Senate Democrats introduce Consumer-First Energy Act(solution to the high price of gas)

WASHINGTON, DC, May 9 -- US Senate Democrats presented their legislative response to record high oil prices on May 7, introducing their energy bill 6 days after Republicans introduced theirs.

The primary difference between the two measures was apparent in their titles. Republicans called their bill the American Energy Production Act. Democrats named theirs the Consumer-First Energy Act of 2008 and incorporated provisions similar to several in HR 5351, which the House passed by 236 to 182 votes on Feb. 27 largely along party lines.

Those provisions include moving $17 billion in financial incentives from major oil companies to alternative and renewable energy programs, authorizing federal investigation and prosecution of price gouging allegations during a national emergency, and making it possible for the Department of Justice to prosecute foreign oil producers for violating US price-fixing laws.

But the Senate Democrats' measure also would impose a 25% windfall profits tax on oil companies that do not invest in increased capacity or renewable energy sources. It would suspend federal purchases of crude for the Strategic Petroleum Reserve through December unless the 90-day average price fell to $75/bbl or less. And it would attempt to limit oil futures market speculation by keeping traders from routing transactions through offshore exchanges to avoid disclosure, and by substantially increasing margin requirements for oil futures purchases.

'Same failed policies' "Even as it costs Americans more every day to fill up their [gasoline] tanks, Bush Republicans only offer more of the same failed energy policies that brought us to this point," said Majority Leader Harry M. Reid (D-Nev.) at a press conference about the Senate Democrats' bill. "But with this bill, Democrats are protecting consumers. Instead of helping Big Oil make more money at the expense of average Americans, we are forcing oil companies to change their ways. We will hold them accountable for unconscionable price gouging and force them to invest in renewable energy or pay a price for refusing to do so," he said.

Reid was joined by Energy and Natural Resources Committee Chairman Jeff Bingaman (D-NM), Finance Committee Chairman Max Baucus (D-Mont.), Joint Economic Committee Chairman Charles E. Schumer (D-NY), and Energy and Natural Resources Committee members Maria Cantwell (D-Wash.), Byron L. Dorgan (D-ND), and Bernard Sanders (I-Vt.).

"Startling gasoline prices are making it harder and harder for working American families, farmers, and small businesses to make ends meet," Bingaman said. "At a minimum, Senate Democrats are determined to take the short-term steps necessary to send the right signals to energy markets, and to ensure that proper safeguards are in place to protect the American consumer."

Baucus said it was time to repeal tax breaks for major oil companies, while Schumer said a windfall profits tax would force "Big Oil to pay its fair share" while helping to spur innovation. Dorgan, who introduced his own bill to suspend SPR purchases in February, addressed that provision. Cantwell, who for years has pushed for increased federal authority to investigate oil price gouging allegations, said it is time for Congress to pursue vigilant oversight of energy markets "to ensure Americans aren't the victims of a few rogue traders."

Sanders declared, "Record-breaking oil and gas prices are a crisis not only for commuters going to work, especially in rural areas, but also for family farmers, small businesses, truckers, airlines, grocery stores, restaurants, hotels, tourists, and indeed every sector of our economy. The bottom line is this: Congress and the president can no longer sit idly by while Americans are getting ripped off at the gas pump, the economy deteriorates, and ExxonMobil [Corp.], greedy speculators, and [the Organization of Petroleum Exporting Countries] are allowed to make out like bandits pushing oil and gas prices higher and higher."

Initial reactions Robert B. Reich, who was secretary of the US Department of Labor during former president Bill Clinton's administration, issued a statement saying the measure is not a gimmick. "It will genuinely help cut the price of gas at the pump, and it's exactly what hard-pressed Americans need right now," he said. Representatives of a consumer group, Public Citizen, and a liberal think tank, the Center for American Progress, also endorsed the bill.

"New taxes targeting the US oil and natural gas industry would discourage investment in domestic fuel production, threaten US jobs, and penalize the millions of retirees and workers whose pension funds, individual retirement accounts, and 401K investments are invested in oil and natural gas stock," the American Petroleum Institute said in a statement.

"Windfall profit taxes have been roundly criticized as being detrimental to supply," said National Petrochemical & Refiners Association Pres. Charles T. Drevna. "The price gouging provision itself would result in real market manipulation on the part of the federal government, and using the SPR in an attempt to drive prices down fails the nation's security at a time when regional instability threatens global oil supplies. The only people who stand to gain from approval of this bill are state-owned oil entities. With 'solutions' like these, the alleged problems would be better left alone," said Drevna.

Pete V. Domenici (R-NM), the Senate Energy and Natural Resource Committee's ranking minority member and primary sponsor of the Republicans' bill, said, "The Democrats' plan to reduce gas prices is running on empty. Americans don't need more taxes and more investigation—they need more oil and lower energy prices. Yet nothing in the Democrats' plan will produce a single drop of oil," he said.

Republican bill contrast The Republican-sponsored bill, on the other hand, would allow governors of states on the Atlantic and Pacific coasts to petition for federal offshore leasing, which would include revenue shares for the states, authorize federal leasing within the Arctic National Wildlife Refuge, grant the US Environmental Protection Agency authority to accept consolidated applications for permits required to construct new refineries, and repeal three provisions inserted into the Omnibus Appropriations Bill late year imposing drilling permit fees, reducing states' share of revenues and royalties from federal production within the states' borders, and delaying funding formulation of regulations for commercial oil shale leasing for one year.

