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US Environmental Record

Regulation of MTBE

Project: US Environmental Issues
Open-Content project managed by Derek, mtuck

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After 71 days of negotiations, Congressional Republicans announce that they have agreed on an energy bill that would provide some $20 billion in tax breaks for power companies. [New York Times, 11/15/2003; Christian Science Monitor, 11/19/2003] President Bush voices his support for the bill—drafted mostly by Republicans—which he says will make the US “safer and stronger” by helping to “keep the lights on, the furnaces lit, and the factories running.” He also states, “By making America less reliant on foreign sources of energy, we also will make our nation more secure.” [New York Times, 11/15/2003; US President, 11/24/2003] To facilitate the bill’s passage through Congress, “negotiators sprinkled in dozens of sweeteners sought by states and congressional districts,” including nearly $1 billion in shoreline restoration projects, tax credits for a company that manufactures fuel from compressed turkey carcasses, and a provision doubling the use of corn-based ethanol as a gasoline additive. The Republican lawmakers also dropped a section that would have opened the Arctic National Wildlife Refuge to oil exploration, as Democrats had made clear that they would vote against any bill containing such a provision. But the Republicans decided against including a Democrat-favored plan to require large utility companies to steadily increase their use of energy from clean, renewable sources such as wind and solar power. [New York Times, 11/15/2003; Washington Post, 11/16/2003; Associated Press, 11/16/2003; Christian Science Monitor, 11/19/2003] The bill includes:
bullet A provision introduced by House Majority Leader Tom DeLay that would provide energy companies and universities with $2 billion in subsidies over the next 10 years for research and development of ultra deep-water oil exploration techniques and “unconventional” natural gas extraction. [Washington Post, 11/16/2003; Associated Press, 11/16/2003; Christian Science Monitor, 11/19/2003]
bullet A controversial provision granting Gulf Coast refiners of the fuel additive MTBE $2 billion in subsidies to assist them in the phasing out of MTBE production. The phase-out, originally proposed to take 4 years, is extended to 10 by the bill. MTBE, or methyl tertiary-butyl ether, which helps decrease smog, is known to contaminate groundwater. The new energy bill would also prevent communities from bringing product liability lawsuits against the manufacturers of MTBE. Tom Delay was a strong supporter of this provision, as were other legislators from Louisiana and Texas, where MTBE is produced. [New York Times, 11/15/2003; Washington Post, 11/16/2003; Associated Press, 11/16/2003; Christian Science Monitor, 11/19/2003]
bullet A section dealing with the electric grid that would require large power companies to meet new mandatory reliability standards. [New York Times, 11/15/2003; New York Times, 11/16/2003]
bullet Royalty relief to the owners of marginal oil and gas wells. The program would apply to approximately 80 percent of all wells on federal lands. [Christian Science Monitor, 11/19/2003]
bullet A provision that would allow taxpayer money to fund the clean-up of leaking underground gasoline storage tanks (LUST). [Natural Resources Defense Council et al., 11/17/2003]
bullet A provision authorizing Alaska’s “Denali Commission” to use over $1 billion on hydroelectric and other energy projects on Alaska Federal Lands. [Natural Resources Defense Council et al., 11/17/2003]
bullet A provision permitting urban areas like Dallas-Ft. Worth, Washington, DC and southwestern Michigan to further delay efforts to reduce air pollution, “an action that will place a significant burden on states and municipalities down-wind of these urban centers.” [Natural Resources Defense Council et al., 11/17/2003]
bullet $100 million/year in production tax credits for the construction of up to four light-water nuclear reactors. [Washington Post, 11/16/2003; Christian Science Monitor, 11/19/2003]
bullet Loan guarantees for building a $20 billion trans-Alaska natural gas pipeline. But officials of ConocoPhillips, a major backer of the project, complain that the bill’s incentives are insufficient to get the project moving. [Associated Press, 11/16/2003; Washington Post, 11/16/2003]
bullet Tax incentives to encourage wind power generators, energy-efficient homes and hybrid passenger cars running on gasoline and batteries. Additionally, it sets aside funds for equipping government buildings with photovoltaic cells and developing energy-efficient traffic lights. The package also allocates $6.2 million to encourage bicycle use. But according to a preliminary estimate by the American Council for an Energy-Efficient Economy, these progressive reforms would eliminate only about three months worth of energy use between now and 2020. [Washington Post, 11/16/2003]
bullet A repeal of the 1935 Public Utility Holding Company Act, which limits utility industry mergers. This provision was a top priority for the electric power industry and the White House. [Washington Post, 11/16/2003] Senator Pete V. Domenici, Republican of New Mexico and chairman of the conference committee charged with resolving differences between the House and Senate bills, acknowledge to the New York Times that the bill will likely be criticized. [New York Times, 11/15/2003]

Entity Tags: Pietro V. (“Pete”) Domenici, US Congress, George W. Bush, Tom DeLay

Category Tags: Air pollution, Corporate welfare, Energy industry, Oil and gas industry, MTBE, Key Events

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