Congressman Hopeful Energy Policy Will Pass
Carter, Ray, THE JOURNAL RECORD
Third District Congressman Wes Watkins, R-Stillwater, said he remains optimistic that a national energy policy will pass Congress before adjournment this year, but cautioned that the issue remains contentious.
"I think we could pass that in the right form," he said.
Speaking to members of the International Society of the Energy Advocates in downtown Oklahoma City on Tuesday, Watkins said several major issues must still be addressed before an energy bill passes both chambers of Congress.
Both the House and Senate have passed versions of the energy bill covering a wide range of issues, but disagreements over Alaskan drilling and tax incentives for energy producers are slowing progress in the conference committee on the bill, Watkins said.
One of the major differences in the two bills is the amount of tax incentives provided to encourage new energy production. The House bill provided $35 billion in tax incentives over the next 10 years while the Senate version provided $15 billion in tax relief over the same period of time.
One of the biggest tax incentives included in the House bill is language allowing accelerated depreciation for projects built on Indian lands (including roughly two-thirds of Oklahoma), Watkins said.
The provision reduces the depreciation schedule for projects on Indian lands from a 20-year schedule to just 12 years.
The accelerated depreciation schedule became law in past sessions but it is set to expire soon. Watkins is seeking to have the depreciation language left intact until Dec. 31, 2004.
Accelerated depreciation has led merchant power producers to obtain permits to build nearly 20 new plants in Oklahoma. (Construction of a single power plant costs hundreds of millions of dollars.)
"That's an investor's dream to be able to make that kind of investment and be able to get that kind of return," Watkins said.
He said the accelerated depreciation schedule is having a positive economic impact of about $300 million a year in Oklahoma.
"That one provision provides more (economic) incentive than all of the state incentives today," Watkins said.
However, many lawmakers remain opposed to passage of an energy bill, Watkins said. He noted that support for a national energy policy was growing less than two years ago, which made enactment seem certain. When California experienced rolling blackouts and New York faced similar problems, the hand of energy advocates was temporarily strengthened.
"When blackouts occurred, we had even the California congressmen and senators wanting to do something about energy," Watkins said.
But the collapse of Enron and allegations that the trading giant had manipulated the California energy market reversed momentum, he said. …