approved, signed by the president. Significant differences remain between the House bill, approved in April, and the Senate bill. Two of the biggest are drilling in Alaska's Arctic National Wildlife Refuge and liability protection for makers of gasoline additive MTBE. Both provisions were included in the House bill but excluded from the Senate legislation. The final energy bill most likely will not include ANWR drilling, as the Republican leadership is seeking to move the provision as part of a budget resolution, which cannot be filibustered. Parties are working on a settlement to the MTBE liability issue, which was included in last year's joint bill and ultimately led to the death of the bill in the Senate. This year's Senate bill bans MTBE within four years of the legislation's enactment, eliminates the 2% oxygenate mandate in the Clean Air Act with 270 days of enactment and provides the MTBE industry with up to $1-bil over four years to help ease the transition to ethanol. The legislation also expands the Strategic Petroleum Reserve to 1-bil bbl, from current capacity of 727-mil bbl, and requires the Department of Energy to take into consideration oil costs when filling the reserve. The Senate bill also includes Congress' strongest statement to date on climate change--a non-binding resolution expressing a view of the Senate that climate change is a pressing national problem, and that the US should enact by the end of the year a national program of mandatory, market-based limits and incentives to curb greenhouse gas emissions. The bill requires an inventory of all offshore Outer Continental Shelf reserves, including in areas currently off limits. On the electricity front, the legislation repeals the Public Utilities Holding Company Act and provides a federal backstop to site critical transmission lines. This story was originally published in Platts Natural Gas Alert http://www.naturalgasalert.platts.com
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