Energy Company Policy

The Progressive, June 2005 | Go to article overview
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Energy Company Policy

George Bush's idea of an energy policy is to dish out goodies to his buddies in the oil, gas, coal, and nuclear power industries, hold hands with Saudi Crown Prince Abdullah, and send the U.S. Army to Iraq. He pays lip service to energy independence but provides no way to get there. He slights conservation. He starves research into safe and renewable alternative energies. Meanwhile, he despoils our pristine places and contaminates our air and water.

The House energy bill, which the Administration shepherded through on April 15, reveals the Bush approach in all its shabby details. And his energy speech almost two weeks later, while more high-minded in its rhetoric, reinforces this retrograde path.

Bush has a seemingly unquenchable desire to dole out favors to the oil giants, which have amassed enormous profits as petroleum sells at $50 a barrel. In the first quarter alone, the four biggest companies--ExxonMobil, Royal Dutch/Shell, BE and Chevron-Texaco--earned $97 billion in profits combined. Yet the House rewarded energy companies with at least $12 billion in tax breaks and subsidies. Even Republicans admitted that these wouldn't do much to lower prices at the pumps.

But it's Christmastime year round for big business. Bush and Tom DeLay piled high the presents in the House bill. And these go way beyond drilling in the Arctic National Wildlife Refuge, a foolish proposal that will amount to just a drop in the global bucket.

Here are some of the hidden goodies:

The House bill "allows corporations drilling for oil on public land to forgo paying cash royalties to taxpayers," Public Citizen notes in a detailed analysis. Instead, the companies will self-report the amount of oil they are producing and then provide in-kind contributions to the government--a recipe for cheating.

It "allows energy companies to be reimbursed by taxpayers for part of the costs of complying with federal environmental laws," says Public Citizen.

It caps the liability that the nuclear industry would face in case of a serious accident.

And it gives special dispensation to some pals of DeLay, providing up to $2 billion "in direct payments to oil and natural gas corporations to drill in deepwater wells." The bill designates one company, Texas Energy Center, based in DeLay's hometown of Sugar Land, to be responsible for dispensing the money to the companies. Six executives of the Texas Energy Center have given $8,000 to DeLay's campaign in the last year, Public Citizen notes.

But more than just slopping out the pork in a frenzy of crony capitalism, Bush and DeLay set about the task of dismantling the system of energy regulation that has been in place since the end of the Great Depression. Nowhere is this clearer than in the field of liquefied natural gas.

The House bill strips states of almost all of their rights to regulate this field. "It radically limits the ability of states to have adequate jurisdiction over the permitting and siting" of liquefied natural gas facilities inside their own borders, Public Citizen warns. States now would be able only to "consult" with the Federal Energy Regulatory Commission, which would have the final say, So if a state wanted to have tighter regulations than the reds, as California sued to do in 2004, it would no longer have legal grounds to prevail.

Similarly, the bill would give the Federal Energy Regulatory Commission the authority to overrule local and state governments in deciding where to locate electrical transmission and distribution lines.

And it would repeal the Public Utility Holding Company Act of 1935 so that any company could buy into the utility business. This would put up for possible sale "approximately $1 trillion worth of electric generation, transmission, and distribution assets," Public Citizen says. Such a freewheeling auction could easily lead to a situation where ExxonMobil or Wall Street investment houses would gobble up the utility companies.

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