Apr 25, 2005

House Approves Energy Bill Shielding Oil Giants from Lawsuits, Taxes

The House approved a sweeping energy bill Thursday aimed at increasing domestic production. The bill includes provisions to allow oil drilling in an Alaskan wildlife refuge and to shield makers of the gasoline additive MTBE from water contamination lawsuits.

Crafted mostly by Republicans, the bill was approved 249-183 after two days of wrangling. The GOP majority turned back several attempts by Democrats to add measures reducing energy use, including a proposal for higher automobile fuel economy requirements.

In addition to protecting oil companies from lawsuits, the bill includes $12 billion in tax breaks and subsidies for energy companies–even more than the Bush administration had originally wanted. The White House strongly endorsed the measure.

"This is a comprehensive piece of legislation and it does address one of the fundamental problems facing our nation and that is that we are growing more dependent on foreign sources of energy," claimed White House spokesman Scott McClellan.

Democrats contended that it would have little impact on U.S. reliance on oil imports and failed to address high gasoline and other energy prices. They denounced the overall bill as a giveaway to traditional energy industries.

"They're not giving MTBE manufacturers a slap on the wrist. They're giving them a pat on the back," said Democratic leader Nancy Pelosi of California where MTBE contamination has been widespread. "It is the taxpayers who are stuck with the bill."

"The bill is clearly designed to help energy companies make more money – not help the American people save money," Pelosi told reporters, describing the bill as "anti-consumer, anti-taxpayer and anti-environment."

An attempt by Rep. Lois Capps, D-California, to strip the MTBE assistance from the energy bill was defeated, 219-213.

Capps said groundwater contamination from the gasoline additive has affected more than 1,800 community water systems in 29 states with a potential cleanup cost of $29 billion.

MTBE makers, including large oil companies and refiners, dispute that estimate and have argued they need liability protection because of an expected surge in lawsuits.

The MTBE provision has been a top priority of Majority Leader Tom DeLay and Rep. Joe Barton, chairman of the Energy and Commerce Committee, who argue that Congress endorsed the widespread use of the additive when it required gasoline contain an oxygenate to help clean up the air.

Both are from Texas where major MTBE manufacturers are located.

The energy bill would shield these companies from lawsuits claiming that MTBE is a defective product and that the companies knew all along it would cause water contamination problems. At least 80 lawsuits involving MTBE have been filed.

The bill also calls for phasing out MTBE use by the end of 2014 – waiting years longer than MTBE critics say is necessary – and would provide $2 billion over eight years to help the manufacturers find alternatives to the additive.

The MTBE issue was the reason Democrats blocked approval of energy legislation in the Senate in 2003 as they waged a filibuster against the provision. A similar protest is expected this time as well.