2004 Energy Bill

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energy bill 2003 tauzin, delay domenici, ethanol, mod gop got anwr out in return for new power plants and hummer 100K tax break, protected delay biggest donor lyondell chem from mtbe suits and keep on mkt max p 113 "oinking mastodon"   heritage and cato! did not pass, big defeat b2, but redone next yr str t ignor

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<a href="http://www.govtrack.us/congress/bill.xpd?bill=h108-4503">http://www.govtrack.us/congress/bill.xpd?bill=h108-4503</a>

<h1>H.R. 4503: Energy Policy Act of 2004</h1>

108th Congress: 2003-2004

To enhance energy conservation and research and development, to provide for security and diversity in the energy supply for the American people, and for other purposes.

<div>

Sponsor: <a href="http://www.govtrack.us/congress/person.xpd?id=400018">Rep. Joe Barton [R-TX6]</a>

</div>

This bill never became law. This bill was proposed in a previous session of Congress. Sessions of Congress last two years, and at the end of each session all proposed bills and resolutions that haven't passed are cleared from the books. Members often reintroduce bills that did not come up for debate under a new number in the next session.

<h1>Energy bill a special-interests triumph</h1>

By <a href="http://search.boston.com/local/Search.do?s.sm.query=Susan+Milligan&camp=localsearch:on:byline:art">Susan Milligan</a> Globe Staff / October 4, 2004

<a href="http://www.boston.com/news/nation/articles/2004/10/04/energy_bill_a_special_inte%5C" target="blank">http://www.boston.com/news/nation/ar...special_inte</a>

rests_triumph/

Energy bill a special-interests triumph

By Susan Milligan, Globe Staff | October 4, 2004

Second of three parts

WASHINGTON -- Robert Congel has grand plans and a heady vision for his

upstate New York shopping complex. Billed as the biggest mall in the

world, the yet-to-be-built DestiNY USA would be filled with 400

retailers, thousands of hotel rooms, a 65-acre glass-enclosed indoor

park, a rock- and ice-climbing wall, and a theater suitable for

Broadway shows.

And if its patrons in Congress get their way, the mega-mall would be

partially funded through the federal energy bill, which would provide

$100 million in public money. A fervent lobbying campaign by Congel

paid dividends on Capitol Hill. When members of the House voted last

winter to ramp up domestic oil production, they also voted to help

Congel build the giant mall through tax-exempt " greenbonds. "

The greenbonds initiative -- so named because the developments it

funds are supposed to be energy efficient -- was among scores of items

stuck into the energy bill by lawmakers meeting behind closed doors.

These provisions had no official sponsors and weren't part of the

original documents approved by the House and Senate, but were added

later by unseen hands as the 816-page bill was crafted in a secret

conference.

Intended to lay out an energy policy for the nation for the first time

in more than a decade, the energy bill became a cash bonanza for

corporate interests in and out of the energy arena. The bill, which is

stalled because of a Senate filibuster but which is still one of

President Bush's top legislative priorities, features initiatives to

encourage production of new and existing energy sources. But it has

also become a phonebook-sized symbol of modern Washington lawmaking,

in which policy is driven by those who have money, power, and access

to a relatively small group of decision-makers.

A Globe analysis of tens of thousands of pages of lobbying records

shows that entities with a stated interest in energy policy spent

$387,830,286 lobbying Washington last year. They also paid tens of

millions of dollars in campaign contributions to officials putting

together the package at the White House and on Capitol Hill.

The Globe analysis shows that the corporations and others, including

some universities, were rewarded in the bill with tax breaks,

construction projects, and easements of regulations that would save

them much more than they spent making their arguments to the government.

In some instances, the beneficiaries were specific companies like Home

Depot, which spent $240,000 lobbying in hopes of gaining tens of

millions in savings. Home Depot -- whose PAC contributed the maximum

$5,000 to Bush's 2004 campaign and whose employees have contributed

$226,400 to Bush and the Republican National Committee this cycle --

benefits from a two-paragraph section in the bill to eliminate tariffs

on Chinese ceiling fans. The change would save Home Depot and other

companies a total of $48 million, according to the bipartisan Joint

Committee on Taxation.

