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Senate Energy Bill Is “Bush Lite”: Bad for Environment and Consumers

Feb. 27, 2002

Senate Energy Bill Is “Bush Lite”: Bad for Environment and Consumers

Fuel Economy, Renewable Energy and Rollover Protection Provisions Should be Considered Separately

WASHINGTON, D.C. — A sweeping energy measure scheduled to be unveiled in the Senate this week has positive aspects but is so laden with corporate giveaways that it will harm the environment and consumers, Public Citizen said today.

An analysis of the measure (Amendment 2917 to S. 517), reveals legislation that uses tax incentives and other handouts to cater to entrenched special interests such as the petroleum, electricity, nuclear and mining industries, which combined gave $73 million to candidates for federal office and national campaign committees during the 2000 and 2002 campaign cycles. The upshot is a measure that has many similarities to Republican energy legislation, which has been criticized for containing too many favors to industry and doing little for the environment.

“This latest energy measure caters to industry at the expense of the environment, consumers and sound public policy,” said Public Citizen President Joan Claybrook. “We are pleased that it requires increased fuel economy, crucial auto safety standards and the use of renewable energy sources. But these good pieces should be taken up by Congress on their own merits. They should not be saddled with the Enron-influenced, Exelon-tested and Exxon-approved provisions.”

On Wednesday, Claybrook sent a letter to members of the Senate critiquing the bill. She noted that the best parts of the measure deal with fuel economy and conservation. In what is becoming known as the Kerry-Hollings measure, fuel economy standards for all vehicles would be raised to 35 miles per gallon, which would reduce oil consumption by 2.53 million barrels per day by 2020.

Kerry-Hollings also would provide crash protections for rollovers and vehicle compatibility standards, which would require vehicles to be redesigned to do less damage to other vehicles in crashes. Other provisions of the energy legislation are designed to promote and reward energy efficiency and conservation in homes and businesses and would help foster a cleaner, safer and more affordable energy policy.

But severe problems exist. The bill would:

  Repeal the Public Utility Holding Company Act (PUHCA), which restricts the ability of electricity companies to make investments that divert resources away from their primary responsibility, which is serving electricity customers. Eradicating this act eliminates important consumer protections and could lead to more energy crises;

  Provide $1.3 billion over four years to subsidize nuclear power plants that are renewing operation licenses and to develop new reactors. In addition to the fact that this would expand the use of a risky technology, it would create much more nuclear waste. Currently officials are wrestling with what to do with existing radioactive waste and are pushing a flawed proposal to bury it in Yucca Mountain in Nevada;

  Extend certain tax breaks, currently given to nuclear power companies and designed to protect consumers, to unregulated power companies. The estimated cost of this tax break is $1 billion;

  Reauthorize portions of the Price-Anderson Act that cap liability for federal contractors involved in a nuclear accident. That would mean taxpayers would be on the hook if contractors spilled radioactive waste while trucking it to Yucca Mountain;

  Spend $1.8 billion to subsidize coal technologies, giving a huge handout to an industry that doesn?t need one;

  Spend more than $2 billion to promote on- and offshore oil and gas production, including risky “ultra-deepwater drilling”;

  Give $3.2 billion in tax breaks for the oil and gas industry to promote production, even though the five largest oil companies operating in the United States had after-tax profits of $43 billion last year; and

  Set up a royalty program that puts state and federal revenues for oil produced on public lands at risk and puts the federal government in the oil marketing business.

“It is unfortunate that this measure contains so many poor ideas that would give so much to wealthy corporations and do relatively little for the environment,” said Wenonah Hauter, director of Public Citizen?s Critical Mass Energy and Environment Program. “The Democrats are squandering an opportunity to improve our future. Lawmakers need to approve positive aspects of this bill separately and then go back to the drawing board.”

Click here to view Claybrook’s letter and an analysis of the Senate energy legislation.