Will Congress pass an energy bill this year after years of failed attempts? And how will the legislation address rising gasoline prices? What issues will President Bush's nominee for EPA administrator face in this week's confirmation hearing? E&E Daily and Greenwire editors and reporters discuss these and other key issues Congress deals with as it returns from Easter recess.
Colin Sullivan: Welcome to OnPoint. I'm Colin Sullivan. Today we're having a reporter's roundtable to discuss Congress coming back into session this week. With us today is Mary O'Driscoll, senior energy reporter; Darren Samuelsohn, senior air reporter; and Cy Zaneski, the editor of Greenwire. Thank you all for being here.
Cy Zaneski: Thank you.
Mary O'Drisoll: Thank you.
Darren Samuelsohn: Thanks for having us.
Colin Sullivan: Mary, I'd like to start with you. We're coming back to Congress was some record gas prices and Chairman Joe Barton, in the Energy and Commerce Committee, has called a markup this week. Is the latest crisis enough to push an energy bill through Congress this time?
Mary O'Drisoll: Well I don't know how many times I've had to report about the latest crisis and getting Congress to work on the energy bill. I think we've done a count and I've got probably about five or six crises that we've already had. So who knows if the latest energy price surge is going to create the crisis that they need, but crisis is always a good thing to get Congress to act on legislation.
Colin Sullivan: Still, it seems like this time gas prices are higher than ever and the price of oil is going up and showing no signs of abating. Do you think this one's different?
Mary O'Drisoll: Well, it could be. Yeah, you're right, gas prices have not been this high this early in the year. We're not even anywhere near the summer driving season and the gas prices are already pretty high and projected to go up to what, $110 a barrel? That's kind of the outward projection, but still at the same time, this might be what does it, but, you know, there's always mine fields when it comes to Congress and enacting an energy bill.
Colin Sullivan: Now a lot of critics would say that Barton's energy bill does very little to address high oil and gas prices, especially in the short term. What's in there that would address high gas prices?
Mary O'Drisoll: Well just on Friday they released to the committee draft that's in advance of the markup that's supposed to start this week. It's pretty much along the lines of what H.R. 6 was and the discussion draft that he put out a few weeks back. But there's additional language now that they've added that they've already discussed in some forms before, but actually never had hearings on in the committee. So it's liable to bring up some controversy. Among those are the refinery licensing, putting DOE in charge of all the licensing of new refineries, especially in areas that are, it's very targeted to low income areas where the employment numbers are 10 percent higher than the national average. So the DOE would be able to accelerate the licensing of refineries there, to kind of address that refinery bottleneck. There's another one about boutique fuels that would reduce the number of the boutique fuels that are available in the market. Then there the usual kind of things that would expand the opportunity to drill for oil and gas on federal lands and to make it easier for companies to get access.
Colin Sullivan: But still, by all appearances, very little that would actually address high gas prices in the short term?
Mary O'Drisoll: Yeah, well, it's always a tricky thing for them to try to sell an energy bill on the latest crisis and prices, because whatever you do it's always going to be much more long term, so you have to try to sell it on the idea that this is going to help us to be energy independent and to be able to address these issues in the long term. The short term, you know the energy crisis, prices crises I guess, is something that's very difficult to address in a bill.
Colin Sullivan: Cy Zaneski, I'd like to turn to you, the editor of Greenwire. While we're on our break, in the recess, Greenwire ran a spotlight story on refining capacity in the United States, basically said that our dependence on foreign oil can't necessarily be addressed by going over to OPEC and jawboning OPEC, but rather we need to address refining capacity first. What's your opinion on that? I mean what's the state of the U.S. refining industry?
Cy Zaneski: We haven't built a new U.S. refinery since 1976. During that time our use of gasoline has continued to climb and as we saw last month the refinery explosion near Houston took out 3 percent of the U.S. capacity, refining capacity, just like that. There is one new refinery on the drawing board, but that's still a long way from coming to pass, that's in Arizona. So that Americans, while we like to drive, we like to use gasoline, we also don't want refineries in our backyards, so it's still very much an uphill fight. That's going to get worse as China and India continue to use more petroleum and they take up a good deal of the refining capacity in the world right now and that's only going to get worse.
