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House zeroes out oil shale funding, passes energy-water spending bill

A coalition of Democrats and fiscally conservative Republicans joined forces yesterday to squeak through an amendment eliminating funding for oil shale research just before the House passed its version of the fiscal 2013 energy and water development spending bill.

Approval of a Democratic amendment to eliminate $25 million for oil shale research and development came as a surprise to supporters of the practice, who blamed a combination of Democrats worried about the environmental consequences of the energy extraction process and Republicans committed to reducing government spending. The amendment from Reps. Gerry Connolly (D-Va.) and Jared Polis (D-Colo.) passed 208-207, with 60 Republicans lending their support while 35 Democrats voted against it.

The vote on the oil shale measure was the last of more than 60 amendments that lawmakers considered to the $32.1 billion appropriations bill to fund the Department of Energy, the Army Corps of Engineers, the Nuclear Regulatory Commission and other agencies for the next fiscal year, which begins Oct. 1.

The underlying bill passed 255-165, with 48 Democrats in support and 29 Republicans against. It is unlikely to pass muster in its current form with either Senate Democrats or President Obama because of a provision aimed at opening the Yucca Mountain, Nev., nuclear waste facility, cuts to clean energy funding and other controversial measures. The Senate has not set a date to take up its version of the bill, although an aide said yesterday it would not happen until at least July. Most observers predict Congress will eventually adopt a continuing resolution to keep the government running past Election Day before dealing with the full-year spending measures during a lame-duck session.

Lawmakers had voted down the Connolly-Polis oil shale amendment 192-222 earlier in the evening, but Democrats demanded and were granted a revote because Rep. Rush Holt (D-N.J.) had been attempting to cast his ballot when the vote was gaveled to a close, a leadership aide said. Republicans could have requested another revote but did not want to "further abuse" the process, the aide said.

Rep. Cory Gardner (R-Colo.), who voted to maintain the oil shale funding, attributed the amendment's success to confusion created by the revote, which came right before extended debate on a Democratic motion to recommit the appropriations bill to committee. He said members left the floor before the vote and that some who backed it did not fully understand its implications.

Another shale supporter, Rep. Doug Lamborn (R-Colo.), said a combination of anti-spending Republicans "who legitimately want to keep federal activity to as limited sphere as possible" and environmentalist Democrats was able to get the amendment across the finish line.

If the question had been whether to allow oil shale development -- as opposed to whether the government should pay to research it -- he said shale supporters would prevail. That was the situation when Polis tried to remove oil shale-promoting language from an earlier House energy bill (E&E Daily, Feb. 16).

"So if he were to attack oil shale in and of itself, it would not pass," Lamborn said. "Oil shale, we all admit it's unproven, and so there's no evidence that it's environmentally unsound or that it uses unacceptable amounts of water or any of the other concerns because no one has settled on a viable process yet."

Rep. Rob Bishop (R-Utah), who voted against the amendment, predicted the funding would be restored during a House-Senate conference on the appropriations bill, and he said maintaining the DOE research funding was less important to the broader industry than dialing back the Interior Department's plans to limit shale leasing.

Oil shale deposits are found in Colorado, Wyoming and Utah, and their extraction requires prolonged heating of kerogen in oil shale rocks to produce refinable product, a process that takes abundant amounts of fuel and water in the arid West. The process is not to be confused with development of shale oil being extracted from formations such as the Bakken fields in North Dakota.

Environmentalists cheered the surprise victory.

David Abelson, oil shale policy adviser at Western Resource Advocates in Boulder, Colo., said he supported the amendment, arguing that oil shale investors like Royal Dutch Shell PLC, Exxon Mobil Corp., Total and Chevron Corp. have "enormous cash reserves" and need no assistance from taxpayers to fund research into the fuel.

"Congress is faced with some very tough budget choices," Abelson said. "Defunding this account is one of the easy choices they can make, and a majority of House members recognized that and voted the right way."

Matt Garrington, co-director of the Checks and Balances Project, said the vote showed that "even the Republican-controlled House agreed that new taxpayer subsidies for oil shale are a ludicrous use of taxpayer dollars."

