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Dems Go it Alone on Comprehensive Energy Reform

October 11, 2007 - by Donny Shaw

After many months of stalled negotiations, Congress’s chief energy reform proposal may soon lurch forward another step towards becoming law. The bill has been a slow mover. The House approved it first in January, and six months later, the Senate passed a much-amended version. Now, four months after the Senate finished working on it, the bill is about to be the subject of informal meetings designed to iron out the differences between the two versions to produce a single compromised version to be voted on one more time by the separate chambers.

Speaker of the House Nancy Pelosi (D-CA) announced today at her weekly news conference that she will bypass negotiations with Republicans and initiate an informal conference of Democratic congressional leaders.

Usually, when the Senate and House pass differing versions of a bill, an official, bipartisan conference committee is created to handle the negotiations towards compromising. But, according to House Democrats, Republican Senators are preventing this normal course of events from taking place. “The decision of the GOP in the Senate to block efforts to go to conference on the energy bill has forced Democrats to take a different path,” said Edward Markey (D-MA). Republicans have blocked several other bills from going to formal conference negotiations in this session of Congress, almost all of which ended up being voted on favorably by both chambers after Democrats informally negotiated their own compromises.

Likewise, the informal talks surrounding the energy bill will likely produce a passable proposal. In fact, according to The Washington Post, “some lobbyists said informal talks might make it easier for Pelosi and Senate Majority Leader Harry M. Reid (D-NV) to iron out differences among House Democrats themselves over key matters such as automobile fuel efficiency and mandates for the use of ethanol and renewable sources of electricity.”

The original version passed by the House focused on recovering lost revenues due to a flaw in oil company contracts and other tax provisions that amount to the most lucrative incentives in the world for oil companies. When the Senate took up the bill, they amended it to increase the fuel efficiency standards for all cars and light trucks from 25 mpg to 35 mpg by 2020, require utilities to generate 15 percent of their electricity from renewable sources by 2020, mandate the 36 billion gallons of ethanol are used by 2022, include anti-gasoline price gouging language, and enact tougher efficiency standards for appliances and federal buildings.

According to Sen. Richard Durbin (D-IL) Senate Republicans have been blocking a conference committee because they are opposed to the oil industry tax increases that would result from the original House bill. While there are ideological and practical arguments that Republicans have made for keeping taxes low on oil company — that oil companies that drill in the U.S. must expend more in exploration than those that drill in other areas of the world, for example — the campaign contribution trends of the oil and gas industry are slanted enough to make one skeptical. The oil and gas industry has been giving a larger and larger percentage of their contributions to Republicans, topping out at 82 percent in 2006, the most recent data set available. Below is a chart from that illustrates the trend:

When the bill passed the Senate, the ethanol provision helped find the rural Republican support it needed. If Senate Republicans can keep the bill from actually taking effect, they’ll be able to claim two political victories: one vote for their ethanol-growing constituents and another for the oil industry, their campaign funders.

And if they can’t block it, the White House will likely take care of things for them. President Bush has threatened to veto the bill because as it stands, he says, it does not have enough incentives for domestic energy production. Expect Democrat negotiators to come up with a compromised version of their original oil industry tax provision. Because, as Pelosi reminded us today, passing energy legislation is “a top priority.”

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