Chems, others warn Congress on energy bill

19 October 2007 18:10  [Source: ICIS news]

WASHINGTON (ICIS news)--Chemical producers, other manufacturers and agricultural interests joined energy firms in an appeal to Congress on Friday, urging legislators to reject energy bill provisions they said will decrease US energy production and raise costs.

 

In particular, said Paul Cicio, president of the Industrial Energy Consumers of America (IECA), “provisions of the House energy bill will decrease, not increase, domestic production of natural gas".

 

IECA includes major chemical firms and other industries that have a common denominator in being heavily dependent on natural gas as a feedstock and energy fuel.

 

The 1,000-page energy bill passed by the House earlier this year, HR-3221, mandates a wide variety of energy efficiency, renewable energy and global climate change provisions and funding.

 

To pay for those initiatives, the bill increases permitting fees, taxes and penalties for domestic oil and gas exploration and development and repeals parts of the 2005 Energy Policy Act that gave royalty and tax incentives to energy firms for finding and developing deep-water gas wells in the US Gulf.

 

A group of energy industry trade associations also appealed to Democrat leaders in the House and Senate, saying that while the leadership is promoting legislation for energy efficiency, renewable sources and to combat global warming, continued access to domestic hydrocarbon energy resources must be allowed.

 

“Natural gas must be recognized as an indispensable part of the solution to both the energy policy and climate change challenges faced by our country,” said a letter signed by the American Petroleum Institute, the Natural Gas Supply Association and seven other energy sector groups.

 

“Most experts agree that the US will depend heavily upon natural gas for several decades at least as a ‘bridge’ to reducing emissions and maintaining energy reliability while other energy technologies are developed and deployed,” the group said.

 

“The House legislation professes to focus on energy independence,” the group said, “but if enacted it would adversely affect American natural gas production and infrastructure development, thereby making the supply of this important energy resource even less secure.”

 

The US Senate also passed an energy bill earlier this year; it requires increased fuel economy for automotive engines, mandates a major increase in biofuels consumption and also echoes some of the House bill’s energy efficiency measures.

 

Democrat leaders in the House and Senate are said to be trying to find ways of reconciling major differences between their two energy bills, but they have yet to form a conference committee.  A conference committee, made up of selected representatives and senators, is the standard process for ironing out legislation passed by both chambers.

 

Capitol Hill observers say that prospects are dim for completion of and full congressional approval for a compromise energy package by year end.

By: Joe Kamalick
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