Oiling up the energy bill

As oil prices rise, so do chances for the stalled energy bill to finally get past the Senate.


Amanda Griscom
March 12, 2004 4:40AM (UTC)

U.S. oil prices jumped to their highest levels since the Iraq war this week, hitting $37.51 a barrel, for an average of about $1.74 a gallon -- unwelcome news for those feeling the pinch at the pump, but great news for supporters of the newly overhauled but still-stalled energy bill.

"They've been waiting for something like this -- a blackout, a spike in gas prices, a terrorist attack -- anything to convince a majority in the Senate that they have no choice but to steamroll this energy bill through," said a staffer at the Senate Committee on Energy and Natural Resources.

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Sure enough, on Monday, Sen. Pete Domenici, R-N.M., chair of the ENR committee, reasserted that the energy bill would likely come up for consideration again at the end of this month -- when high gas prices will still be fresh on senators' (or, more to the point, senators' constituents') minds.

Right on cue, a chorus of Bush officials chimed in to play up economic fears: Energy Secretary Spencer Abraham said last week that the administration is "extremely concerned" about gasoline prices and called on Congress to pass the energy bill. His colleague Treasury Secretary John Snow used concern about rising oil prices -- expected to continue their upward trajectory through the summer -- to call for "greater access to reliable and dependable U.S. energy supplies like ANWR."

Support for the energy bill isn't just coming from the GOP -- Senate Minority Leader Tom Daschle, D-S.D., is now among its most enthusiastic proponents. The bill became more palatable to Daschle once deals were struck to remove a controversial provision that would have given liability relief to manufacturers of the fuel additive MTBE, which has contaminated water supplies throughout the nation, and to cut the corpulent $31 billion package to a comparatively lean $15 billion -- though it still channels plenty of pork to polluting energy companies.

Daschle not only expressed support for the new version of the bill, but anticipated bringing along up to six new Democratic yea votes. "It's Sen. Daschle's belief that there's a reasonable chance that this new version will pass when it comes up for reconsideration," his spokesperson, Sarah Feinberg, told Muckraker.

Domenici is equally upbeat: "We're feeling pretty confident," said Marnie Funk, spokesperson for the majority in the ENR committee. "We think we've made the necessary changes to get the bill through the Senate -- changes that will appeal to Democrats who disliked the MTBE issue and the Republicans who were worried about cost. The vote count seems promising."

According to an ENR committee staff member who asked to remain anonymous, Senate Majority Leader Bill Frist, R-Tenn., and Daschle have been getting positive feedback on the Republican side from Sens. Rick Santorum (Penn.), Jon Kyl (Ariz.), Don Nickles (Okla.) and John Ensign (Nev.) -- all of whom had grumbled about the high costs of the original bill.

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But critics of the energy bill are singing a very different tune: "Put your bullshit detector on high alert," said Kevin Curtis, vice president of National Environmental Trust. "We're in election time, and from now to the end of this session it's less and less about passing legislation and more about emphasizing the differences between certain politicians and parties."

Bill Wicker, communications director for the Democratic minority on the ENR committee, adds that he has heard nothing definitive about new votes promised since the energy bill was reworked.

It's no secret that Daschle, for instance, has political reasons to put on a happy face. He's in a tight battle for his Senate seat this year, and the energy bill includes tax subsidies for ethanol production that would increase corn prices by as much as $0.50 per bushel, create an estimated 10,000 new jobs in his state, and generate $620 million for South Dakota's economy, Daschle says. Whether or not the bill is likely to pass, it behooves the senator to convince his constituency that he's making progress pushing it through Congress.

Likewise, Domenici's optimism should be taken with a grain of salt: One senior Republican Senate aide confessed to a reporter at the Albuquerque Journal in Domenici's home state of New Mexico over the weekend that the bill's prospects are not so hot. "The odds of getting an energy bill along the lines of what we have proposed is maybe 25 percent," the aide said.

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Another indication that the forecast is gloomy came in a Monday article in CongressDaily about Senate Republicans with so little faith in the energy bill's passage that they are maneuvering key portions of it onto other pieces of legislation that have better chances of making it to President Bush's desk. Senate Finance Committee chair Charles Grassley, R-Iowa, is orchestrating the process; last month he inserted ethanol tax provisions into a transportation bill, and last week he proposed an amendment to a corporate tax bill that would extend a tax credit for wind energy production for a year. "Both provisions are crucial to maintaining the coalition ... needed to move a large energy bill through the Senate," wrote CongressDaily reporter John Stanton.

But let's say Domenici, Daschle and Frist manage to maneuver the energy bill through the Senate in late March. There's no guarantee that it will then make it past the House. In fact, last week House Majority Leader Tom DeLay, R-Texas, gave the Senate version the big, fat Texas finger, saying it's unacceptable because it doesn't protect MTBE manufacturers, the overwhelming majority of which are in his state. Even after a personal call from Bush entreating him, essentially, to get over himself, DeLay held his ground: No energy bill without MTBE liability relief would get past him.

