Democrats urged to pass energy bill

Democrats urged to pass energy bill
By Edward Luce in Washington
Copyright The Financial Times Limited 2007
Published: June 11 2007 21:50 | Last updated: June 11 2007 21:50


Harry Reid, the Democratic Senate majority leader, on Monday called on his colleagues to enact a bill this week that would reduce US oil consumption by 4m barrels a day by 2020 – about a fifth of current consumption.

But Mr Reid appeared to water down earlier Democratic commitments to push for early passage of a US economy-wide carbon cap and trade system that would deal with global warming.

There is growing doubt about whether the Democratic Congress can meet its hopes of drafting a comprehensive cap and trade bill before the July 4 public holiday.

“At the G8 summit last week, President Bush’s so- called ‘bold’ approach to global warming was to give the issue ‘serious consideration’ in the future – or, in other words, ignore it,” Mr Reid said in a speech to the Center for American Progress, a liberal think- tank, in Washington. “The time for more meetings and blue ribbon panels is long past. It is time for action.”

But the Senate’s energy bill is likely to attract criticism from both economists and environmentalists because it combines populist measures that deal with alleged “price gouging” by oil companies with measures that would try to reduce climate change – without acknowledging any clash between the two objectives.

Mr Reid yesterday repeated Democratic allegations, which have not so far been supported by Federal Trade Commission inquiries, that the big US oil companies manipulate the market in order to push up petrol pump prices for US consumers, which are now close to a nominal high of $3.30 a gallon.

“On the president’s watch, the cost of gas and home heating has doubled,” he said.

The bill, which is expected to be debated today, is also relatively modest in the measures that do target carbon emissions. For example, it calls for an improvement in federal Corporate Average Fuel Economy standards to 35 miles per gallon by the year 2020, which is below the 2007 vehicle emission levels in many developed countries.

The bill also provides bigger investment incentives for research into alternative energy and much tougher standards for the energy efficiency of federal buildings and consumer products.

“If the Senate is serious about tackling global warming, then why is it trying to lower gas prices?” said a leading environmental lobbyist. “The carbon lobby appears to be succeeding in diluting this Congress’s ambitions.”

There are greater concerns, however, about a pending bill in the House of Representatives, which is sponsored by John Dingell, a representative of Michigan, which is home to America’s “big three” carmakers.

The bill, which is not thought to have the full backing of Nancy Pelosi, the House Speaker, would strip California and other states of the ability to set their own tougher vehicle emissions standards, in spite of the fact that the US Supreme Court upheld their right to do so in a ruling earlier this year.

The bill, which is co-sponsored by Rick Boucher, who represents the coal-rich state of Virginia, also contains boosts for coal-to-liquid technology, which produces far higher carbon emissions than most oil consumption.

Meanwhile, all the 2008 Democratic presidential candidates and at least one Republican presidential candidate – John McCain – are campaigning for a tough carbon reduction target underpinned by an economy-wide cap and trade system.