energy bills 2008

what's up

With gas prices surging and clean energy all the rage, energy policy is a once again a hot topic in Congress.

In 2007 lawmakers passed a bill to hike up gas mileage standards, give an extra boost to ethanol production and phase in other efficiency standards. This year Congress has batted around a number of bills to make a dent in prices at the pump, but political grandstanding during an election year has so far doomed any bill from becoming law. That might change in the final weeks of Congress, as the Senate picks up House bill opening up off-shore drilling and boosting investment in alternative fuels.

green tax incentives

The Senate blocked a measure last year that would extend and expand incentives for green energy; the sticking point being that it would've been paid for by rollbacks on tax breaks for big oil.

The House passed a similar bill in February '08 - with the same deal-killer of oil tax hikes. Below is a snapshot of what's in the bill.

Tax credit would include:

  • $6.5 billion to extend tax credits for wind and other renewables for three years;
  • $1 billion for those who buy plug-in hybrids;
  • $1.5 billion in credits for energy efficient homes;
  • $2 billion for green community programs;
  • $2 billion for transportation projects in New York.

They'd be paid for by:

  • $13.5 billion (over 10 years) in rollbacks on tax credits for big oil;
  • $4 billion by switching up how oil companies can claim foreign tax credits.

The Senate is trying out the idea of passing a bill that'd raise green energy tax perks without any accompanying tax hikes for big oil. It's unclear if the House would be willing to back them up.

Strategic Petroleum Reserve

There was one energy issue Dems and Republicans easily agreed on - and which the president knew he couldn't resist - and that was stopping oil from being pumped into the Strategic Petroleum Reserve which, like its name suggests, is a back-up supply of oil to be used in cases of emergency. The government was adding oil to the reserve, but while Congress was handily passing a law in May '08 telling it to cease and desist, the president declared he would stop the flow himself. (WP)

House Dems also tried to force the administration to skim off some oil from the reserve, but that effort failed in July (NYT).

a mixed salad of gas measures

With the onset of spring - which always brings an upswing in gas prices - Congressional leaders started to consider other small-time measures designed to nudge gas prices down (WP), including:

  • taxes on oil companies - not so much to help prices, but rather to take the sting out of the fact that the oil companies are raking in profits (A Senate bill failed to pass in June - WP - while the House rolled back tax breaks for oil as part of a package bill passed in September)
  • making price gouging a federal crime
  • letting the US sue OPEC for playing around with prices
  • tightening regulatory reins on the oil futures market, which some blame in part for inflating gas prices (The House passed as part of a larger package in September. A Senate bill, S 3268, got derailed in July.)
  • forcing companies to "use or lose" federal land leases they already have for drilling oil (A House version, HR 6251 , failed to pass a couple of times.)
  • beefing up support for public transportation (passed in the House - HR 6052)

Drilling at home

Republican leaders responded with their own set of measures to ease gas prices - particularly opening up more drilling off-shore and in the Arctic National Wildlife Refuge - but their efforts were voted down in the Senate in May and continued to be rebuffed in the House. (NYT & WP) The Interior Department estimates that if the offshore drilling ban was lifted, we'd find 18 billion barrels of oil and 76 trillion cubic feet of natural gas. See our ANWR page for estimates there.

The Dems knew they had to do something about off-shore drilling because a moratorium on drilling was set to expire September 30. The House returned from summer break and passed an energy package in
September that included a provision that would open up drilling 100 miles offshore (and 50 miles
off in states that sign on) - in addition to requiring 15% of electricity to come
from alternative fuels and okaying $18 billion in green energy

In the end, congressional Dems dropped their effort to vote on limits to drilling, letting the off-shore ban expire and allowing oil rigs to set up as close as 3 miles from shore (although they may be able to re-institute a ban before any rigs arrive).

Senate leaders were working on an energy package of their own, but may
just pick up the House's bill the week of September 22. A "group of 10"
(growing to 20) moderates in the Senate also are working on a
bipartisan bill which they may offer up after the election, assuming -
as almost everyone does - the Senate won't be able to pass the House
bill. (WP)

See our Gas Prices primer for more on the debate on how to bring down prices.

taking the heat for the needy

The Senate has also floated the idea of a bill to help low-income Americans pay for enery costs. CJ hasn't come across anything more specific than that.

Updated Sept 15, 2008