Energy Bill Set

On the verge of breaking a four-year stalemate, Congress was poised late last week to approve a sweeping overhaul of the nation's policies. Congressional negotiators cleared the way for final passage by agreeing to an $11.5 billion package of tax credits and incentives to boost domestic supplies of oil and natural gas and promote alternative renewable sources.

"This balanced bill will lower prices for consumers, spur our economy, create hundreds of thousands of jobs, and take unprecedented steps to promote greater conservation and efficiency," said House & Commerce Committee Chairman Joe Barton (R-Texas).

The bill includes a biofuels provision that would almost double the use of ethanol from current levels. A renewable fuels standard requires refiners to blend 4 billion gal of ethanol into gasoline in 2006 and increase that to 7.5 billion gal in 2012.

Lawmakers dropped a controversial House-passed measure that would have shielded manufacturers from lawsuits over water contamination by the gasoline additive methyl tert-butyl ether. Conferees, however, did agree to shift new suits over MTBE contamination from state court to federal court, setting a higher bar for such claims to proceed.

The bill also includes two key measures sought by the chemical industry: a comprehensive inventory of offshore oil and natural gas reserves, including areas now closed to drilling, and explicit authority for the federal government to override state and local objections to the siting of new liquefied natural gas import terminals.

"We are pleased that the conference listened to our arguments and completed a bill that promises to stabilize and reduce natural gas prices over time and give manufacturers a chance to compete in global markets," said American Chemistry Council President Jack N. Gerard.