Colin Sullivan: Darren, turning to you, what's the problem with refining capacity in this country? The refining industry would argue that EPA regulations, regulating stuff like sulfur content and gasoline, are too tough. What's your opinion on that?
Darren Samuelsohn: Everything on the air side builds on top of what these two are saying here, on multiple levels. We're driving larger cars, less efficiency, no new refineries built, we've got the Arizona refinery, we're in the mid-90s in terms of capacity. Now in terms of the existing refineries that are out there, 50 percent of the U.S. refining industry is under enforcement settlements with the Justice Department, so that they're allowed to expand under the New Source Review programs and they have to install new pollution controls on them. The Justice Department has been going after these refiners. Now EPA has put rules out there, the new source review rules, to make it easier for the existing refiners to expand. Those are tied up in court with Attorney General Eliot Spitzer challenging those rules. Also you've got the EPA regulations that were enacted in the Clinton administration and the Bush administration, to lower the sulfur content in gasoline and diesel fuel. The tier 2 gasoline standards come into play in 2004, last year, through 2006, so those are being implemented right now. And you've got diesel standards, on road and off road, that are going to be put into place at the end of this decade, starting in 2006. The issue is refiners are worried downstream that they're going to be able to get the fuel through without contaminating it. I mean you've got all these different kinds of fuel. You've got jet fuels. You've got automobile fuels. You've got on-road and off-road diesel fuel. So there's all of these different blends that can contaminate within each other and the industry is, they haven't really been asking for relief yet from the existing rules, but they're making noise. They're talking with EPA about implementation. There's been some letters going back and forth on the Hill and it might factor into the debate that Mary will be covering as well.
Colin Sullivan: Do you have any indication of how these regulations actually affect high prices on the ground? I mean what's the actual translation there?
Darren Samuelsohn: The place where that would happen, in the reformulated gasoline world, we saw like three or four years ago there was a huge price spike in the Midwest when there was an explosion or there was, a plant went down in I think it was St. Louis or Milwaukee, but the whole Midwest because they rely on specific grades of reformulated gasoline because of their air quality issues, the prices went up because one refinery went down and you can't be pulling gasoline from New York or from California to fill the requirements that are needed in Chicago or St. Louis or Milwaukee. So there's these regional gasoline blends and so that's one of the things. In terms of these EPA standards, we're going to find out as the implementation happens what kind of price rises, EPA did gauge what the prices, you know how much they would go up, but I think it was only a couple of cents in terms of implementing these diesel standards and these new gasoline standards.
Colin Sullivan: Mary O'Driscoll, turning back to you. Beyond an energy bill, what can the federal government do right now? Go jawbone OPEC or stop putting oil into the strategic petroleum reserve? What can the Bush administration do in the short term to stem this price crunch?
Mary O'Drisoll: Well that's probably pretty much it. I mean Bill Richardson, the former Energy secretary, congressman, spoke recently to the National Wildlife Federation and said, I got criticized for jawboning OPEC when prices were $30 and now prices are at $55 and you're not seeing anybody jawboning OPEC. These are supposed to be our friends, Kuwait, Saudi Arabia. We're supposed to have good relations with them, yet they're not listening to us when it comes to our need for them to increase production to help lower prices. He says, you know, the president and he suggests the president himself needs to get personally involved in it.
Colin Sullivan: What about SPR? Is there any indication they'll stop putting oil into the --
Mary O'Drisoll: It's hard to say. There are calls for them to stop putting oil into it because you're supposed to buy low, sell high and with oil prices what they are now, maybe you should stop buying when oil prices are high and just wait. There's also a question of maybe whether you can trade oil from the SPR to help reduce the price and that kind of thing. There's some people out there calling for it. I guess maybe the duration of this price situation will probably dictate whether those calls get louder or more serious.
Colin Sullivan: Well, we'll see the how that plays out on the Hill starting this week.
