Republicans begin public campaign to mark energy bill's passage

Washington (Platts)--26Jul2006

The Bush administration and Republican lawmakers gathered Wednesday to
extol the energy bill Congress passed last year, crediting it with a surge of
investments they said would increase energy security, but at the same time
stating it has shortcomings that need to be addressed.

The Energy Policy Act was enacted August 8 after five years of debate but
almost immediately came under fire after Hurricane Katrina exposed supply
limits and caused gasoline price spikes.

"None of us said this was going to solve all the problems," Energy
Secretary Samuel Bodman said, referring to pump prices that remain just below
an all-time high. He and the two of the main architects of the law, Senator
Pete Domenici of New Mexico and Representative Joe Barton of Texas, focused on
infrastructure investments since last summer, crediting the law for 27 ethanol
refineries and more than 120 coal power plants in the works; the approval of
five liquefied natural gas terminals; and two dozen applications expected for
new nuclear plants.

They also hailed the law for setting mandatory electric reliability
rules, which Domenici said would stave off blackouts. They did not mention the
price of oil, which is driving capital toward alternative fuels. "I expect
years from now people will see the benefits of this important law,"
Bodman said.

Still, Republicans said follow-up legislation--to increase offshore oil
and natural gas production, expand petroleum refining capacity and shore up
the troubled Yucca Mountain repository project--was needed. "We still need to
do more," Barton said. "Life happens. Katrina happens. ... We left a lot on
the table" when we passed EPAct, he said.

Democrats, many of whom voted for EPAct, faulted it for not reducing
prices. "A year after Republicans touted the bill as a giant step forward in
addressing our energy crisis, gas prices are at record highs, America is just
as dependent on foreign oil, and Big Oil's profits have reached record highs,"
they said in a statement. "A year later, the failure of EPAct, its
implementation and the Bush-Cheney energy policy could not be more clear."

Senior administration officials will be traveling leading up to August 8
to publicize EPAct and certain programs established under the law. As part of
this, they are expected to kick off a loan-guarantee program for a range of
energy projects; begin a process to alleviate major electricity bottlenecks;
and outline the government's risk insurance that will be available to sponsors
of new nuclear plants.

--Mike Schmidt, mike_schmidt@platts.com

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