US Senate turnover changes prospects for energy legislation

The decision by Sen. James Jeffords (R-Vt.) Thursday morning to leave the Republican party gives Democrats control of the Senate and dramatically alters the course of future US energy policy, congressional and industry sources predicted.

WASHINGTON, DC, May 24 -- The decision by Sen. James Jeffords (R-Vt.) Thursday morning to leave the Republican party gives Democrats control of the Senate and dramatically alters the course of future US energy policy, congressional and industry sources predicted.

In his new role, Jeffords may take control of the Senate Committee on Environment and Public Works, overstepping Harry Reid of Nevada. As a Republican, Jeffords often was at odds with his fellow party members and sided with Democrats on climate change issues and renewable fuel funding.

But a more immediate concern to the White House is the timetable in which future political appointees will win Senate approval. The nominations of Pat Wood and Nora Mead Brownell to serve on the Federal Energy Regulatory Commission, and the nomination of Steven Griles to be Deputy Interior Secretary, have been sent to the Senate floor for confirmation.

Congressional sources predicted those three nominations likely will be approved, but given the abrupt change in the Senate's leadership, there could be delays confirming other political appointees, especially if they are seen as controversial. And delays in those appointments could seriously hamper the White House from moving forward with its own public policy agenda, lobbyists said.

The Senate turnover could delay or alter the course of a variety of pending bills, although congressional sources said it is too early to predict the outcome.

As Senate Majority Leader, Tom Daschle (D-SD) has not been an oil industry supporter. With Daschle in charge and Sen. Tom Harkin (R-Iowa) expected to chair the Committee on Agriculture, it's a sure bet fuel ethanol subsidies will be safe. The Bush administration's energy policy plan does not endorse California's request to abandon the oxygenate requirement in reformulated gasoline, and farmbelt senators are expected to successfully defend the standard. That, in turn, will create a new ethanol niche market in the state since local officials are phasing out the use of the fuel oxygenate additive methyl tertiary butyl ether.

Perhaps one bright spot for the oil industry is the likelihood that Sen. Jeff Bingaman (D-NM) will become chairman of the Senate Committee on Energy and Natural Resources, succeeding Frank Murkowski (R-Alas.).

Bingaman wants to push an omnibus energy-policy bill, and as a lawmaker from an oil-producing state, is expected to be in tune with many (but not all) all of the issues industry has been supporting. As the top Democrat on the panel, Bingaman introduced two energy bills in March that were similar to Murkowski's sweeping energy package.

Both senators support expanded tax breaks for marginal well production and energy efficiency. And both senators want Lease Sale 181 in the eastern Gulf of Mexico to be held as scheduled in December, although Bingaman wants some tracts dropped.

Still, there are obvious differences between the two lawmakers.

Bingaman does not support opening the coastal plain of the Arctic National Wildlife Refuge to drilling. He also would be unlikely to support lifting the perennial ban on most offshore US drilling that coastal state lawmakers have kept in place for nearly two decades. Lobbyists also expect Bingaman to be more aggressive with FERC. He is not expected to endorse electric-power price caps, but he is likely to pressure the agency to be more vigilant in overseeing West Coast wholesale prices.

Despite those differences, congressional sources and industry lobbyists predict there is enough common ground between the two lawmakers to improve the prospects of passing sweeping energy policy legislation this year.

How much a committee-passed bill would resemble the White House's energy blueprint is questionable. Most of the White House plan is administrative with a strong emphasis on regulatory reforms. Most of the congressional recommendations, however, are controversial and some have been debated at length on Capitol Hill without resolution. Proposals like exploration of ANWR are likely off the table unless a dramatic supply shock sends gasoline prices skyrocketing.

Other measures, such as an electricity restructuring bill, and revision of national fuel efficiency standards, may have a slightly better chance of passing under a Democratic Senate. But most industry officials are loath to speculate on the chances, since it is not known how far the White House would be willing to compromise.

On trade issues, the Senate Democratic leadership is expected to continue supporting trade sanctions against Iran and Libya. Some Senate Republicans, notably Murkowski, have criticized the Iran Libya Sanctions Act of 1996 as counterproductive. But strong bipartisan interest in extending that legislation in the House makes it likely the Senate would have approved ILSA even if Republicans had remained in control.

On other foreign policy matters, Sen. Joe Biden (D-Del.) is expected to succeed Jesse Helms (R-NC) as Committee on Foreign Relations chairman. Biden is expected to take a much more genteel tone with the United Nations than Helms and is seen as more of an internationalist.

Robert Byrd (D-W.Va) is line to become Committee on Appropriations chairman..

It's a no-brainer that clean coal research funding will be fully supported under his leadership, and some industry sources are cautiously optimistic that other fossil fuel funding will be preserved.

Alaska may be the biggest loser in the power shift. Murkowski, the energy panel chairman, and Ted Stevens, the appropriations chair, both will lose their posts. The third member of the Alaska delegation, Rep. Don Young (R-Alas.), is no longer chairman of the House Resources Committee due to seniority rules, and in January was forced to switch to the chair of the Committee on Transportation.

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