Section 1703 loan guarantee program survives

The broader spending bill debate was marked by repeated citations of now-bankrupt solar panel manufacturer Solyndra, which received a $535 million loan guarantee under a program established by the 2009 economic stimulus law. Several members succeeded in attaching amendments to the bill targeting that program, known as Section 1705, which stopped being able to distribute loans last September.

But the separate Section 1703 loan guarantee program, which can still provide loans for renewable, nuclear and other energy projects, survived an assault led by Reps. Dennis Kucinich (D-Ohio) and Tom McClintock (R-Calif.). Their amendment to block funding for 1703 won backing from the conservative group Heritage Action for America, which tagged it as a "key vote" for its score card, and an array of groups from both sides of the political spectrum, including Friends of the Earth, the National Taxpayers Union and Americans for Prosperity.

Nonetheless, it was roundly defeated, 136-282, with 127 Republicans joining 155 Democrats in voting against it.

Earlier yesterday, the House adopted amendments boosting funding for Yucca Mountain and limiting DOE's ability to subordinate taxpayer funds in the loan guarantee program, among others (E&ENews PM, June 6).

The House also approved a measure from Rep. Tom Reed (R-N.Y.) to move $36 million out of DOE's Advanced Technology Vehicles Manufacturing Program to boost its nondefense environmental cleanup account. That amendment passed 223-195.

Uranium amendments

The House yesterday voted 114-302 against an amendment from Rep. Cynthia Lummis (R-Wyo.) that would have curbed the amount of uranium DOE could sell or transfer.

DOE is currently sitting on billions of dollars' worth of depleted uranium, or uranium "tails," material that is left after natural uranium is "enriched" into uranium hexafluoride for use in nuclear weapons or power plants (E&ENews PM, April 1, 2008).

Lummis has repeatedly expressed concerns that DOE would upset the U.S. uranium market -- and miners in her state -- if the agency were to enrich depleted uranium from the federal stockpile. But supporters of the project say it would bring desperately needed jobs to Ohio.

Rep. Bill Johnson (R-Ohio) said during an interview yesterday that he welcomed the defeat of the Lummis amendment, which he said was a backdoor attempt to block support for DOE's $5 billion American Centrifuge Plant in Piketon, Ohio.

DOE is considering taking on liability of uranium "tails" or buying enrichment technology at the Ohio facility to free up money for Bethesda, Md.-based U.S. Enrichment Corp. (USEC), which is leasing the plant, to continue operating past June 15 (E&E Daily, May 18).

Johnson said that he aligns with Lummis on most issues, but he has opposed several colleagues that have introduced language to block research at the USEC plant in Ohio. Johnson said it is "just simply wrong thinking" to curb what DOE can do with the tails or curb funding for USEC, because the plant is needed as a domestic source of uranium enrichment to support nuclear weapons production.

On that note, the House on a 168-249 vote defeated language from Reps. Ed Markey (D-Mass.) and Michael Burgess (R-Texas) that would have stripped $100 million from DOE's budget meant to support research of uranium enrichment technology at the Ohio plant. The Senate fiscal 2013 energy and water spending bill also contains research money for USEC. The company ultimately hopes to secure a $2 billion federal loan guarantee.

The project has sparked a larger battle on Capitol Hill, garnering support from House Speaker John Boehner (R-Ohio) and Ohio and Kentucky lawmakers on both sides of the aisle, but sparking opposition from Markey and Rep. Steve Pearce (R-N.M.).

The House also voted 328-89 to include an amendment from Rep. Jeff Fortenberry (R-Neb.) that pulled funding from DOE's budget to build a mixed oxide (MOX) facility, which would turn surplus weapon-grade plutonium into reactor fuel. Fortenberry called for the money to be redirected to the General Threat Reduction Initiative, which supports nuclear nonproliferation programs.

Markey applauded the inclusion of the language but said he ultimately hopes to cancel the project altogether instead of merely stymieing funding. Markey also introduced legislation in February that would cut funding for the MOX plant. "The MOX facility plan would have been a nuclear bomb budget buster, costing American taxpayers billions to produce dangerous, toxic nuclear fuel that no utility in America wants to buy," Markey said in a statement. "MOX fuel is dangerous, polluting and expensive."

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