It also would grant the US Environmental Protection Agency authority to accept consolidated applications for permits required to construct new refineries, suspend crude oil purchases for the SPR for 180 days, and repeal Section 526 of the 2007 Energy Independence and Security Act which bars federal agencies from contracting for alternative fuels with longer greenhouse gas life cycle emissions than the conventional fuels they would replace.

Minority Leader Mitch McConnell (R-Ky.) offered the Republicans' bill as an amendment to a flood insurance bill on the Senate floor soon after Reid and the Democrats announced their bill. Noting that Schumer last week said that another 500,000 b/d on world markets would bring relief at the gasoline pump, McConnell said he agreed, but added, "The difference is [that]I believe we should produce those additional barrels of oil right here in America, with American jobs, to bring prices down.

"The fact is, if President Clinton had not vetoed a bill to open [ANWR] 13 years ago, 1 million bbl of oil would be flowing from ANWR to American consumers every day, twice what the senior senator from New York said would bring relief at the pump," McConnell said.

Wayne Allard (R-Colo.) said the Republicans' bill was a dramatic contrast to the Democrats' measures. "Democrats in both chambers appear beholden to the environmentalist agenda, an agenda that wholly disregards America's economy…. The Congress has stymied efforts to produce trillions of cubic feet of natural gas [and] billions of barrels of oil and prevented the construction of new refineries, new power plants, and new hydroelectric facilities. This is bad economy," he said.

By the end of the Senate's May 7 session, however, it appeared likely that McConnell's amendment and the Democrats' bill would both require 60 votes for approval.

I keep on thinking that whatever Congress did to address the 1973 oil embargo, it didn't get us any closer to energy independence. Does anybody remember what Congress did?

In the meanwhile, I'm keeping an eye on the following development in non-corn ethanol production.

Non-corn ethanol

Also, there's evidence that people might get as much, or more, bang per buck for their gas dollars with gas / ethanol mixtures.

Gas-competitive gas / ethanol mixtures

Finally, I was surprised by the introduction of a machine for making home-made ethanol.

EFUEL100

But watch out for fines for violating biofuel regulations.

Fines for violating biofuel regulations

Geez, what do you have to do, take stupid pills to be a Democrat these days?

If you want to lower the cost of gas, increase supply.

You don’t increase supply by increasing taxes or restricting drilling in known oil reserves.

Duh...

Time to get out the pictures of the long gas lines of the 1970s, and the pictures of gas stations with signs that said "closed-no gas" and start running them on TV and educating people about what happens when we let democrats anywhere near "energy policy".

Democrat "solutions" will always mean more socialism and more pain and suffering for average Americans. A nation of American Idol addicts needs to have that fact driven home to them every single day of every single week of every single month until the November election is over.

Those provisions include moving $17 billion in financial incentives from major oil companies to alternative and renewable energy programs

Uhhhh...if viable alternatives don't currently exist in the mainstream market, how does this help with prices?

Don't give me ethanol...ethanol has failed the global test in it's current incarnation. Massive price increases in food stocks, starvation in the third world and food riots. Thank you Environmentalists! Take a bow.

So where's the relief? Where's the increase in marketable fuel? IT DOESN'T EXIST YET!

Look, Nancy and Harry... You can believe in fairies all you want, but don't wait for one to fly out of your rear. I want to shout "WE BELIEVE", but it's you, Nancy and Harry... and quite frankly, you're incompetent fools.

You’ve got that right..... I refuse to listen to anyone on prices any more unless they advocate more drilling and more refineries. population growth will always grow at a rate faster than conservation. Alternative fuels a bust and will be for the foreseeable future. There is no other choice but to drill for more and add more refineries.

At work I hear whining all the time about prices. Often from the guys that wanted $5/gal a few years ago so we would be forced into alternative fuels. They got what they asked for. without a viable alternative.

The Stupid Party, led by the White House, lost the energy plan PR battle the first time around and is going to lose it again if they don't go on a serious offensive. With almost $4 gas, it shouldn't be too hard, but it is because they're still too worried about being called nasty names by the RATS and the drive-bys. Far beyond that, though, the Republicans don't understand that when there is such a fundamental misunderstanding of supply and demand among the public as there is with oil, the solution is to explain the fundamentals of supply and demand, not assume people will figure it out. They won't. They haven't. They aren't going to go without help.

It's not about coming up with simple slogans and easily understood messages because that's how you get moronica like WIN. (Sorry Gerry, but it really was moronic to see you guys wandering around with those buttons while prices were continuing to spiral.) It's about explaining how markets work, and how energy markets work.

You do that through a combination of short and long explanations. You do that through Republican members of Congress getting out from under their desks and standing up to the RATS and the drive-bys. You do that through a White House press secretary who can present the message in a forceful and coherent fashion rather than a tentative and mumbling fashion.

And you do that by naming names to the people who are responsible for the names standing in the way: the voters who are paying almost $4 for gas while they keep voting for Harry Reid, Ted Kennedy, Nancy Pelosi, Dick Durban, Chuck Schumer, Steny Hoyer, etc. There you can do the 30 second commercial: "Don't like $4 gas? Call Senator Kennedy's office and tell him you want more oil on the market from America's lands and offshore areas. Tell him we need more oil, not more price increases."

Sigh.

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