Democrats find energy legislation vexing | McClatchy Washington Bureau

WASHINGTON — Oil prices flirt with $100 a barrel, gasoline costs more than $3 a gallon and home heating bills are soaring. Yet the Democrats who control Congress are struggling to pass energy legislation that the public considers a no-brainer.

What's the problem? Complex energy issues cut across party, regional and leadership lines. But for Democrats, there's an added difficulty because the energy debate pits some of their key constituency groups against each other.

AFL-CIO chief John Sweeney cited "good paying jobs for American workers" when he sided earlier this month with nuclear power plant operators in favor of loan guarantees for them worth billions of dollars — against the wishes of environmental groups, another Democratic constituency group.

The United Autoworkers Union is opposing environmentalists' attempts to impose higher fuel-efficiency standards because auto manufacturers insist that the standards would threaten manufacturing jobs.

"Energy has never been a partisan issue. ... There are so many competing regional and economic differences that it just makes it tough," said Bill Wicker, the spokesman for the Senate Energy and Natural Resources Committee, run by Sen. Jeff Bingaman, D-N.M. "There's a reason why Congress historically has attempted to pass omnibus (energy) legislation once a decade."

House of Representatives and Senate leadership staffers have met over the past two weeks to try to forge compromise on a comprehensive energy bill. To ease the process, perennial bill-killers such as oil drilling offshore and in Alaska's wildlife refuge aren't included.

Still, lawmakers remain divided on tough issues such as raising vehicle mileage standards, creating new production goals for alternative energy sources and deciding whether nuclear energy should be in the mix.

"It's clear the American people need cars to go further on a gallon of gas. ... It's outrageous that it's being bogged down like this, and there's really no reason it (Congress) shouldn't move forward as quickly as possible with a good clean-energy bill," said Julia Bovey, a spokeswoman for the Natural Resources Defense Council, an environmental lobby.

But it's not easy. While some energy issues, such as taxing oil companies, break down along party lines, others, such as renewable energy, are regional issues, and still others affect the special interests of powerful lawmakers.

Consider a proposal to increase Corporate Average Fuel Economy standards, commonly called CAFE standards. House legislation is silent on this, but the Senate has passed a bill to boost vehicle mileage standards by 40 percent to 35 miles per gallon by 2020.

Automakers are unhappy, especially about a provision to apply this 35-mpg requirement to cars and trucks separately. Carmakers currently offset the low mileage on their gas-guzzling trucks and SUVs with cars that sell for far less but get better mileage. They do this by coming up with a dubious fleet-wide average, a practice that the Senate bill would stop.

In the House, carmakers have a powerful Democrat in their corner — Michigan Rep. John Dingell. Dingell is the chairman of the House Energy and Commerce Committee and has represented his district of Dearborn, home to Ford Motor Corp., since 1955. Dingell is at odds with House Speaker Nancy Pelosi, who's from conservation-minded California and advocates tougher fuel-efficiency standards.

"Upon careful evaluation, and after many discussions, it is my view that a compromise can be reached using the language passed by the Senate," Dingell wrote Pelosi in a Nov. 13 letter published on his Web site.

But, Dingell said, trucks and cars must continue to be treated differently when considering fuel efficiency. And there should be long transition periods to higher fuel standards with government financial support to automakers "so they can stay in business and accomplish this significant national objective successfully."

It sounded as if Dingell expected others to compromise.

The UAW also joined the fray, warning that proposed changes in mileage standards could invite automakers to shift production abroad. That's because the Senate didn't sufficiently distinguish between domestic and foreign-made autos when advocating a single fuel-mileage standard.

Dingell and many Republicans also dislike Senate provisions that mandate greater use of renewable fuels, such as ethanol. The Senate bill proposes that 36 billion gallons of bio-fuels be blended into U.S. gasoline supplies by 2022, and it sets aside nearly $1 billion in support of such production.

Citing a frequent criticism leveled by the oil industry, Dingell noted in his letter that "we must be sensitive to the effect that ethanol production may have had on food prices and the environment in the last two years."

As land was set aside for corn production to meet past bio-fuels goals, it's driven up the price of soybeans and other products because they've become scarcer as corn production soared.

Democrats also disagree on House legislation to require that electricity providers get 15 percent of their power generation from renewable sources, including wind, solar, geothermal and the like. Lawmakers from Southern states fear this target is unrealistic since they aren't able to generate wind power as northeastern states do.

Nuclear energy lurks as another potential deal killer.

Sen. Pete Domenici, R-N.M., is lobbying colleagues for an amendment to have the federal government provide huge loan guarantees for new nuclear plants. If a company pays 20 percent of the costs, the government would provide loan guarantees for the remaining 80 percent of associated debt.

"In dollar terms, they are very large (projects), $5 billion or $6 billion. They're almost beyond the financing capabilities of the companies," said Richard Myers, vice president of policy development for the Nuclear Energy Institute, the trade group for nuclear power. "It's just too large a capital investment to undertake" without support.

But critics complain that costly nuclear plants would crowd out loan guarantees for emerging technologies in favor of a mature, unpopular industry.

"It's a sign of a technology that's not making it in the marketplace and is basically looking for taxpayer support to reassure investors that they won't lose their shirt if they lend money for construction of new nuclear reactors," said Alden Meyer, director of policy for the Union of Concerned Scientists.

If Domenici can't attach loan guarantees to the energy bill, he can still peg them to a big farm bill that includes ethanol provisions or to must-pass spending bills.

The senator in 2005 shepherded through a GOP-led Senate the first major energy package since 1992. His spokesman, Matthew Letourneau, said Democrats are now finding out how difficult that effort was.

"With gas prices being what they are right now ... the climate out there is conducive to action on energy," he said. "But it remains to be seen whether Democrats will ... compromise on some of these issues."