Mary O'Drisoll: Starting this week, opening statements on Tuesday afternoon and then they'll be getting, they'll be going in earnest at the markup on Wednesday and Thursday.
Colin Sullivan: Darren, if we can change the subject from gas prices, I think we've dealt with gas prices long enough. This week we're also seeing Stephen Johnson head before the Senate EPW Committee for his confirmation hearings.
Darren Samuelsohn: Right.
Colin Sullivan: Do you expect any fireworks there?
Darren Samuelsohn: There will be fireworks, you know, sometimes they pull their punches, the senators do, when you get into this back and forth and the questions maybe are a little bit more pointed than the written questions. But you will see questions about Clear Skies, carbon dioxide, mercury, pesticide use on humans. Stephen Johnson, when he was the assistant administrator in the pesticide's office at EPA, he approved some studies of testing on humans, I believe, I mean Senator Boxer, it sounds like, is going to be the one that's going to go after him on that. Senator Carper will definitely be raising issues about information that he's been asking for. Senator Jeffords has a list that goes back to 2001, when he was the chairman of the committee, he'll be asking, "Why haven't I gotten all this information?" So clearly there's going to be a lot of questions, but when the vote finally happens, I think there's a tentative vote scheduled for April 13 for the committee, he'll probably pass. Jeffords, when Bush nominated him, came out with the statement that, "I will support Stephen Johnson," so if the nine Republicans on the committee and Jeffords come along with him, it will be 10 to 8.
Colin Sullivan: Who is Stephen Johnson? A lot of people thought Jim Connaughton was going to get the nomination from the White House, who is he?
Darren Samuelsohn: Stephen Johnson is a longtime career EPA employee. He has worked his way from, I guess, the career ranks and he became a political official during Clinton's rank, during Clinton's term. He's been the deputy administrator at EPA since, I think, 2004 when Marianne Horinko left and Linda Fisher left. Bush put him in there right underneath Mike Levitt. He's the first scientist ever to potentially lead EPA, so that has a lot of people excited in EPA that maybe like one of their own will be running the agency. There's a lot of criticism that the White House runs EPA, so having an EPA scientist there maybe will allay some of that criticism. Environmentalists mostly gave him, gave Bush applause when he announced Stephen Johnson's nomination.
Cy Zaneski: Darren, do you expect Johnson's going to have some trouble on the Hill with the EPA's mercury rule?
Darren Samuelsohn: It's very possible in the sense, I mean Boxer and Jeffords, who are both on the committee, have raised issue with the mercury rule, specifically with the health studies that EPA did, EPA funded and then people said that they ignored them when they actually put out the standards, that these health studies said that mercury could be controlled with a much larger health benefit on humans. So whether or not they actually, that turns into a no vote for them, I mean Jeffords hasn't given an indication that he's going to budge from where he was before, where he said he supports Stephen Johnson. When it comes to the floor and also, I mean you can't help but wonder, holds could be put on Stephen Johnson for multiple, for any number of reasons.
Colin Sullivan: OK. Mary, let's switch the subject again, plenty going on on the Hill with environment and energy stuff. Yucca Mountain, there is some possible fireworks this week in a House hearing. Can you talk about that? There's some allegations that a federal scientist may have falsified some data in putting the studies together on Yucca Mountain.
Mary O'Drisoll: Yeah, DOE, a couple of weeks ago DOE and the U.S. Geological Survey announced that they had found evidence of falsification of data by USGS employees who were studying the movement of water at the Yucca Mountain site, Yucca Mountain 90 miles northwest of Las Vegas, out in the desert and they're studying the movement of water. Which is key because that is Nevada's primary argument against putting the waste at Yucca Mountain because they say that the water moves a lot faster, a lot more than you expect and that it's just not safe because the water can migrate through, cause corrosion, which can cause the radioactivity to leach into the soil and the surrounding water table.
Colin Sullivan: Now do you feel like the Nevada delegation is perhaps in a better position than they've ever been to block the Yucca Mountain repository?
