The Senate is set to vote on two differing energy proposals on Monday. As of now, these will be offered as amendments to the Flood Insurance Reform and Modernization Act (S. 2284) which is currently being debated. Majority Leader Reid (D-NV) and Minority Leader McConnell (R-KY) had previously discussed offering the two proposals as separate bills, but have now agreed to offer them as amendments requiring 60 affirmative votes to be adopted. Neither measure is expected to receive enough support to pass at the current time.
The Republican amendment will look like a bill being offered by Senator Domenici (R-NM), the American Energy Production Act. Here are some provisions of that bill per this press release:
- Allows petitions for leasing activities in the Atlantic and Pacific regions of the Outer Continental Shelf in order to tap into the 14 billion barrels of known recoverable oil in this area.
- Establishes a competitive oil and gas leasing program for the Arctic National Wildlife Refuge Coastal Plain under the Mineral Leasing Act, providing access to over 10 billion barrels of recoverable oil.
- Repeals the $4,000 fee for new applications for permits to drill that was established in last year’s Omnibus Appropriations Bill.
- Suspends filling the Strategic Petroleum Reserve for 180 days.
- Repeals a provision in last year’s Omnibus which reduced mineral leasing revenue payments to States by 2 percent, and restores the 50/50 Federal-State revenue sharing structure.
- Mandates that 6 billion gallons of coal-derived fuels be produced by 2022, starting at 750 million gallons in 2015 and ramping up by that same amount annually. This will result in a 3.75 percent reduction in the amount of oil America is projected to import in 2022.
- Repeals the one year moratorium on funds to complete final regulations for the commercial leasing of oil shale established in last year’s Omnibus. Over two trillion barrels of oil shale currently exist in Colorado, Wyoming and Utah.
- Increases the current allowable contract duration of five years to 25 years for procurement of synthetic fuels by the Department of Defense.
The Democratic amendment will look similar to a bill introduced yesterday by the Majority Leader, the Consumer-First Energy Act. Here are some provisions of that bill per this press release:
- Will roll back $17 billion in tax breaks for oil and gas companies and instead invest those taxpayer dollars to improve consumer price protection, renewable energy development and energy efficiency technology through a designated Energy Independence and Security Trust Fund.
- Creates a 25% windfall profits tax on companies that fail to invest in increased capacity and renewable energy sources. This provision would not apply to the profits those companies reinvested in clean, affordable, domestically produced renewable fuels, expanding refinery capacity and utilization, or renewable electricity production. Places money in the previously mentioned Trust Fund.
- Calls for suspending through December 2008 oil purchases for the Strategic Petroleum Reserve. Filling could resume when the 90 day average price of crude oil recedes to $75 or less.
- Would give the President the authority to declare an energy emergency should there be a shortage, disruption or significant pricing anomalies in the oil market. Once an emergency is declared, setting an “unconscionably excessive price” during such an emergency would be deemed unlawful and subject to civil penalties.
- Prevents traders of U.S. crude oil from routing transactions through off-shore markets to evade speculative limits and sets forth reporting requirements.
- Requires the Commodities Futures Trading Commission to set a substantial increase in the margin requirement for all oil futures trades, contracts or transactions.
- Allows the U.S. Attorney General to bring an enforcement action against any country or company that is colluding to set the price of oil, natural gas, or any other petroleum product. This provision is geared toward nations that participate in OPEC.
Both sides are firmly behind their proposals and believe they each have the right ideas to move America off of foreign oil and lower gas prices. Many pundits believe this is more of the same rhetoric that has flown around the halls of Congress for the past decade: Republicans call for more drilling, Democrats call for punishing the “big oil” companies. Either way, it appears that rhetoric is all these proposals will be good for as neither stands much chance of gaining the supermajority required for passage.