House Expects Easy Passage of Energy Bill

By H. JOSEF HEBERT
Associated Press Writer

July 28, 2005, 8:00 AM EDT

WASHINGTON -- House leaders predicted easy passage Thursday of a mammoth energy plan that would offer billions of dollars in tax subsidies to energy companies, help assure the future of nuclear power and on a less grand scale, propose a government program to promote bicycle commuting.

"This is a good bill for America," declared Rep. Joe Barton, R-Texas, chairman of the House-Senate conference that crafted the final legislation.

The House planned to take up the bill Thursday, with action likely by the Senate on Friday as congressional leaders work to respond to a challenge from President Bush to get him a bill before Congress leaves for its five-week August recess.

Energy Secretary Samuel Bodman acknowledged Wednesday there were a few items in the 1,725-page legislation that he didn't like, such as a provision that broadens the security review of China's purchase of a U.S. energy company, a response to the recent bid by a Chinese company for California-based Unocal.

And he said it gives too much money -- more than $3 billion in tax breaks and royalty relief -- to oil and gas companies "that don't need incentives with oil and gas prices being what they are today."

Nevertheless, Bodman emphasized, "the president is extremely enthusiastic about this bill in its totality."

Supporters of the legislation acknowledged that it would not force down energy prices, particularly gasoline costs at the pump, nor eliminate the nation's reliance on foreign oil, much of it from volatile areas such as the Middle East.

"We're going to have imported oil in our economy for a long time," Barton, a former petroleum engineer, told reporters, responding to criticism by some Democrats that the bill, despite its expansive reach, does virtually nothing to curtail growing U.S. oil demand.

"We have yet, as a Congress, to take the politically difficult steps needed to reduce our reliance on foreign oil, improve vehicle fuel efficiency or deal with global warming," said Sen. Jeff Bingaman of New Mexico, the top Democrat on the Senate Energy and Natural Resources Committee.

Still, he added, on balance the bill "improves our energy policy and deserves to be enacted." He said he would vote for it although the House conferees rejected one of his priorities -- a requirement that utilities use more renewable fuels such as wind, solar and biomass to produce electricity.

Sen. Pete Domenici, R-N.M., the chief Senate negotiator on the bill, said it provides $4.1 billion in incentives to encourage production of renewable energies, much of it to extend a tax credit for wind energy.

The legislation's tax breaks affect virtually every energy industry: $2.7 billion for oil and gas, $3.1 billion for electric utilities, $2.9 billion for the coal industry.

Barton noted the tax breaks are spread over 10 years and most are earmarked for helping industry extract oil and gas from hard-to-get places such as extremely deep areas of the Gulf of Mexico.

A huge beneficiary is the nuclear industry, which under the bill gets loan guarantees for new power reactors as well as "risk insurance" of up to $500 million for the first two reactors and $250 million for the next four in case problems arise in permitting or regulatory approval.

The bill also calls for a monthlong extension of daylight-saving time to save energy and a tax credit for those who buy gas-electric hybrid cars.

And tucked away deep in the legislation is an authorization for $10 million to promote riding bicycles to work as a way to save energy. It would still be subject to Congress actually appropriating the money.

A cornerstone of the bill, with wide bipartisan support, is a provision that would double the use of corn-based ethanol in gasoline and also spur research into developing ethanol from sources other than corn.

"For the first time the cost of the conservation and efficiency tax incentives ($1.3 billion) exceed the incentives for domestic oil production," argued Domenici.

But the government subsidies for energy industries, including oil companies, have prompted criticism from some lawmakers and from outside groups.

"The bill is larded with subsidies, tax preferences and miscellaneous handouts to an energy industry that with prices this high are in no need of taxpayer assistance," said Jerry Taylor, director of natural resource studies at the Cato Institute, a think tank that focuses on free-market policies.
Copyright © 2005, The Associated Press

$10 million to promote bike commuting? That's sweet! I'm going to apply for a grant for a Seven to commute to work. Then some extra for panniers, fenders, etc.

Cliff Notes?

Now imagine what could be done with 2 billion dollars earmarked for alternative energy, like solar, wind, geothermal and tidal. There are billions of watts of free, inexhaustible energy waiting to be tapped. Cover our landfills and biohazardous wastelands with solar panels. Use those thousands of acres of uninhabited desert to generate free electricity. Find the windiest places in the country and fill them with wind-powered generators.

Those cruddy oil companies don't need a cent of our money. They're just shovelling money into a drying well. Oil has had its day. Invest in the future people, not the past!

(And don't even get me started on the billions wasted on the Iraq war, which as far as I'm concerned is all about the oil. Do you know how many solar farms you could build for 400 billion? It boggles the mind!)

I'm glad the energy companies are finally getting some government help. I have been worried about them going broke.
Now that gas prices are approaching $3/gallon, I know we would all hate to see these companies have to pay taxes on the price gauging profits. ****ing bastard congress

i especially love those coal companies getting cash to burn that nasty polluting crap... that should make our commuiting air nice!

that energy policy is a freakin joke....

seriously work on cutting all dependence on foreign oil so we can stop supporting the terrorists, that might be a good start! but then we can't fight a war on terror....

i bet we commuters never see a penny of the ten mill.... all those energy companies will probably see some $$$ though cause they paid bush's way into office.

