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E-M:/ Dingell and Pelosi on Bush Energy Bill

Enviro-Mich message from "Alex J. Sagady & Associates" <ajs@sagady.com>

Date: Wed, 20 Apr 2005 14:09:31 -0400 (EDT)
From: Tom Manatos <leader@democraticleader.ctsg.com>
To: ajs@sagady.com
Subject: Energy Bill Update
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Today Leader Pelosi and Congressman Dingell sent a letter to the President calling on him to address the rising price of gasoline and not exploit it to pass the Republicans misguided energy bill. Also, see House Democrats talking points on the energy bill.

News From House Democratic Leader Nancy Pelosi
H-204, The Capitol, Washington D.C. 20515
April 20, 2005

Pelosi, Dingell: President Exploiting Gas Prices to Pass Republican Energy Bill

Washington, D.C. -- House Democratic Leader Nancy Pelosi and Congressman John Dingell, the Ranking Member on the Energy and Commerce Committee, wrote a letter to President Bush today calling on him to address the rising price of gasoline and not exploit it to pass the Republicans' misguided energy bill. This afternoon, the President is giving a speech on energy policy at the U.S. Hispanic Chamber of Commerce and the House of Representatives will take up the Republicans' energy bill.

The full text of the letter follows:

April 20, 2005

The President
The White House
Washington, D.C.  20500

Dear Mr. President:

As you know, gasoline prices have risen by an average 38 cents a gallon in the past two months. In fact, 70 percent of the American people have already said that the price at the pump is having an impact on their lives. We understand that the White House is feeling pressure from the American people to act, but misleading the public about the Republican's energy bill is not the answer.

In your weekly radio address last Saturday, you called on Congress to pass the energy bill and implied that the bill would lower costs to consumers. But your Administration's own Department of Energy studied last year's conference report on which this bill is based, and concluded that the Republican proposal would actually raise gas prices by 3 cents per gallon.

The American people deserve an energy policy that would boost the economy, preserve the environment, protect public health, and truly lower gasoline prices. This bill fails on all fronts. The Republican energy bill was written by energy lobbyists for the benefit of the energy industry, while hurting the environment, consumers, and taxpayers.

We encourage you to use your speech to the U.S.-Hispanic Chamber of Commerce to lay out an agenda that seeks to lower gasoline prices, not simply exploit them.


/s/ /s/

Nancy Pelosi John D. Dingell

Democratic Leader Ranking Member, Committee on Energy and Commerce


Based on the pro-industry Cheney Energy Task Force report, this Republican bill is written for big energy companies and is full of special interest provisions. Like similar GOP energy bills passed in recent years by the House, this Republican bill is based on the pro-industry recommendations of the Cheney Energy Task Force report. Like the earlier bills, this bill is anti-taxpayer, anti-environment, and anti-consumer and is loaded down with special-interest giveaways. Indeed, Friends of the Earth has estimated that, between the bill's tax breaks, direct spending, and authorizations, it would provide more than $22 billion to the oil, gas, and other energy industries. In contrast, Democrats stand ready to pass a comprehensive energy bill that brings down gas prices, increases our energy independence, and is worthy of the 21st century.

Unbelievably, at a time of record gas prices, this GOP special-interest energy bill would actually increase gas prices - rather than reduce them. The national average price for gasoline remains at record levels of $2.24 a gallon - more than 50 percent higher than average gas prices in 2002. And yet, according to the Bush Administration's own Energy Department, the Republican bill will actually increase gas prices by 3 cents and will have almost no effect on production, consumption, or prices. (Energy Information Administration, 2/04)

The GOP energy bill is anti-taxpayer by providing 93 percent of its tax incentives to the oil and gas industries and other traditional energy sources, whose profits are soaring. Of the bill's total $8.1 billion in tax incentives, $7.5 billion (or 93 percent) is for traditional energy sources such as oil, natural gas, nuclear power and electricity transmission. The oil and gas industries are getting these massive subsidies from the taxpayer at the same time that their profits have never been higher. At the same time, the bill only includes tax incentives of less than $600 million (or 7 percent) for renewable energy and conservation.

The GOP bill is also anti-taxpayer by providing oil and gas companies massive forgiveness of royalty payments. At a time of record profits for the oil and gas industries, the GOP bill also includes massive royalty breaks for energy companies for production of natural gas, oil and geothermal energy on federal lands. Among these royalty breaks are millions of dollars in royalty holidays for deepwater wells and shallow water/deep wells in the Gulf of Mexico, onshore marginal wells as well as taxpayer-financed kickbacks to industry to pay their costs of environmental compliance.