Page 2 of 9 -- In other instances, entire industries spent tens of

millions of dollars to leverage billions in government funding and

deregulation.

The nuclear industry, which spent some $71,405,955 lobbying Capitol

Hill, would get $7.37 billion in tax breaks and projects, including

federal funds to construct a $1 billion nuclear plant in Idaho. The

plant, which would be the first nuclear plant commissioned in decades,

would also benefit the hydrogen fuels industry, because the nuclear

facility is intended to create hydrogen fuels.

Several large power companies, which spent tens of millions lobbying,

won a historic deregulation of their industry that would strip away

controls dating from the Depression on how they spend their money and

allow them to become conglomerates -- with little recourse for

ratepayers if the companies' speculative investments go sour.

Bush's biggest supporters would profit handsomely from the bill. Sixty

of Bush's 400 Pioneers and Rangers -- those who have committed to

raising at least $100,000 and $200,000, respectively, for the

Bush-Cheney reelection effort -- would benefit from the tax breaks,

subsidies, and deregulation in the bill, according to an estimate by

the Sierra Club.

Massey Energy of West Virginia -- whose director, James H. " Buck "

Harless, is a major Bush fund-raiser --would get hundreds of millions

of dollars in loan guarantees for a coal gasification plant. Harless

served on President Bush's energy transition team, a precursor to Vice

President Dick Cheney's Energy Task Force, which developed the

critical blueprint for the energy package on Capitol Hill.

" The problem is that this has just turned into more of a special

interests bill, " said Charlie Coon, an energy specialist with the

Heritage Foundation, a conservative think tank. " The bottom line is,

it's not going to provide the power that's needed for the economy so

people can turn on their lights. It's such a farce. "

Behind closed doors

The construction of the bill reflects the way business is done in

Washington in 2004: With Republicans enjoying control of both chambers

of Congress, plus the White House, GOP leaders in the House craft

giant bills behind closed doors, freezing out the minority party and

squelching dissent from moderate Republicans and lobbyists whose

agendas are unsympathetic to the GOP's goals, according to interviews

with members of both parties and former House members.

And while other bills have included their share of earmarked projects

or handouts to various industries or interest groups, the energy bill

is considered by consumer and environmental groups to be one of the

most extreme examples of excessive corporate giveaways.

" What's really amazing is how a combination of energy industry, oil

and gas industry, utility industry guys, coal industry guys, through a

whole host of policy decisions -- through the Environmental Protection

Agency or the energy bill -- literally got billions of dollars in

payback for millions of dollars " in contributions and lobbying

expenses, said Mark Longabaugh, senior vice president for

publicaffairs for the League of ConservationVoters.

Page 3 of 9 -- The bill first began to come together as an outgrowth

of Cheney's energy task force, a committee of Washington officials

that met in private to draft a sweeping national energy policy shortly

after Bush took office

A study by the nonpartisan General Accounting Office last year found

that the energy task force received advice from private " energy

stakeholders, " mainly the petroleum, coal, nuclear, natural gas, and

electricity industries. The report said it was unable to determine the

extent of the influence these industries had on policy, because of the

limited information made available to the GAO.

But other records released under a court order show that 15

energy-related entities known to have had contact with the task force

ended up winning provisions in the energy policy that would benefit them.

The Edison Electric Institute, which had contact with the task force

14 times and spent $12 million lobbying Washington last year, secured

a historic deregulation of the electricity industry analysts believe

could be worth billions of dollars.

The Nuclear Energy Institute, which won billions in tax credits and

projects, had 19 contacts with the task force and dumped $1,280,000

into lobbying efforts in 2003. The nuclear industry also would benefit

from an extension and expansion in the energy bill of the Price

Anderson Act, which caps the financial liability nuclear power plant

owners face in case of a nuclear accident. While no new nuclear power

plant has been commissioned in decades, the bill envisions a rebirth

of the controversial power source.

Southern Company, an electricity company that spent $990,000 on

lobbying, would benefit from relaxed regulations on emissions of

mercury, a toxin released from power plants. Southern's executive vice

president and a paid lobbyist met with the task force, according to

records released pursuant to a lawsuit filed by the Natural Resources

Defense Council. The Environmental Protection Agency, which is set to

issue final rules next year, estimated that the deregulation of

mercury rules would save US power plants a total of $2.7 billion.

