Air Date: Week of April 26, 2002

After a great deal of debate and deliberation, the Senate finally voted on a comprehensive energy bill. Chris Holly with "The Energy Daily" discusses some of the environmental implications of what ended up in this new bill with host Steve Curwood.

Transcript

CURWOOD: After months of wrangling, the Senate finally approved their version of the first comprehensive energy bill in ten years. And with me now to discuss the legislation is Chris Holly. Chris is a reporter with "The Energy Daily," covering energy issues on Capitol Hill.

The debate over the Arctic National Wildlife Refuge, or ANWR, drew a lot of attention recently. But, there’s a lot more here that concerns the environment. I’m thinking, in particular, of the Corporate Average Fleet Efficiency Standards, or CAFE, that deals with mileage in cars. How have those changed since the original Senate bill?

HOLLY: Well, the auto industry waged a really aggressive and, in some ways, misleading advertising campaign on CAFE to persuade senators to vote against it. And they touted economic impacts on the industry, and impacts on individual drivers by claiming that the proposed legislation, which would boost the fuel economy standard fleet-wide from about 25 miles per gallon to 36 miles per gallon by 2015, would force drivers to get out of their comfortable SUVs and minivans, and into tiny, compact cars.

They lost rather badly, almost by a two-to-one margin. So, it looks very doubtful that we’ll have a strong CAFE provision when a House-Senate Conference Committee concludes its work on the bill later this year.

CURWOOD: Chris, tell me about what happened to renewable energy in the Senate package.

HOLLY: Well, there are two key provisions in the bill. One is a tax provision, and extends an existing program that gives generators of renewable energy a 1.7 cent per kilowatt hour tax credit. And this has been a very useful instrument in helping the fledgling wind industry grab a foothold in the U.S. power market. And, the bill extends that by another two years.

The other thing is a system called a renewable portfolio standard. And what that means is that, by 2020, all retail electricity providers would have to offer at least 10 percent of their product, the power that they sell, from renewable resources. There were four attempts to weaken this bill on the Senate floor. Three failed. The fourth, which happened in the middle of the week, was successful.

And what that did was cut in half the maximum price of the credits that the federal government would sell to energy providers who needed them. Republicans said that this would cut the cost of the provision. And it does, by 50 percent. Environmentalists worry, however, that this will have a perverse impact of making only wind, which is the most cost-effective, and the closest competitor to traditional technology, such as coal and oil, and strand other technologies, like solar, geothermal, and biomass. It remains to be seen what will happen. The measure could be amended further in conference.

CURWOOD: So, we have a bill now from the Senate. Of course, it’s different from what the House had passed. Quickly, what are those differences, in summary?

HOLLY: Well, the House bill includes a provision to open up the ANWR. The Senate bill does not. That’s going to be a major sticking point for the conferees. The other main difference is the tax package. The Senate has $14 billion in various incentives and subsidies to fossil fuel producers and renewable energy producers, as well. And $14 billion seems like a lot. But, it’s nothing compared to what the House did. They approved $33 billion in subsidies.

That has to be brought together. So, the typical strategy is to split the difference. So, we may see about $20-25 billion in subsidies coming out of the House Conference Committee.

CURWOOD: With so much riding here politically on this conference, especially around ANWR, what do you think could happen?

HOLLY: The thing to remember, Steve, that I think is important, is that both the President and the Congress said that their efforts are aimed at improving America’s independence from foreign energy sources. And I’m sad to say that it’s not likely that the bill that emerges from the conference is going to do much about America’s energy independence.

CURWOOD: Chris Holly is a reporter with The Energy Daily. Thanks for speaking with us today, Chris.

HOLLY: Thank you very much, Steve. I enjoyed it.