The GOP bill is full of these tax incentives and subsidies for the oil and gas industry at a time of record profits for oil and gas companies. The Republicans are bringing this bill loaded with goodies for the oil and gas companies at a time they are reporting record profits. As the New York Times has reported, "Altogether, profits in 2004 for the top 10 [oil and gas] companies jumped by more than 30 percent ... The world's 10 biggest oil companies earned more than $100 billion in 2004, a windfall greater than the economic output of Malaysia. Together, their sales are expected to exceed $1 trillion for 2004, which is more than Canada's gross domestic product." (New York Times, 2/12/2005) "Exxon Mobil said ... it earned a record $8.42 billion in the fourth quarter and $25.33 billion for all of 2004." (AP, 1/31/05) "Exxon wasn't the only energy company that outperformed analysts' estimates amid high crude-oil and natural-gas prices. ChevronTexaco Corp. beat analysts' predictions by 16%, and ConocoPhillips surprised the Street by 12%." (Wall Street Journal, 2/7/05)

The GOP energy bill is also anti-taxpayer by shifting the costs of MTBE cleanup from MTBE manufacturers to the American taxpayer. The Republican bill contains several provisions pertaining to the fuel additive MTBE (methyl tertiary butyl ether), a clean-fuel additive produced largely by oil companies that has been found to contaminate groundwater when it leaks from underground storage tanks. The bill completely shields MTBE producers from product liability lawsuits, thereby forcing taxpayers to pick up the tab to clean up contaminated groundwater. The provision is retroactive to September 5, 2003 and would cut off lawsuits filed by several states. The bill even includes a $2 billion taxpayer-financed subsidy to MTBE producers to convert facilities to produce other chemicals. Given the fact that MTBE manufacturers have known for 20 years that their product was contaminating Americans' drinking water, creating a serious public health hazard, these provisions are totally unacceptable.

The GOP energy bill has numerous anti-environment provisions, including opening up the Arctic refuge to oil and gas drilling. The GOP bill has provisions that would open up, for the first time, the pristine coastal plain of the Arctic National Wildlife Refuge (ANWR) to oil and gas drilling. A majority of Americans believe that we should not sacrifice one of our most magnificent places for the sake of, in effect, a thimble-full of oil - six months' supply, 10 years from now. Opening the Arctic Refuge would have no significant effect on our dependence on foreign oil. The Arctic Refuge is one of the last, wild, untouched places left in the United States. Indeed, because of the abundance and variety of its wildlife - including caribou, polar bears, snow geese, 135 species of migratory birds, eagles, wolves, sheep and muskox - the Arctic Refuge has been compared to Africa's Serengeti.

Another of the bill's key anti-environment provisions significantly weakens the Clean Air Act. This provision exempts states from having to clean up their dirty air if some of their pollution comes from other heavily polluted areas. Under this provision, these "downwind" states would not have to meet clean air standards until after the "upwind" areas had been cleaned up. Critics point out that this provision serves as an invitation for local communities that have not met air quality standards to use the extra time to put off reducing emissions from sources inside their own borders.

The GOP energy bill also has numerous other anti-environment provisions. One of the numerous other anti-environment provisions in the bill is a provision providing utilities seeking licenses to build hydroelectric dams with special procedural supremacy and undermining the ability of natural resource agencies to protect fish and wildlife. Secondly, the bill's "refinery revitalization" provisions are also anti-environment. These provisions would turn the Secretary of Energy into an environmental czar. Under the bill, the Secretary of Energy would control the procedures for obtaining state and federal environmental permits for refineries and could override a decision of EPA or state officials denying a permit. This preempts the authority of state officials who are charged with protecting public health. Thirdly, the bill includes an anti-environment provision that eliminates all EPA authority under the Safe Drinking Water Act to protect sources of drinking water from improper and harmful hydraulic fracturing (which involves drilling for oil by injecting pressurized diesel fuel and other fluids deep into the earth) now or in the future.

Finally, the GOP energy bill is also anti-consumer, including the bill's electricity provisions. The GOP provisions on electricity fail to protect American consumers from fraud and abuse. In the GOP provisions, the lessons of the past several years of volatility in electricity markets, which harmed consumers in California and other western states and eroded investor confidence in this critical industry, have been ignored. The Republican provisions would repeal the Public Utility Holding Company Act, a law that protects consumers and investors from corporate abuses. Indeed, the GOP provisions represent a victory for various special interests at the expense of the consumers whom our federal energy laws are supposed to safeguard. Secondly, the GOP bill is also anti-consumer by failing to require FERC to order the refund of unjust and unreasonable electricity rates paid by California consumers in early 2001.

Tom Manatos
Office of the Democratic Leader
Advisor to the Leader

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