2004 Energy Agenda Looks A Lot Like Last Year's -H.R. 6 Hangs In Balance
When official Washington returns in earnest from the holidays, energy
policy-makers will be faced with many of the same problems that were on the
table this time last year. In fact, many of the big energy problems hanging
around today - growing dependence on foreign imports, the lack of consensus on
how to balance energy production and conservation, and to some extent, high
prices and aging infrastructure - have gone unresolved for a decade or more.
The energy bill (H.R. 6) favored by the Bush administration and most Republican
congressmen remains the top priority for national policy-makers, as it was in
2003. Supporters say it would improve the diversity of energy supplies, stave
off future power outages like the one in August and reduce oil imports.
GOP lawmakers began 2003 with the hope that their control of both chambers would
ensure swift passage of a landmark energy bill. Inter-party squabbling over pet
provisions nearly killed the bill, which needs just Senate approval of the
conference report to land at the White House, where it would be signed into law.
Though it only narrowly failed to gain Senate approval in November, even senior
GOP staffers acknowledge a difficult fight ahead for 2004. They hope to see the
bill on the Senate floor for votes by springtime.
The legislation, which would be the first rewrite of energy policy since 1992,
would institute the most change in the electricity sector, with sponsors hoping
to create a national power grid. It would also provide more than $30 billion in
tax incentives to encourage greater production of energy from all domestic
sources, including renewables.
What remains to be seen is whether this new "policy" will do what
supporters say it will do: improve energy security and sustain the economy by
reducing imports and stimulating production and development of new technologies.
The Energy Department's Energy Information Administration has not conducted a
full-fledged analysis of the legislation to see if it would achieve some of
those lofty goals.
There is consensus in Washington that a new energy policy is needed, for a
variety of reasons. EIA's latest long-term outlook shows oil imports, for
example, comprising 70% of demand by 2025.
The energy bill aims to revive the nuclear power and coal industries. Coal is
the centerpiece of the administration's energy policy, in part because of the
fear that rising natural gas prices from soaring demand will hurt the economy
over the next two decades.
Top Bush officials are looking to coal and gas to serve jointly as a
"bridge" to the hydrogen economy the White House highlighted in
January 2003.
The other major legislative goal for the Bush administration in 2003 was
"Clear Skies" legislation, named a higher priority than the energy
bill by some in the White House early last year. It would rely on a market-based
cap and emissions trading to reduce power-sector emissions.
While both the House and Senate committee of jurisdiction held hearings on the
proposal (H.R. 999, S. 485), neither took action - some in the majority want to
pursue the measure in early 2004, before election-year politics consume the
Capitol. Passage by both houses of Congress seems remote, especially with
Democrats united in wanting carbon dioxide emissions addressed under the bill.
Seeing the road ahead, the Environmental Protection Agency's new chief, Michael
Leavitt, in late-2003 moved to administratively install Clear Skies under
authority provided by Congress in 1990. But the two proposals to do this
weakened the mercury component so that utilities would have zero incentive to
reduce mercury emissions below the business-as-usual forecast.
While the energy bill may be the biggest energy-policy priority for the White
House, the toughest fight for the Energy Department in 2004 will likely be over
the proposed high-level waste repository at Yucca Mountain in Nevada. The
longstanding fight between the state and the federal government will take on
more urgency later this month, when the two sides square off in a federal court
in Washington.
A final resolution to the controversy is unlikely to occur this year, or anytime
in the future. Nevada's legal team told reporters last month that regardless of
the outcome the pending case is likely to go to the Supreme Court.
Oral arguments are scheduled for Jan. 14; the court is expected to make a
decision by summer. Nevada claims DOE is ignoring laws that require the site be
primarily a geologic barrier, not a manufactured one. Lawyers also will argue
that it is unconstitutional for the other 49 states to force Nevada to accept
nuclear waste shipments. DOE has said the Nevada's arguments have no merit.
DOE plans to file a license application for Yucca Mountain by December 2004 for
the right to store spent fuel at the site.
Although the battle will rage into 2005 and beyond, 2004 will provide a major
sniff test as to whether DOE has followed the law in choosing Yucca Mountain; if
the plan for shipping the waste by 2010 is technically sound enough to meet the
schedule; and whether opponents have gained any foothold to derail DOE efforts
to store the waste there.