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Graphic Element, Right Gutter

Just What You Were Hoping For: High Gasoline Prices Generate Lots of Congressional Response

Ready for Off-Coast Drilling? (FYI: Jeb Bush Isn't.)

From Washington Post Reports.

Asked what he hoped to achieve during the current session of Congress, Bob Dinneen, president of the Renewable Fuels Association, had a simple answer: nothing.

U.S. policy regarding ethanol, whose makers his association represents, was just where he wanted it to be. The Energy Policy Act of 2005 had set minimum targets for ethanol use going out to 2012, spurring financing for new ethanol refineries and transportation projects from Iowa to northern New Jersey. All he wanted to do was hold the line.

Now Dinneen is scrambling to hold that line amid a flurry of new congressional proposals and lobbying from his association's business rivals. Just a few months ago, no one predicted another frenzy over energy legislation. For his first four years in office, President Bush had talked in vain about getting energy legislation through Congress. When the 1,724-page bill finally passed last summer, it wasn't everything that energy interest groups wanted -- but most lobbyists figured that was that.

Now, thanks to soaring oil prices, lawmakers feel pressed to act again and the possibilities for new legislation -- or undoing the last one -- seem endless. This time there isn't a single energy bill, but more than a dozen bits of legislation in different committees. Taken together, they could have a major impact on energy policy, including many emotional issues for environmental and consumer groups, and on specific companies and industries.

"There was a lot left on the table after the Energy Policy Act because we didn't have time," said Donna Harman, vice president for congressional affairs at the American Forest and Paper Association, whose members are major energy consumers. But, she said, after the hurricanes in Florida and Louisiana, "energy price spikes brought people's attention back to the issue and we saw the ground shifting."

The new energy proposals aren't limited to the House's and Senate's energy committees; they also appear before the appropriations, science, agriculture and judiciary committees. They include items such as a Senate clause in the Maritime Renewal Act that would give the Massachusetts governor veto power over a wind power project off Cape Cod; a proposal about coal deliveries in the Railroad Competition Act; an end to royalty breaks for offshore oil drilling in deep water; $18 million in prizes in a House science committee measure to reward people who come up with novel ideas for hydrogen vehicle technologies; all the money Bush requested for alternative energy projects, though $130 million less than he wanted for his Global Nuclear Energy Plan; and incentives for the construction of new refineries. The full House next week will also consider a bill that would give Bush clearer authority over setting car mileage standards and direct him to come up with new ones before leaving office.

One of the bigger battles came to a head on Thursday night over just two words in the House version of the Interior Department's appropriations bill. At stake with those two words: an end to the 24-year-old ban on natural gas drilling on the Outer Continental Shelf.

Rep. John E. Peterson (R-Pa.) had deleted the words "natural gas" from the extension of the ban on oil and natural gas drilling, but by a narrow 217-203 margin, the House voted to adopt language sponsored by House Republican Policy Committee Chairman Adam Putnam (R-Fla.) and Rep. Lois Capps (D-Calif.) to cover drilling for natural gas as well as oil.

Many of the nation's largest manufacturers and agricultural groups had lined up in favor of the Peterson language, which they said would help increase domestic natural gas supplies and bring down costs. "The business of chemicals, in addition to energy and power, we use natural gas as a feedstock," said Jack Gerard, president of the American Chemistry Council, which represents the chemical industry.

Gerard and other industry representatives make a point of translating that into language politicians understand: jobs and voters. Gerard blames high natural gas costs for contributing to the loss of 100,000 jobs in recent years. Leon Corzine, chairman of the National Corn Growers Association, said that between fertilizers, drying and irrigation, natural gas could raise costs by $100 an acre or $75,000 for a family farm. "That could be the difference between profit and loss," he said.

On some issues, industry takes opposite sides. In May, Dinneen found himself being grilled by House Energy and Commerce Committee Chairman Joe Barton (R-Tex.) about whether Congress should lift the 54-cent-a-gallon tariff on imported ethanol. Dinneen says that lifting the tariff would have a "chilling effect on the investment community" and hurt the expansion of the domestic ethanol production and refining industry. Other supporters of the tariff say that Brazil doesn't make enough ethanol to export any significant quantities to the United States, and that some can be imported now from Caribbean Basin countries.

But petroleum refiners, as well as consumer groups, say that eliminating the tariff would help lower prices. At the hearing before Barton, Bob Slaughter, head of the National Petrochemical and Refiners Association, said that Dinneen had "painted a picture of an industry that does not need . . . a tariff barrier."

It remains to be seen whether all the bills will match last year's legislation, which had tax breaks for everything from oil drilling to hybrid cars to nuclear plants, and repealed a 70-year-old landmark piece of utility legislation, among other things. And whether this year's efforts will add up to a coherent energy policy is doubtful, but lawmakers are eager to go on record as having tried to do something, and that spells opportunity for many interest groups.

Industry isn't the only type of group weighing in on energy legislation. Pressure from consumers and groups critical of the oil industry's profits also helped generate overwhelming House support on Thursday night for a measure that would pressure oil companies to renegotiate hundreds of leases.

Environmental and consumer groups are also lobbying. "We are elated," Sierra Club's executive director Carl Pope said about the continued moratorium on drilling on the Outer Continental Shelf. "We can look under every rock and every grain of sand in the U.S. and still not be able to drill our way to lower energy prices."