Members of the American Petroleum Institute, which had contact with

the task force six times and spent $3,140,000 lobbying last year,

would be eligible for billions in tax breaks and subsidies to

encourage domestic oil production.

Environmentalists, who were shut out of the task force, won little in

the final package after spending a small fraction of what the energy

industry spent on lobbying. The League of Conservation Voters, for

example, spent just $46,516 on lobbying last year; the Natural

Resources Defense Council spent $920,000, and the Union of Concerned

Scientists $150,000, according to an analysis of lobbying reports.

Industries that had contact with Cheney's task force had a critical

advantage, said Larry Noble, an analyst for the Center for Responsive

Politics, because they were able to plead their cases in the early

stages of the development of the energy policy. Continued...

<a href="http://www.boston.com/news/nation/articles/2004/10/04/energy_bill_a_special_inte%5C" target="blank">http://www.boston.com/news/nation/ar...special_inte</a>

rests_triumph?pg=4

Page 4 of 9 -- " They have gotten what they wanted from the first day, "

Noble said. " What all lobbyists know is that it's important to be

there when the policy is being drafted, before the laws are being

written. By the time the bill's written, it's a little late. You're

playing a defensive game. "

The conference committee

After Cheney's task force issued its recommendations, the job of

drafting the bill went to House and Senate committees, where members

of the Republican majority kept many of the proposals intact. Then, in

hopes of forging an agreement between the House and Senate,

congressional leaders appointed members to a conference committee.

But the conference committee began adding projects that had never

appeared in either version of the bill. And lobbyists peppered members

of the committee with requests to get favored projects, including

Congel's mall, appended to the legislation.

The addition of projects like Congel's especially irks

government-waste watchdogs. Even though DestiNY USA had promised to be

a model of energy efficiency, critics wonder what a shopping mall has

to do with forging a national energy policy.

The greenbonds initiative wasn't part of the original House or Senate

bills that went through public hearings and floor debate. It was added

by the conference committee, a panel that excluded Democrats for all

but two of the meetings held to craft the bill. The final, massive

bill was released on a Saturday, giving House Democrats and any

Republicans not made privy to the negotiations barely three days to

study it before being asked to vote on it on the House floor.

Representative Edward Markey, a Malden Democrat who is a veteran

member of the Energy and Commerce Committee, said he was forced to

follow developments in his own committee's bill by talking to

Washington lobbyists.

" We could not keep track of what was going on, " Markey said. " All we

had were leaks. What they did on this energy bill was unprecedented.

It was disrespectful of the Democrats, but more importantly of the

environmental and consumer groups of the country. "

Congel himself is a successful, if controversial, developer who Forbes

magazine estimates is worth some $700 million. Congel and his company,

Pyramid Management, were sued by dissident partners in 2000 for fraud;

the case is still pending. Pyramid ultimately paid more than $800,000

back to a tenant company, The Limited, which claimed the developer had

overcharged it by submitting phony tax bills. State and federal

prosecutors took no action against the company.

Congel and DestiNY USA failed to respond to repeated requests for comment.

Three other shopping mall projects -- one in Georgia, one in Louisiana

(home of the former chairman of the House Energy and Commerce

Committee, Republican Representative Billy Tauzin), and one in

Colorado -- would also benefit from the greenbonds proposal, although

it takes some sleuthing to figure that out from the language in the

bill.

Page 5 of 9 -- Called the " brownfields demonstration program for

qualified green building and sustainable design projects, " the

greenbonds section in the bill makes no mention of the specific

projects or states. But the guidelines conform to no other projects,

according to both congressmen and watchdog groups who have studied the

bill.

" They weren't named, but everyone knew who they were, based on the

language, " said Keith Ashdown, vice president for policy at Taxpayers

for Common Sense. A Republican senator joked that the bill might as

well have required that one of the projects be located in a venue

" whose nickname is the 'Cajun State,' " to underscore that one of the

projects would be in Shreveport.

