energy bills 2006

Bills in Brief

With soaring summer gas prices (which later mellowed) putting the spotlight back on energy, Congress got in the political mood for some energy saving action in 2006

Both the Senate and House tossed around new and rehashed ideas for short term fixes and long term solutions to spiking gas prices. But although the House trickled out a steady flow of mini energy bills, the only measure that ended up passing was one opening up 8.3 million acres in the Gulf of Mexico for oil drilling.

Below is a left-over list of actions and bills that didn't get passed in 2006.

See also CJ's Gas Prices Issue Guide for more background.

The Senate announced an "eight point" plan in late April, but quickly recalled it after receiving a poor public reception. Like the House, it now has a few energy bills in the works - some that may get packaged into one bill. Among them:

  • Off shore drilling: The bill most likely to get passed would lift the ban on off shore drilling for 8.3 million acres in the Gulf of Mexico, while still keeping a hands-off buffer zone of 125 miles. States would see 38% of the revenue from royalties. (This is the only measure that ended up being passed into law in 2006.)

  • An inter-state anti-price gouging bill.

  • Tax incentives for alternative fuels and cars that use alternative fuels.

  • A bill that would ease up rules for building - and building out - oil refineries.

The defunct "eight point" plan would have:

  • Given a $100 gas rebate to couples making under $220 thousand and singles making under $145 thousand (NYT), (quickly dropped from the plan)

  • Opened up ANWR, (NYT)

  • Placed a "windfall" tax on oil companies, (NYT)

  • Eased up environmental rules for refineries - and create other incentives to beef up refinery production, (NYT)

  • Done something - it's not clear what - about alleged price gouging, (NYT)

  • Created tax breaks for hybrid cars, (NYT)

  • Dropped the tariff on foreign ethanol,

  • Ended an accounting method for all companies (known as Last In First Out - or LIFO) that normally lets oil companies save as much as $5 billion in taxes, (NYT) (also quickly dropped from the plan), and

  • Given the president power to regulate fuel economy for cars (even though it's not clear he would use that authority or that he doesn't have that authority already). (WP & NYT)

Bi-partisan coalitions in the Senate were also working on a bill that would:

  • require the feds come up with a plan to save 10 million barrels of oil a day by 2031,

  • boost renewable electricity, ethanol, fuel-efficient cars and alternative fuel cars,

  • extend many of the "green" provisions in the 2005 energy bill.

The House considered energy reform in snippets, including bills that: (Congress Daily)

  • Put in stricter enforcement on price gouging (passed the week of May 1),

  • Creat a prize program for innovation in hydrogen technology,

  • Limit boutique fuel requirements,

  • Ease up regulations on refinery production and setting aside military bases to use for future refineries, (passed the week of June 5)

  • Tweak how much goes into to the strategic petroleum reserve,

  • Create incentives for alternative fuels,

  • Open up ANWR, (passed the week of May 22)

  • Drop tariffs on foreign ethanol,

  • Give the administration power to regulate fuel economy for cars (even though it's not clear he would use that authority or that he doesn't have that authority already), (WP & NYT)

  • Create a "strategic refinery reserve" kinda like the "strategic petroleum reserve," using a refinery built by the feds but maintained by private industry,

  • Drop the ban on off-shore oil and gas drilling and give states a cut of the profits. A bill that was okayed by the House in June 26 would open up coastal waters to drilling off the Gulf of Mexico and Alaska 50 miles out, with states having the option to ban drilling from 50-100 miles or approve drilling within 50 miles, (passed the week of June 26). A Senate version went less far, opening up drilling just in the Gulf of Mexico; the Senate version is was ultimately passed into law in December 2006.

  • A $20 million program to build out more ethanol friendly pumps at gas stations.

The Democrats have come out with a few proposals of their own, including (NYT):

  • a plan to cut oil consumption down to 12 million barrels a day by 2020 - from 20 million barrels today,

  • promoting alternative fuels for cars, partly by requiring their use in government cars, and making more service stations have them

  • taking back subsidies for the oil industry, but increasing subsidies for renewable fuels.

Other proposals that have popped up

  • Taking back $2 billion in tax breaks that Congress gave the oil industry in last year's energy bill. (NYT)

  • Making oil companies pay royalties on oil they extract from federal lands (when prices go above $55 a gallon) (NYT).

  • Similarly, taking back royalties exemptions for oil that companies pull up from the Gulf of Mexico. The House passed this provision as part of its Interior budget bill. (NYT)

  • A 60 suspension of the gas tax - which is 18 cents on a gallon of gas and 24 cents on diesel. (NYT)

  • Opening up off-shore drilling.

Some opininions on the recent proposals coming out of Congress

  • Michael Kinsley says it makes sense to tax the oil companies - since their good fortune this year comes from a war that tax payers are paying for.

  • Charles Krauthaumer says gas prices have nothing to do with price gouging: they're simply a matter of supply and demand.

  • Washington Post editors say Bush's proposals to go after price gougers, open up SPR and ease up refinery rules won't help much - but encouraging conservation and alternative energies would. The New York Times editors pretty much agree.

  • The Wall Street Journal votes for more oil production, as does Pete Dupont, also at WSJ.

Updated December 10, 2006

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