US House Democrats are bracing for a battle with the White House over
energy legislation, saying Tuesday they intend to advance an energy bill that
includes provisions which President George W. Bush has threatened to veto,
including those that would take billions of dollars of tax incentives away
from major oil companies.

"The president has said he is going to veto" the bill the Democrats
intend to send him because "it's too tough on the oil industry,"
Representative Edward Markey, a Massachusetts Democrat, told reporters at a
press briefing on Capitol Hill. "We welcome the battle with the White
House. With prices at $88/barrel, this is not the time for the president to do
more for oil companies. It's time for the president to do more for the
American people."

Markey, chairman of the House Select Committee on Energy Independence and
Global Warming, was joined by other members of the committee to decry a letter
sent by Allan Hubbard, the president's economic policy adviser and director of
the National Economic Council, late Monday that warned Congress against
passing an energy bill that takes away incentives for oil companies.

"This morning we woke up to reports of another new record high oil prices
-- $88/barrel and climbing," Markey said. "At the same time, the Bush
administration sent a letter to Congress yesterday complaining that the
pending energy bill might hurt the oil companies. The administration's
complaints could not be more misplaced or more poorly timed."

Markey and the other Democrats said the bill, including provisions that
take away $15.3 billion in tax incentives from the oil industry and direct
most of the funds to pay for new incentives to promote alternative and
renewable technology and production, is necessary to reduce dependence on
foreign oil.

Hubbard's letter to House Speaker Nancy Pelosi said the White House wants
an energy bill, but it outlined a number of provisions it would not accept.
Included is the so-called NOPEC legislation, which was passed in both the
House and Senate, to allow member countries of OPEC to be sued in US courts
for collusive practices in setting the price or production of petroleum or
petroleum products. Hubbard wrote that the measure would "encourage
retaliation against American businesses abroad" and injure US relations with
other countries.

Hubbard also said inclusion of a "mandatory renewable portfolio
standard," requiring a certain percentage of electricity generated come from
renewable sources, could prompt a presidential veto.

--Cathy Landry, cathy_landry@platts.com

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