Congel has been an aggressive advocate for government financing of his

project. He set up a political action committee, the Green Worlds

Coalition Fund, which has raised $82,897, much of which has been

contributed to Bush's campaign and the campaigns of congressmen key to

the energy bill. In addition, Congel, his family, and employees of

DestiNY USA and Pyramid contributed an additional $69,084 to

congressional campaigns and to Bush, according to filings analyzed by

the nonpartisan Center for Responsive Politics.

The project's proponents also have made a big investment in lobbying,

spending $140,000 last year and $60,000 this year to convince Congress

-- which already gave DestiNY USA $1.7 million last year for

construction around the development site -- to approve the greenbonds

proposal.

Meanwhile, Congel labored to help key lawmakers. Congel, his family,

and business associates gave heavily to Representative Bob Beauprez, a

Colorado freshman who also wants financing assistance for a

development project in his district. Congel also hosted a fund-raiser

attended by Cheney.

While most of Congel's and DestiNY USA's campaign contributions went

to Republicans, the project's advocates have also looked out for New

York's Democratic senators, Hillary Rodham Clinton and Charles

Schumer, both of whom received contributions from the Green Worlds PAC

and from Congel himself.

Schumer, in a seemingly contradictory tactic common in Washington,

fought mightily to get the greenbonds provision included in the energy

bill, even as he was also battling to defeat the entire bill.

" I thought it was a good project, " Schumer said of the $2.2 billion

DestiNY USA, which developers claim will bring more than 100,000

long-term, tourism-related jobs to economically troubled upstate New York.

Schumer said he nonetheless opposed the energy bill because it gave

relief from liability to producers of a gasoline additive that has

poisoned groundwater in New York and other states.

On the House side, Representative James Walsh, a Syracuse Republican,

has been championing the DestiNY project, which would be located in

his district. Walsh, who said he went to high school with Congel,

defended the project as a valuable prototype of how a mall can be

powered with renewable energy such as solar power.

Page 6 of 9 -- And he said the jobs would be important to his district.

" This is the only guy knocking on my door willing to spend $2

billion, " Walsh said.

But congressional waste-watchers and environmentalists wonder why the

federal government should be helping a multimillionaire developer

build a shopping mall and resort.

" It's apparent that the only green Bob Congel has ever been interested

in is the green in his back pocket, " said Chuck Porcari,

communications director of the League of Conservation Voters.

When the energy bill stalled in December, Senator Pete Domenici, the

New Mexico Republican who heads the Senate Energy and Natural

Resources Committee, pared it down to make it more palatable to an

unconvinced Senate. A newer version, which has not officially replaced

the original bill, does not include the greenbonds provision.

But with Schumer's help, DestiNY USA may get another shot at the

federal money pie. Schumer and Senator Zell Miller, a Democrat whose

home state of Georgia is also vying for a greenbonds project,

introduced an amendment to add the projects onto a corporate tax bill

with a higher likelihood of gaining congressional approval. A

conference committee will begin writing that bill today.

" It's like multiple warheads: Let's try the energy bill, let's try the

transportation bill, let's try the appropriations bill. If we fire all

these warheads, we'll be able to hit something, " said David Williams

of the nonpartisan Coalition Against Government Waste.

Fattening the bill

Congel's project wasn't the only one to find a new vehicle for

funding, despite the hold-up of the entire bill.

Senator Charles Grassley, an Iowa Republican who heads the Senate

Finance Committee, and whose support for the energy bill was critical

because of its tax provisions, wanted $50 million for a simulated rain

forest in his corn-country state. Supporters said the project would be

educational, but it was deleted before the energy bill went to the

House floor.

But Grassley got what he wanted in January, when the project was

slipped onto an omnibus spending bill meant to fund federal agency

operations for 2004. " Most egregious projects, if they are backed by a

powerful politician, have nine lives, " Ashdown said.

Backers of the energy bill acknowledged that it was fattened with

local projects, but said such inclusions were often needed to cobble

together a voting coalition. " That's a function of the legislative

process, " said Frank Maisano, an energy industry lobbyist with the

firm of Brace and Patterson.

And the battle over the energy package surely has a philosophical

dimension. Those who support it argue that the nation must produce

more of its own energy to wean the country from reliance on foreign

oil. Companies must be offered tax credits and subsidies to encourage

that production, say industry officials and some lawmakers and

analysts, because energy exploration and development are pricey

undertakings. Continued...

