Congress again tries to roll back 2005 energy act

Act promotes power lines, gas wells, nuclear plants and more

By FRITZ MAYER

WASHINGTON, D.C. — Congressman Maurice Hinchey has been working doggedly to defeat it since it passed, but so far the forces that support it have proved stronger that Hinchey and his associates.

It’s the Energy Policy Act of 2005, which was famously sculpted behind closed doors by Vice President Dick Cheney and various energy industry professionals and lobbyists. Because details of the meetings have never been made public, the exact identity of all of the participants remains unknown.

In the latest assault on various provisions of the energy act, the House of Representatives passed the Renewable Energy and Energy Conservation Tax Act on February 27, which would promote the use of renewable energy in the United States. To pay for the tax breaks granted in the bill, it would repeal $18 billion in tax subsidies for oil and gas companies that were established in the energy act. With oil companies earning record profits, lawmakers who support the new legislation argue that oil and gas companies don’t need subsidies.

President George W. Bush doesn’t agree and has threatened to veto the legislation, and it’s not clear that the senate will pass similar legislation.

But subsidies for oil companies are just one part of the energy act that critics oppose.

There is, for instance, the part of the 2005 energy act that allows the federal government to override the state government in the siting of certain power line projects. Without this provision, it is unlikely that New York Regional Interconnect, Inc. would still be pursuing a new power line project that would cut through Sullivan County. Critics say the act is similarly helpful to the new power line project proposed in Northeast Pennsylvania.

Another provision of the 2005 energy act is helpful to companies that want to drill for gas in New York and Pennsylvania, as well as other parts of the country. Through the energy act, the process called hydraulic fracturing, or fracking, in which water laced with sand and chemicals is forced into rocks deep underground, was exempted from the jurisdiction of the Safe Water Drinking Act of 1974. This makes the process, which was developed by Halliburton, much less expensive to pursue and, critics charge, allows gas companies to pollute ground water with impunity.

Those two provisions have direct impacts in the Upper Delaware Valley, but other provisions with impacts on other regions have also raised the hackles of critics.

The 2005 energy act, for instance, was good for the nuclear power industry. The act included $20.5 billion in tax credits, loan guarantees and other benefits for new nuclear power projects.

Before the energy act passed, no new licenses for a nuclear power plant had been issued in 30 years. Now, according to a March 4 article published by the Miller-McCune Center for Research, Media and Public Policy in Washington, DC, 17 companies are planning to apply for licenses for new plants, and six have already applied.

One of those companies is PPL. In a press release issued on February 26, the company said PPL Nuclear Development, LLC, “is pursuing a construction and operating license for a potential new nuclear unit in Northeast Pennsylvania, near PPL’s Susquehanna nuclear plant.”

Another provision of the 2005 energy act has to do with liquid natural gas (LGN), which is natural gas that has been cooled to minus 260 degrees Fahrenheit to turn it into a liquid. Because natural gas takes up 600 times as much space, LGN is much cheaper to ship.

Before use, LGN is reheated at terminals and converted back into a gas. There are plans in the works for five separate LGN terminals in Oregon to help meet the growing demands of gas consumption in the Northwest. The LGN would be brought from overseas by tanker and then distributed through pipelines.

Here, too, the 2005 energy seemingly provided a benefit for the companies vying to build multi-million-dollar LGN terminals, because it shifted final authority on the siting of LNG terminals from the state to the Federal Energy Regulatory Commission (FERC). This has resulted in an exchange between federal and state officials that is remarkably similar to the one occurring over the creation of energy corridors in the Northeast.

According to The Oregonian, Oregon governor Ted Kulongoski is battling with FERC over whether the agency should determine if a need actually exists for the facilities before continuing with the application process. Kulonoski has also asked Oregon’s congressional delegation to pass legislation that would reverse the provision of the 2005 act that gave control of the siting process to the federal government.