Energy Bill Drops Contentious MTBE Legislation

In an effort to increase the chances of the Energy Bill passing through Congress, the Senate Energy & Natural Resources Chairman Pete V. Domenici, announced plans this week to strip the contentious MTBE safe harbor provision from the comprehensive bill. The renewable energy community is largely in favor of the energy bill since it contains a number of beneficial items for the clean energy industries.

Washington, D.C. – February 5, 2004 [] “I have informed Chairman Tauzin and House leadership of my intentions. They aren’t particularly happy about it, but I believe stripping MTBE out is necessary to get this bill through the Senate,” Chairman Domenici said. After passage in the U.S. House of Representatives last year, the Energy Bill failed on narrow margins just before the holiday break, and friction over the MTBE provision was partly to blame. The legislation protects the manufacturers of the gasoline-additive MTBE from defective product lawsuits. The chemical is a known pollutant and hundreds of cities and communities across the U.S. are suffering its effects. “Reports that Chairman Domenici plans to drop the MTBE safe harbor provision from the Energy Bill should be celebrated by all Americans who value safe drinking water,” said Jack Hoffbuhr, Executive Director of the American Water Works Association, in a statement. “If the MTBE safe harbor provision became law, Congress would have excused gasoline manufacturers from their role in a mess that has harmed hundreds of drinking water supplies nationwide. The $29 billion cleanup tab would be left to local communities, water utilities and water consumers.” While there were many items, including the MTBE provision, that drew almost universal condemnation from environmental groups, the energy bill as a whole received broad support from the renewable energy industry trade groups in Washington. The bill’s failure to pass last year cost the wind power industry a crucial tax credit. The expiration of this Production Tax Credit (PTC) will cause a certain downturn in wind energy construction projects in 2004, according the American Wind Energy Association (AWEA). The PTC and many other pieces of legislation for all the renewable energy industries are wrapped up in the energy bill. Without the MTBE legislation, the bill stands a better chance to move forward. Domenici outlined plans to reduce the overall cost of the bill before sending it to the floor this month. Most of the cuts will come from tax incentives, he said. Those are the bulk of the provisions that score under Congressional Budget Office guidelines. There is no indication yet if renewable energy, and energy efficiency provisions will suffer cuts. “The energy bill’s allocation for FY04 is zero, but Congress must take some action to this year to address electricity,” Chairman Domenici said. “On this vital issue, a budget point of order is inevitable. However, the cost of this provision will be completely offset by fees charged to power companies to implement the program. However, for technical reasons, the provision will still be subject to a point of order.” With that exception, the leaner bill, to be offered as an amendment, will be within the allocation provided for the energy bill, Domenici said. In unrelated news, Rep. Billy Tauzin is stepping down as chairman of the House Energy and Commerce Committee, effective Feb. 16. Tauzin and Domenici were the key architects of the Energy Bill.
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