<a href="http://www.boston.com/news/nation/articles/2004/10/04/energy_bill_a_special_inte%5C" target="blank">http://www.boston.com/news/nation/ar...special_inte</a>

rests_triumph?pg=7

Page 7 of 9 -- While environmentalists like to demonize the profitable

oil industry, Maisano said, oil companies need financial incentives to

search for reserves in untested areas. For example, some potential oil

reserves are more expensive to get at, because they are deep in the

earth; without a tax break, most companies wouldn't take the financial

risk of drilling there, he said.

But critics, who include many fiscally conservative Republicans along

with Democrats, insist that the tax breaks got out of hand during all

the closed-door meetings, with many benefiting interests as narrow as

individual companies. When the original version of the bill was

finished, it had an estimated $20 billion in tax credits and subsidies

to the energy industry.

But analysts believe the biggest financial windfall for the industry

is in the deregulation provisions, which energy companies spent

hundreds of millions of dollars to secure.

First on the to-do list was the elimination of a longtime regulation

called the Public Utility Holding Company Act. Little known outside

the energy and financial world, the regulation is a critical issue for

the electrical industry, whose vast team of lobbyists persuaded

negotiators in Congress to eradicate the law. In the hundreds of

lobbying reports filed by those seeking to influence the energy bill,

getting rid of electricity industry regulations shows up 98 times.

Electricity interests spent millions of dollars trying to kill the

law. The Edison Electric Institute, which represents the electricity

industry, spent $12,540,000 on a team of 35 lobbyists at its own shop

and at 12 other firms to lobby Congress, the White House, and federal

agencies against PUHCA and on other energy matters. Individual

electricity companies and others against the landmark regulatory law

dumped another $56,420,670 million on lobbying last year, according to

reports filed with the clerks of the House and the Senate.

Nor has the industry been stingy in handing out campaign

contributions. Electricity industry PACs and executives gave a total

of $7,733,941 for the 2004 election cycle, making the industry the

19th biggest contributor, according to the Center for Responsive

Politics. Tauzin, the powerful former chairman of the House Energy and

Commerce Committee, was especially enriched, receiving more than

$150,000 in campaign funds from the energy industry as a whole,

including nearly $76,000 from the electricity sector, according to the

center.

The effort was successful: Language killing the watershed regulatory

law is included in all versions of the energy bill now on Capitol

Hill. If the measure becomes law, both supporters and critics

anticipate an explosion in energy investments.

But where financiers see investment opportunities, consumer advocates

see future Enrons in the making, because the law was intended to

insulate utilities from the kind of energy-trading schemes that caused

the Houston-based Enron to collapse in the greatest bankruptcy in

history. Get rid of the rules restricting cross-investment by utility

holding companies, consumer advocates say, and the country faces an

energy and stock market debacle much like the one that led to the

creation of the public utilities act.

Page 8 of 9 -- The law's roots go all the way back to the Great

Depression and the stock market crash of 1929. The then-nascent

electricity industry was largely owned by a small group of holding

companies, which used their reliable receipts from selling electricity

to invest in riskier ventures.

When those ventures faltered, the holding companies imploded, and 53

electricity companies went bankrupt; the collapse helped deepen the

Great Depression. Consolidation in the industry also allowed holding

companies to manipulate the market and overcharge consumers for power.

After an investigation and hearings, Congress approved the PUHCA

regulations in 1935, imposing historic controls on energy holding

companies. Now, however, energy industry spokesmen say the law is

outdated and so onerous that investors are discouraged from putting

money into electricity.

" This is a fairly capital-intensive business. The repeal of PUHCA

would serve to potentially encourage capital to flow back into the

energy market, " said Pete Sheffield, a spokesman for Duke Energy,

which once employed Andrew Lundquist, the director of Cheney's energy

task force, to lobby for the elimination of the law.

The Clinton and Bush administrations have already weakened the

regulations by allowing companies to be exempt from certain PUHCA

rules. But eliminating the law entirely could have a catastrophic

effect on both the financial markets and consumers, critics say.

" It's the only thing between us and a cartel, " said Lynn Hargis, a

former staff attorney with the Federal Energy Regulatory Commission

who now works for the watchdog group Public Citizen.

