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Big Energy Decries Democratic Policy Reversals

Top officials of trade groups representing oil, electricity and nuclear power have surveyed Congressional Democrats’ emerging energy proposals and see nothing but trouble in the upcoming legislation. The energy trade group officials at a press briefing Tuesday said the proposals threaten private-sector investment and may hamper production, which could result in higher energy prices for consumers.

The comments came in advance of today’s House Natural Resources Committee hearing on a bill by Chairman Nick Rahall (D-W.Va.) that would reverse several controversial provisions of the Energy Policy Act of 2005, which emphasized domestic energy production and reliability.

EPACT “embodies solutions” that Congress should accelerate and not allow to “languish,” said Bruce Josten, the U.S. Chamber of Commerce’s executive vice president of government affairs.

Rahall’s proposed legislation would revoke or alter provisions on leasing oil shale and tar sands on public land, federal designation of energy transmission corridors and expedited permitting for oil and gas drilling, among other things.

“I think the Rahall bill goes a long way towards fixing some of the more egregious problems and overreaching that we had in EPACT,” said the Sierra Club’s Josh Dorner. EPACT rules on the use of transmission corridors by utility companies, he said, are “the biggest federal land grab of all time.” Oil shale and tar sands, two energy methods promoted under EPACT, he added, are “two of the dirtiest and most expensive and destructive ways we can get oil.”

Industry officials, of course, take the opposite view.

Alex Flint, the senior vice president for governmental affairs for the Nuclear Energy Institute and a former Senate staffer who played a key role in drafting EPACT, said changing the law will inject uncertainty into the regulatory process, which in turn will hamper investment.

“It takes time for markets to respond to broad pieces of legislation,” he said at a briefing sponsored by a coalition of leading industry groups known as the Alliance for Energy and Economic Growth.

“Rewriting the rules every five years will absolutely block investment,” Flint added.

Red Cavaney, the president and CEO of the powerful American Petroleum Institute, also blasted legislation scheduled for floor consideration Tuesday that would allow the U.S. to file antitrust lawsuits against the Organization of Petroleum Exporting Countries. The bill, sponsored by House Judiciary Chairman John Conyers (D-Mich.), “breaks incredible new ground” that threatens nations’ sovereignty, Cavaney said.

The Bush administration Tuesday threatened to veto that bill, saying it would lead to retaliatory actions against U.S. companies by other nations. But the Senate Judiciary Committee has backed similar legislation.

Tom Kuhn, the president of the Edison Electric Institute, which represents the country’s for-profit electric utilities, criticized a proposal that would require a percentage of electricity to be generated from renewable sources — known as a renewable portfolio standard. The proposal would force utilities to use wind energy, which is not feasible in many parts of the country, Kuhn said, adding that the result will be higher energy costs for consumers.

More than 50 Senators signed a letter last month backing an RPS, which likely will emerge as an amendment to comprehensive energy legislation the Senate will take up after the immigration debate.

Cavaney also criticized legislation moving in both chambers that would allow new federal enforcement authority for gasoline price-gouging during emergencies declared by the president. The bill — which House Majority Leader Steny Hoyer (D-Md.) said could be on the House floor today — could disrupt efforts by gasoline suppliers, Cavaney said.

He also said Congressional efforts to promote biofuels — especially ethanol — interfere with market forces. “The demand is not there,” he said of E85, a fuel blend that contains mostly ethanol. Because most domestic ethanol is currently produced from corn, which cannot be grown in sufficient quantities for both food and fuel, Cavaney dismissed the current push to promote biofuels without affordable cellulosic ethanol technology.

“This is part of a joke that is being played on the American people,” he said.

Luke Popovich of the National Mining Association said Congress should fully fund clean coal technologies as well as techniques for capturing carbon dioxide emissions, which some consider the leading cause of climate change. “The country is not in danger of spending too much money on carbon sequestration technology,” Popovich said.

Industry officials weren’t entirely critical. They applauded some Congressional energy initiatives, including efforts to increase energy-efficiency standards. Said Kuhn: “It’s a good thing to do.”

Richard Shelby, the executive vice president of the American Gas Association, also applauded an upcoming bipartisan effort by Reps. Neil Abercrombie (D-Hawaii) and John Peterson (R-Pa.) to expand natural gas exploration in the Outer Continental Shelf. That bill will be unveiled Thursday.

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