Energy Policy: Comprehensive Energy Legislation (H.R. 6) in the 109th Congress

Publication Date: July 2005

Publisher: Library of Congress. Congressional Research Service

Author(s):

Research Area: Energy

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Abstract:

Conferees on H.R. 6, the Energy Policy Act of 2005, agreed on a final bill July 26, 2005 (H.Rept. 109-190). On July 28, the House approved the conference report (275-156). Senate approval (74-26) of the conference report followed the next day, July 29.

Ethanol and MTBE. The House bill included a “safe harbor” provision to protect methyl tertiary-butyl ether (MTBE) refiners from product liability suits, while the Senate bill did not. A proposal was made to establish a trust fund to assist with cleanup in return for immunity from lawsuits, but the proposal drew criticism. No “safe harbor” provision appears in the conference bill. The conference bill would repeal the Clean Air Act requirement for oxygenated gasoline that led to increased use of MTBE, and would require refiners to use renewable fuels (presumably mostly ethanol). The House bill had set a goal of 5 billion gallons per year by 2012 and the Senate bill would have required 8 billion gallons. The conference bill gradually builds the requirement to 7.5 billion gallons by 2012.

ANWR. On April 28, 2005, the House and Senate approved a final budget resolution implicitly calling for the Arctic National Wildlife Refuge (ANWR) to be opened to provide oil and gas leasing revenue. The House bill had included ANWR language, but none appears in the conference bill.

Electricity Restructuring. The conference committee came to an agreement on a large part of the electricity title on July 21, 2005. The title includes provisions on PUHCA repeal, repeal of the mandatory purchase requirement under PURPA, merger review authority for FERC, electric reliability, and siting of transmission lines.

Renewable Energy. The Senate bill included a “renewable portfolio standard” (RPS) requiring utilities to generate at least 10% of their electricity from renewable energy sources by 2020. An RPS is not included in the conference bill.

Climate Change. The Senate bill would have established a credit-based deployment program for technologies to reduce greenhouse gas intensity and establish programs to deploy technologies in developing countries. The House bill had no climate change provisions. The conference bill creates a committee to develop a national climate change strategy.

Tax Provisions. The Administration’s FY2006 budget request called for a limit of $6.7 billion in energy tax credits. The tax incentive provisions of the House-passed H.R. 6 had an estimated cost of $8.1 billion. The Senate tax provisions in H.R. 6 were valued at $14.1 billion over 11 years, and included more incentives for conservation and renewable than the House bill. The conferees agreed to a package that includes $11.5 billion in net energy tax incentives over 11 years.

Outer Continental Shelf. The Senate bill would have required an inventory of oil and natural gas resources on the Outer Continental Shelf (OCS). The House bill did not call for a resource study. The conference bill contains the Senate-mandated inventory.

Siting of LNG Terminals. Provisions to permit the Federal Energy Regulatory Commission (FERC) to decide on the siting of liquefied natural gas terminals have been opposed by some as an override of states’ rights. An effort to eliminate this language from the conference bill was unsuccessful.