WASHINGTON — With the price of oil and gasoline at record levels and sure to be a campaign issue in the fall, Congress is moving on a host of energy-related measures.
Most of them, however, sound good but won't significantly boost production or lower prices in the near or even medium term. Some tax measures would encourage the development of alternative fuels, but these are only the first steps on what will be a long path.
The first to reach the president's desk was a measure to halt temporarily the placement of any more oil into the Strategic Petroleum Reserve while crude oil prices remain high. President Bush opposed the measure, but he signed the bill on Monday because it passed with wide support from both Democrats and Republicans.
Here's a look at some of the energy legislation now in play:
BIOFUELS: The Senate this week overrode President Bush's veto of a massive farm bill, and that means a host of ethanol-related measures will become law. These include a production tax credit of $1.01 per gallon through the end of 2012 for cellulosic biofuels — which are made from wood chips, switch grass and other non-food feedstocks.
Ethanol producers that make their bio-fuel from corn or other food products will see their tax credit reduced by 6 cents, to 45 cents per gallon, to reflect this segment of the industry's maturity. To protect U.S. producers from foreign competition, the farm bill extends an expiring tariff on imported ethanol to 2010.
ENERGY TAXES: Senate Democrats in early May announced plans to move legislation that would impose a windfall profits tax on oil companies. They propose a 25 percent tax on profits above what is "reasonable." It would apply only if these profits aren't reinvested in finding new renewable sources of energy or expanding refinery capacity.
Many of the largest refiners already have begun or are planning to expand U.S. capacity to refine crude oil into gasoline. Oil executives warned Congress this week that such a tax would reduce investment and drive prices higher. If it passes, President Bush is likely to veto it, and Senate Democrats don't appear to have enough Republican votes to override him.
The Senate Democratic energy tax plan also calls for rolling back about $17 billion in oil industry tax incentives. A similar measure passed the House of Representatives last year, but such an effort is hard to get through the Senate because its rules allow a single senator to block legislation.
EXPANDING OIL EXPLORATION AND PRODUCTION: House and Senate Republicans have offered a counter to the tax plan that calls for opening Alaska and the U.S. coastlines to greater oil and natural gas exploration and production. It, too, is unlikely to pass in an election year. It's estimated, though, that opening the Arctic National Wildlife Refuge to the oil industry would reduce crude oil prices, now more than $130 a barrel, by about 75 cents a barrel.
GASOLINE TAXES: Presidential hopefuls Sens. Hillary Clinton, D-N.Y., and John McCain, R-Ariz., both have called for a temporary gasoline tax holiday this summer that would offer consumers a break from the 18.4-cent federal tax on every gallon of gasoline. Clinton would offset the lost revenue by taxing the major oil companies; McCain hasn't said how he'd pay for it. The proposal appears to be going nowhere in Congress.
NEW TAX INCENTIVES: A tax bill that includes $17 billion in energy tax incentives for the development of renewable energy resources — some of them overlapping what's in the farm bill — passed the House on Wednesday. But the margin, 263-to-160, wasn't veto-proof, and the bill's prospects in the Senate are uncertain, at best.
OPEC: The House on Tuesday passed by a large veto-proof margin a bill that would empower the Justice Department to bring antitrust action against nations that belong to the oil cartel OPEC. This measure passed the House last year, too, only to be stripped out of Senate energy legislation.
The House bill orders the Justice Department to create a Petroleum Industry Antitrust Task Force. Beyond looking at OPEC activities, it would examine price gouging by gas station owners, manipulation of futures markets by energy traders and the pricing practices and rationale behind decisions made by petroleum refiners.
President Bush has hinted that he may veto the legislation, and many experts doubt that a foreign government could be sued in U.S. court for alleged manipulation of its own oil supplies and prices.
Presidential hopeful Clinton supports the legislation, dubbed NOPEC, and vows that if she were elected she'd use the World Trade Organization to fight OPEC's price-setting abilities. The NOPEC bill's sponsor in the Senate, Wisconsin Democrat Herb Kohl, got the measure through the Judiciary Committee last year, but its fate in the full Senate remains unclear.
ENERGY TRADING: Top Democrats and Republicans oppose a provision in the tax bill to pay for the renewable energy tax breaks by no longer allowing hedge fund managers, who invest money on behalf of the ultra wealthy, and others who're in the employ of offshore corporations, to defer taxes on their compensation.
When Congress overrode President Bush's veto of the farm bill, it allowed a provision in the legislation to take effect. The provision closes what's called the "Enron Loophole," which limited regulators' oversight of electronic trading of contracts for future delivery of oil.
Legislation that passed in 2000, thanks in part to lobbying by now-defunct energy giant Enron Corp., gave regulators little ability to look at electronic trading of futures contracts. Much of this trading is done on lightly regulated overseas exchanges.
The 2006 collapse of a major hedge fund, Amaranth Advisors, spotlighted how a single investor could build up large positions outside the reach of regulators and influence what consumers pay to heat and cool their homes.
ON THE WEB
Read more about the savings from opening the Arctic National Wildlife Refuge to oil exploration and production.