Beat me to it. Signing up for a grant writing class ASAP. I'd go to Don Walker, custom builder and fellow Texan. Chris King headset, SS rear hub.......... drool....droool......

Would not be surprised if that money gets actually squandered into $5000 bike racks made our of paper mache.

Clean renewable power is a wonderful goal for us to have. Solar power is not a good way to go about it though. As it stands, simply making the panels is a dirty process that (surprise) takes a lot of power. Solar is good for getting power to remote sunny off-grid locations and not much else. Also, why are you so keen to fill the SW with solar farms? The desert is a unique ecosystem as much as the mountains or ocean. Is it fine to spoil the desert just because you like it less?

Wind is a bit better, but not without some major difficulties to overcome. Lets say you own a huge plot of land in the Eastern Columbia River Gorge. It is quite windy there, you are an environmentally minded individual, so you fill your property with 60 MW of wind turbines (at full capacity). How are you going to feed this power back into the grid? It sure isn't going to happen through your residential service to the property. In fact, it's not going to happen without some high voltage towers, and those aren't cheap. Capacity over these lines scales pretty well with the cost, so 60 MW transmission capability costs something approaching 3x as much as 20 MW capacity (though not entirely, obviously some of the initial construction costs carry over). Now realize that you are not even going to generate that 60 MW most of the time, and that 20 MW is a more reasonable number due to varying wind speed. maintenance, etc. You still have to pay for 60 MW of transmission capability though, or else you burn everything out when everything is running at full speed. So who is going to pay for the lines? Are you going to? The cost is negligible for a fission or coal plant generating 2GW of power to sell on the open market, but it sure isn't negligible when you have 20 MW to sell.

Geothermal potantial exists on such a small scale as to be irrelevant. Tidal I admit I know a lot less about, and maybe its a great thing waiting to happen. The point is, everything isn't quite so simple as we often want to think.

All these renewable forms of energy take resources, energy and money to get running. But so do oil platforms! First you have to spend millions looking for a big enough oil reserve, then you have to spend more millions to build and maintain an oil platform. And, since we've tapped all the "easy" spots, we have to go to more remote, hostile and deep sites. These platforms will cost even more than the ones that have been built in the past. It will cost more money to ship the oil from these locations to a refinery.

And then there's the refining process itself. It's not like you can dump crude oil in your car and go. No, you have to spend money building a refinery and spend money to run it, just to get a useful product out of your crude. Then you have to ship THAT fuel around the country so that it can be used by consumers.

On top of building oil drilling platforms, shipping barges, refineries and power plants (and the associated money to run them), you also have to pay the thousands of people to run them.

Now, compare this to renewable energy. We'll use a solar farm as an example. The raw materials are mined and manufactured to build them, the same as an oil platform. The solar cells are then shipped to the site and installed, same as an oil platform. Only in this case, you don't have to muck around trying to build and install something on the open water. The solar cells are connected to the grid using traditional power lines and BOOM you have useable power. Now let's look at oil, they have just extracted the crude. They still have to ship it back to land, refine it, and ship the fuel around the country. Solar WINS.

Oh yeah, and then there's all the waste sludge from the refining process that needs to be disposed, let's not forget about that.

Now, naysayers may claim that solar power isn't very efficient. Well, they can get 20% of the sun's energy right now. But imagine what 2 billion in R&D could produce! I bet we could get to 50% in 10 years. Those dollars could also make the manufacturing process a cleaner, more efficient system. Also note that photovoltaic cells aren't the only way of collecting solar energy. A few acres of mirrors can be used to focus the sun's rays on a single point, which (obviously) heats up, boils a fluid, and turns a generator.

Now, about the space issue. I agree that deserts are a unique ecosystem and should be preserved. But guess what? Every day urban sprawl eats up viable farmland, which most people would agree is far more useful than some stretch of dry, dusty desert. Solar farms won't have a very big impact, after all it's just a bunch of flat panels mounted on pedestals. They could be spaced far enough apart to allow the sun to bake the ground, don't worry. And they won't release toxins into the ground water, they won't dump nasty gases into the air, they won't even produce light, heat or sound.

Now, about wind power. There are power transmission lines stretching across the country. It's not like you'd have to build hundreds of miles of power lines, you'd just have to bring them to the closest set of high-tension wires and set up a relay station. Shall we compare this to oil again? I think you get the point.

Lastly a bit on nuclear power... This is a technology that is still viable IMO. More research needs to be done into fusion, and disposing of the byproducts of fission. At present, I feel it is just a bit better than those nasty coal power plants.

we'd be better off getting away frmo the whole grid concept. as long as we keep trying to tie every house and business together and feed one source of energy to them we'll be stuck with giant power plants. a better system would involve individual homes/buildings using the apropriate power for their area/need, whether that be solar, wind, tidal, geothermal...

but as long as most people want cars all of this is for naught

Ah, but this is not a good system for people who don't have a steady source of natural energy. Take most of Canada for example, we get lots of sun in the summer, but in the winter it's crazy cold. Not so good for solar in the winter! A grid system is needed to bring power to areas that can't generate as much as others.

What the grids need however, is redundancy. A single breakdown of one substation or plant should not shut down the whole network in some crazy cascade (like the August blackout... remember that?) A smart grid could shift power from all parts of the country (or at least surrounding states) to areas that need more. And, smaller power generators (like a solar farm) could be tied into the grid to supply power to a large area.