The situation is rich with irony: DeLay is so committed to his special interests that he's willing to defy his own president; by doing so, he may serve the public interest after all.

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Mines, all mines
In an age when corporate America can't see past its quarterly results, it's hard to imagine how the world's largest gold producer is going to manage the environmental damage caused by one of its mines hundreds or even thousands of years into the future.

That's the challenge Newmont Mining Corp. faces as it proposes to mine gold from a billion tons of rock in the Battle Mountain range of Nevada -- a state which, if it were a country, would rank third in the world in gold production behind South Africa and Australia. Newmont's proposed $200 million project -- called Phoenix, as in rising from the ashes -- would span nearly 10 square miles of northern Nevada, 3,000 acres of which have already been contaminated from 140 years of mining.

The U.S. EPA has predicted that the additional pollution from the proposed Newmont project would befoul the site enough to qualify it for Superfund status. When sulfur in the rock in this area is exposed to air and water from rain and melting snow, it forms sulfuric acid that leaches heavy metals such as mercury and arsenic from surrounding mine tailings or waste rock and contaminates the groundwater.

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The environmental impact statement on the Phoenix mine, prepared by the Bureau of Land Management, estimates that acid mine drainage caused by the project could pollute groundwater for hundreds of years, possibly tens of thousands of years.

The BLM has asked Newmont to pony up money for a "perpetual treatment" trust fund to manage the pollution well beyond the lifespan of the company. Phoenix would be the first major U.S. mining project to commit money to this kind of fund, which is required under mining regulations enacted by President Clinton. (While these regs were weakened by President Bush, the trust fund provision was one of the few elements that remained untouched.)

But the BLM and the EPA have locked horns over how much cash would be necessary to guarantee a successful cleanup.

The BLM's Battle Mountain office agrees with Newmont's estimate of $408,000 -- money they predict would earn on average 9.8 percent a year from investments before taxes. The BLM said the notion of long-term damage is a "worst-case scenario" and noted that the bureau could require additional funding if such a scenario came to pass.

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Newmont spokesperson Doug Hock also dismissed the idea of long-term damage as melodrama. He told Muckraker, "We ran a computer model looking at possible scenarios for any type of groundwater contamination, and the likelihood of any long-term pollution was small."

But the EPA administrator for the Pacific Southwest region, Wayne Nastri, believes the mine's environmental impact could be decidedly more severe, and recommended a whopping $33.5 million, 80 times higher than the BLM's recommendation. Nastri further called into question the BLM's assumption that the trust-fund investment would earn such a high annual return.

In a letter responding to the environmental impact statement on the project, Nastri wrote, "We do not believe [the EIS] conclusions represent a 'worst-case' scenario, as represented by BLM in recent correspondence and discussions ... EPA believes the project will likely create a perpetual and significant acid mine drainage problem requiring mitigation for hundreds of years." Nastri cautioned that pollution from the project could result in an "enormous financial burden" for taxpayers if the Newmont trust fund wasn't beefed up.

But the BLM won out. Last month, the bureau gave final approval for Phoenix and called for a trust-fund allotment of just $408,000, plus a $1 million bond that could be tapped to augment the fund if needed.

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Great Basin Mine Watch, a Reno, Nev., environmental group, plans to appeal the BLM's decision. Its consultants estimate that the trust fund should require upwards of $40 million.

"First of all, I think that planning for perpetual treatment stinks," said Tom Myers, a hydrologist and executive director of the watchdog group. "No project should be permitted that does potentially hundreds, much less tens of thousands, of years of [acid mine drainage] damage."

Still, in the case of the Phoenix project, Myers argued that so much harm has already been done to the site that it may be better to re-mine the sullied land with a new cleanup strategy than to leave it as is. This site has been polluting groundwater for more than a century, he said, and under the Newmont plan there would at least be someone the government and environmental groups could hold accountable.

But the trust fund has to be adequately funded, he emphasized. Myers also pointed out that Nevada is fighting tooth and nail against the federal government's plan to ship high-level nuclear waste from around the country to a site some 90 miles northwest of Las Vegas, but is accepting the Newmont project with scarcely a peep.

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"Nevada has proven that it will fall on its sword to keep from becoming a dumping ground for nuclear waste -- radioactive for hundreds of thousands of years," Myers says.

"Hazardous mining waste should fall under the very same principle of long-term damage, and the state needs to work just as hard to fight it."

Without an adequate cleanup fund, in other words, Battle Mountain could become another Yucca Mountain.

Muck it up

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We welcome rumors, whistleblowing, classified documents, or other useful tips on environmental policies, Beltway shenanigans and the people behind them. Please send 'em to muckraker@gristmagazine.com.

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Amanda Griscom

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