Lawmakers Add Fuel to Energy Bill

Spurred by an August blackout that left much of the northeastern United States in the dark, House and Senate lawmakers are hoping to work out the kinks in a comprehensive energy bill by the week's end so President Bush can soon sign energy legislation (search).

But Democrats are threatening a filibuster if the version that's sent for a vote in the Senate allows for drilling in the coastal plain of the Arctic National Wildlife Refuge (search).

"ANWR's probably the only issue that rises to the issue of automatic filibuster," said Bill Wicker, Democratic spokesman for the Senate Committee on Energy and Natural Resources (search). "ANWR is a poison pill in the United States Senate."

The Bush administration wants to open up the land to drilling to reduce U.S. dependence on foreign oil. ANWR is believed to contain 16 billion barrels of crude oil.

Republicans would need 60 votes to quash a filibuster. A March vote on drilling in the Alaska refuge failed 48-50, far from the 60 needed to overcome the procedural block on the bill. Earlier this month, 43 senators voiced their continued opposition to ANWR drilling.

"ANWR will kill the energy bill," Senate Minority Leader Tom Daschle told reporters Tuesday.

Negotiators released a second GOP-drafted discussion draft of the bill on Monday. It mostly replaces the bill passed by the Senate earlier this year.

The bill's top House negotiator, Rep. Bill Tauzin, R-La., said he plans to present a final bill to the conference committee by the end of the week.

The chief Senate negotiator on the energy bill, Sen. Pete Domenici, R-N.M., is confident an acceptable bill will pass muster with the Senate and could be ready for Bush to sign as early as two weeks from now.

"We hope to be able to have a conference by the end of this week, but we're still not sure if that's going to come together," said Marnie Funk, majority spokeswoman for the Senate Committee on Energy and Natural Resources. "We certainly expect comprehensive energy legislation by the end of the year."

Bush earlier this month said he wanted a bill "that will pass both bodies" -- the House and Senate. He said the White House would work with lawmakers to hammer out "contentious" issues such as ANWR drilling. On Tuesday, Bush said getting the bill done will help reduce dependence on foreign sources of energy, which is needed "for economic security and national security."

Domenici has indicated he is willing to drop the ANWR provision if the entire package is threatened. As is, the bill would allow oil development of the 1.5 million-acre coastal plain of ANWR as long as the footprint of development were limited to 2,000 acres.

Comprehensive Bill Includes All Types of Energy

The GOP draft increases money for nuclear research and includes $1.1 billion for making a hydrogen reactor; it provides incentives to manufacture vehicles that run on gasoline or an alternative; ensures fast approval of oil and gas development permits in the Rocky Mountains; and expands the authority of guards at nuclear power plants to use deadly force.

The penalty for acts of nuclear sabotage would be increased from $10,000 to $1 million.

Issues such as the ethanol/MTBE use, electricity transmission and taxes still need to be resolved.

Senators from both parties had supported a ban on MTBE, a petroleum-based gasoline additive that has been found to contaminate drinking water.

"We're very close" to an MBTE compromise, Tauzin said.

But some key House Republicans, including Majority Leader Tom DeLay of Texas, who is not part of the conference, oppose a ban and want MTBE manufacturers to be protected from any lawsuits from the chemical leaking into water supplies.

Infighting about liability protections for MBTE manufacturers has bogged down negotiations as has debate over whether to force power companies to use renewable fuels to make electricity.

Fifty-three senators -- including eight Republicans -- on Monday argued that electric utilities should be required to produce at least 10 percent of their power from solar panels, wind turbines, biomass, geothermal energy and other non-hydro renewable sources.

Electric utilities have lobbied against this so-called "renewable fuels standard," saying it may be hard to comply because of a shortage of renewable energy sources in some regions and the higher costs that would be billed to the customer as a result of the required investment.

The Federal Energy Regulatory Commission's desire to turn over transmission systems to regional organizations that must abide by federal guidelines that ensure equal access has the support of lawmakers in the eight blackout-stricken states who say federal standards are needed to make sure the electricity markets can compete fairly.

But lawmakers in states with stable electricity systems fear that turning over authority to regional groups guided by FERC regulations will drive up costs. FERC has jurisdiction over wholesale electricity markets.

Sen. Richard Shelby, R-Ala., a strong critic of the FERC proposal, wants it delayed for three years. He has been promised that Senate energy negotiators will include in the bill a measure that would keep FERC from moving forward on the new standards and keep participation in regional grid management organizations voluntary.  The Bush administration has said it favors a delay in the rule.

But other electricity measures that have not been included in the bill may be jeopardized by the fight over transmission line access. FERC has also sought "last resort" authority to approve locations for interstate high-voltage lines.

Lawmakers also want to consider a requirement for mandatory reliability standards that would penalize grid operators who let the system break down, financial incentives for building power lines and repeal of a 1935 law that limits the ability of large utility holding companies to invest in non-utility businesses.

Supporters of the repeal argue the new flexibility will make it easier for companies to invest in transmission infrastructure. Opponents worry about consumer protection from possibly questionable mergers and investments.

The energy bill does include some pet projects that may please Democrats dissatisfied with some parts of the bill that are supported by the White House and industry.

For example, the bill allows for a huge expansion of corn-based ethanol in gasoline, which farm-state lawmakers support. It also includes Democratic-suggested guidelines on geothermal and hydropower issues; funding for Indian tribes to develop a Tribal Energy Resource Agreement; and limits on the extension of existing oil and gas leases in Alaska's National Petroleum Reserve to single 10-year terms.

The energy legislation also provides a federal loan guarantee of up to $800 million to help a Minnesota utility build a coal-burning power plant. That could help sway the vote of Sen. Norm Coleman, R-Minn., who opposed ANWR drilling in the past.

Funk said it's Domenici's hope to hammer out differences by Thursday.

The Associated Press contributed to this report.