Mary O'Drisoll: Yeah, it's interesting, in covering this issue on and off for the past 20 some odd years, this is the first time I've actually really seen Nevada in a pretty good position here. This is one of the better positions they've ever been in. They've always been playing defense. They've always been trying to find some way around what DOE's been doing and this is the first time when they are able to go after DOE and just say, "We've told you that the science here is bad. Now you guys are showing us that it's bad." So as you can imagine, the Nevada people, every politician from Nevada has jumped on this like anything. Republicans and Democrats alike have jumped on this and are really seeking some answers and that there's really a feeling among some of those people that this could really tie up the whole DOE process. I mean some people are starting to draw some linkages to the Clinch River Breeder Reactor, which 20 some odd years ago was a big DOE project that failed and they spent billions of dollars on it and it failed. So they're starting to liken this to that same kind of a project.
Colin Sullivan: Still it seems like something of a stacked deck this hearing. You've got Representative Porter calling the hearing. You've got Senators Reid and Ensign coming in to testify.
Mary O'Drisoll: Yeah, well, Representative Porter has the fortune, I guess, of being the chairman of the subcommittee on the Government Reform Committee that oversees the federal workforce. Since this involves federal workers he has the authority to call a committee hearing on this, a subcommittee hearing on this. So they're bringing up DOE. They're bringing up the USGS. They're bringing up Harry Reid and John Ensign, are coming up, are coming over to testify. They're bringing in Nevada people. They're bringing in the antinuclear people from Nevada. They're bringing in a representative of the attorney general from the state of Nevada. So it is a pretty stacked deck. I think where everyone is going to be falling out on this, but it's going to be interesting. I think the eventual investigation is going to be interesting too. It's also interesting to note, before we get off this topic, is that the state of Nevada has also done their own investigation. They had one of their analysts do a, go onto what they call the Licensing Support Network, which is the Internet information database for the Yucca Mountain licensing process. The DOE is putting all of these documents up there and they did a word search, "falsification," "Yucca Mountain," they just typed those in, just your basic word search and came up with thousands of documents with those words in them. Searched through maybe the first 150 of them and found three pretty incriminating e-mails from DOE officials or DOE overseers, who were overseeing the project. Who said, you know, that we've got problems here and pointing out some various things, various problems that they found. So this might be a little more widespread. That indicates there might be some or problems than what they found at DOE and the USGS.
Colin Sullivan: It's probably going to add a few more years to your 23 years of covering Yucca.
Mary O'Drisoll: If we can go to 30 that would be fun.
Colin Sullivan: Darren, let's move on to Clear Skies. What's the latest on Clear Skies? What's going on there?
Darren Samuelsohn: Silence right now. The markup from a couple of weeks ago, ending in a tie. There'll be a House hearing on Clear Skies as it relates to the new EPA rules that were released, the CAIR rule for nitrogen oxide, sulfur dioxides, for Eastern power plants and the mercury rules. So Congressman Barton will start to talk about this and they say that it's to educate new members. They've held hearings, I think, it's been awhile since the last hearing in the House, but no real echoes in terms of there's going to be another mark up. Not hearing anything in the Senate in terms of compromise and I think Voinovich and Carper are kind of done talking at this point. Carper's, like I said before, he wants some information from Stephen Johnson that he hasn't gotten yet. As Domenici has raised, Senator Domenici from the Energy Committee, has said that Clear Skies could come up as an amendment on the floor, when the energy bill is on the floor, in the summer. You know we had that same sort of rumor going around in 2002 or '03, so Clear Skies as an amendment will constantly be coming up and I'm sure the administration's going to keep beating the drum, you know, Clear Skies, Clear Skies.
Colin Sullivan: What are some of the other targets, highway bill?
Darren Samuelsohn: You know, the highway bill is controversial enough as it is. That's what people say. I mean I ask the question all the time and people are oh, it's too controversial. Why do it there? The energy bill is, I mean if you tacked it onto the energy bill, it's such a controversial thing, it could bring down the energy bill and I don't know --
Mary O'Drisoll: Oh, like the energy bill's not going to be brought down by anything else?
Darren Samuelsohn: Exactly, I mean you bring it up and there'd be a debate and certainly a lot of the things that they're talking about in the energy bill have an effect on power plants. So why not try and fold it all together, but also why fold it together? Because it could be such a mess.