Deleting PUHCA from the law books would put an estimated $1 trillion

in energy assets in play, she said, presenting enormous implications

for both the energy sector in particular and the financial markets as

a whole.

Deregulation, she predicted, would allow more episodes like the Enron

scandal, because holding companies could move capital around and put

the health of electricity providers at risk.

Additional deregulation

Lobbyists for energy interests succeeded in getting far more than

financial deregulation, however.

The current bill calls for deregulation of laws protecting air

quality. One provision would ease rules on ozone, which produces smog.

The language, which was not in either the original House or Senate

bill, would not only lower the standards set in the Clean Air Act for

ozone production, but would extend the time industry has to comply

with the rules. The provision, added by the conference committee,

would largely benefit oil refineries.

Language was also inserted in the bill that exempts the oil and gas

exploration industry from sections of the Clean Water Act; under the

bill, such companies would not be penalized for contaminating public

waterways. The provision would give oil and gas construction companies

a " free pass " to avoid clean water laws, making them the only

construction companies not subject to such regulations, said

Representative Bob Filner, a California Democrat.

Page 9 of 9 -- Energy lobbyists also persuaded the Bush administration

to weaken proposed rules on mercury, a toxin released in the air by

coal-fired power plants. The proposed new rules would ease emissions

limits and would give the power plants more time to comply, a

combination environmentalists say will do little to protect people

from mercury contamination in the water and in fish.

The Bush administration's view of the mercury threat is far tamer than

that of its predecessor.

When former President Clinton's EPA issued a December 2000 statement

announcing that reductions in mercury emissions would be required for

the first time ever, the agency described mercury as a " harmful "

substance that " has been associated with both neurological and

developmental damage in humans. The developing fetus is the most

sensitive to mercury's effects, which include damage to nervous system

development. "

But the Bush administration's EPA has taken a more relaxed view,

describing mercury on its website as a " naturally occurring element

that is present throughout the environment. " While mercury exposure

should be " treated seriously, " the site says, " health problems caused

by mercury depend on how much has entered your body, how long you have

been exposed to it, and how your body responds to the mercury. "

The energy interests and their supporters in Congress say the

provisions come down to a matter of philosophy, not lobbying clout;

industry spokesmen say too much regulation puts financial strains on

companies and makes it harder for them to update their operations with

more environmentally sensitive equipment. But those with access to

Congress clearly did well in the package, according to the Globe's

analysis of lobbying records, campaign contributions and the legislation.

On the Hill, legislation as complicated as the energy bill tends to be

written more by staff, who then may turn to people outside government

to help them with legal language, said a Republican senator who asked

not to be named. The specialists tend to be lobbyists, citizen

advocates say, creating a situation where lobbyists have a heightened

influence on lawmaking.

Outside specialists, lobbyists or not, often have expertise that can

be valuable. The trouble, some lobbyists and lawmakers say, is that

the process tends to favor those who already have close connections to

the White House, either by having held a previous job with the

administration or attracting attention by raising money for the

Bush-Cheney campaign.

Energy industry lobbyists say it's not a matter of payback, but simply

a situation where environmentalists are running up against an elected

majority that happens to be unsympathetic to their interests.

Environmentalists, they say, should be more flexible and recognize

they are dealing with an administration that wants to increase energy

production.

" I think the environmental groups have marginalized themselves to the

point where they don't get to have as much of an impact as they

probably should, " because they are so focused on attacking Bush,

Maisano said. " They're not interested in policy. They're interested in

getting the guy. "

Environmental lobbyists, for their part, said they bump up against a

lot of closed doors when they try to lobby on the Hill. When they do

get in to see sympathetic lawmakers, their views end up being

suppressed by a Republican majority that wants to see more exploration

and development of oil, gas, and nuclear power.

" On the House side, it's positively Orwellian, " said Marchant

Wentworth, a lobbyist with the Union of Concerned Scientists.

" Republican members have told me to my face that they're just not

going to confront the chairman on an issue. I've never seen anything

like it. "

This report was prepared with the assistance of Marc Shechtman of the

Globe library and freelance research manager Maud S. Beelman and

researchers Kevin Baron and Samiya Edwards.