Energy Bill Deal Reached on MTBE Issue

Legislators hope to send energy bill to President by August. Compiled by staff

Published on: Jul 22, 2005

House Energy and Commerce Chairman Joe Barton, R-Texas, plans to get approval of a energy conference committee next week so comprehensive energy bill legislation can be sent to President Bush by the start of the August recess.

A deal was reached Friday to prevent methyl tertiary-butyl ether, MTBE, from being a stumbling block in final approval. The Senate and House differ on whether taxpayers or oil companies should help pay for clean up spills of the gasoline additive that is found in cities' groundwater.

CongressDaily reports that Barton and Rep. Charles Bass, R-N.H., agreed on a proposal giving liability protection to MTBE makers in exchange for the creation of an $11.43 billion trust fund for cleaning polluted sites.

Bass is from a state that has many polluted site, whereas Barton is from Texas--the home of MTBE makers. It is unsure whether Senate conferees will go along with the proposal because how little MTBE makers will be asked to contribute. MTBE producers and the federal government would contribute to the existing Leaking Underground Storage Tank Trust Fund with an added state matching component.

"Industry would contribute $500 million in FY06 and $325 million in each of the following 11 years for a total of slightly more than $4 billion. The proposal also would transfer $2.4 billion from the existing LUST fund balance over the 12 years at a rate of $200 million annually. It would authorize $2.1 billion from the general treasury that has been diverted from MTBE transition assistance, which was authorized in a House-passed energy bill this year. States would make a 25% match," CongressDaily reports.

Municipalities estimate the total cleanup will cost more than $20 billion; the American Petroleum Institute estimates the cost at closer to $1.5 billion.

Barton will meet with three other conferees Friday and Saturday, Energy and Commerce ranking member John Dingell, D-Mich., and Senate Energy and Natural Resources Chairman Domenici and ranking member Jeff Bingaman, D-N.M., to discuss compromise language they could sign off on before a public meeting Sunday afternoon of the full conference. It is unknown whether the Senate will accept the compromise because it still provides liability to MTBE producers.

Climate change, ethanol, research and development and the Senate's renewable electricity mandate are scheduled for discussion on Sunday. The deal on MTBE will also be discussed Sunday. Another meeting is scheduled for Monday to discuss incentives, studies and any other unfinished business.

Barton explains that if an agreement on major issues is not reached by Monday, "it's obvious that we're not going to have an agreement," CongressDaily reports.

Ag Groups Testify Before House Committee on RFS

Another main difference between the House and Senate energy bill is the Renewable Fuels Standard. The House passed a 5-billion gallon mandate and the Senate approved a mandate calling for the use of 8 billion gallons of ethanol in the fuel supply by 2012.

Representatives from a lineup of agriculture groups testified before the U.S. House of Representatives Committee on Agriculture Thursday on legislation that would increase the production of renewable fuels.

The National Turkey Federation and National Chicken Council expressed concerns of the bill because "mandating the use of a certain quantity of fuel ethanol directly impacts the demand for corn, which in turn directly impacts the economic viability of animal agriculture to feed corn."

Supporters testifying in favor of the large RFS mandate include the National Farmers Union and National Corn Growers Association. Minnesota Gov. Tim Pawlenty also shared Minnesota's growing dependence on renewable fuels.