Colin Sullivan: And also, looming all over this, if Bush brings up his nuclear option that could just --
Darren Samuelsohn: Take everything down.
Colin Sullivan: Stall everything, take everything off the floor.
Darren Samuelsohn: Yeah.
Colin Sullivan: I'm sorry, I'd like to return to Everglades for a second. You used to cover Everglades when you were a reporter in Florida. What's going on with that? I mean there's a corps memo recently that talked about how Everglades restoration funding may be shifted to maybe to a Louisiana project or Chesapeake Bay project or Great Lakes projects. What's the status of Everglades restoration funding and is it in jeopardy?
Cy Zaneski: It's such a long-term proposition, and it's such a huge project that when they passed the bill authorizing the project in 2000, it was a 36-year proposition. It was $7.6 billion. It's now $8.4 or $8.5 billion and what the Army Corps of Engineers is concerned about is that they haven't built anything and the project cost is rising. They're getting calls for, let's see some restoration. Congress has yet to jump in and say, what's going on here? We might see that coming up in the next few weeks. I think this corps memo, that raised the alarm that things are going very slowly, I think it's going to get some attention now that project funding for other restorations is very little, there's very little money in the pot now and there could be a good deal of competition for that money.
Colin Sullivan: So what is going on here? What's going on? Why is progress so slow in the Everglades?
Cy Zaneski: The Everglades project is unique in that a lot of the restoration projects are highly experimental, controversial and the corps, before they can start doing anything has to test to make sure that first of all, the land is acquired. Make sure that the technologies that they're going to be trying are not going to fail. They knew this was going to be a slow ramping up, but it didn't matter as much in 2000 when the project was authorized because it was an election year. Both Republicans and Democrats knew Florida was a big deal, so the project passed overwhelmingly. Congress at the time was told, this is going to be a long road and it's going to be unlike any other corps project you've ever seen.
Colin Sullivan: So let's say this may play out possible during the appropriations process. You're saying possibly policy language to address the report that the corps and the Interior Department put out later this year?
Cy Zaneski: I wouldn't be surprised if it started getting some attention now on the Hill. At least I think Congress is probably going to start asking questions about, is it possible that we can actually get some restoration accomplished because we're now coming five years on and nothing's been done. I think folks who are supporting the project are getting a little nervous.
Colin Sullivan: Mary, I'd like to close the show with ANWR. We kind of covered the gamut here, we've run the gamut on the issues we cover. What's going on with ANWR? It's part of the Senate budget resolution, it's not part of the House budget resolution. Now they have to conference those resolutions. What's the process there?
Mary O'Drisoll: Well, right now I'd say this week they'll probably be getting their conferees together. I don't really think there'd be much going on of any real substance when it comes to that, but yeah, it's part of the Senate budget resolution. So they're going to have to meet and figure out whether it's going to be in there or not, which is going to be dicey for the House because the House could lose some much needed votes from the budget resolution if they attach ANWR to the final budget resolution. So that could be a problem. It will be interesting to find out what happens, but also then, you know, the budget resolution could get tied up with any number of other budget related issues. So it's going to be something that everyone's watching. But the environmentalists are really hoping and praying that the whole budget resolution pretty much blows up.
Colin Sullivan: That some of these other issues that might derail the budget issues, other than ANWR, drag it down, is what they're targeting now.
Mary O'Drisoll: Yeah, you know, tax cuts, spending caps, all those issues, that there's any number of issues that could blow the whole process.
Colin Sullivan: So the likelihood that we see a conference agreement by the statutory deadline, April 15?
Mary O'Drisoll: Oh boy, I'm not gonna make that call. I mean not likely, but they have done it. I don't know when the last time was that they did that, but they're supposed to do it. We'll see what happens. They've got two weeks now.
Colin Sullivan: OK. Mary O'Driscoll, Cy Zaneski, Darren Samuelsohn thank you all for being here. Join us tomorrow for another edition of OnPoint. Until then, I'm Colin Sullivan for E&ETV.
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