Mr. Speaker, I thank the gentleman for yielding me this time. I rise in opposition to this rule. The State of California sends $50 billion more to the Federal Government while getting nothing in return for that $50 billion. With this bill,…
Mr. Speaker, I thank the gentleman for yielding me this time. I rise in opposition to this rule. The State of California sends $50 billion more to the Federal Government while getting nothing in return for that $50 billion.
With this bill, Californians are being asked to sacrifice even more while getting nothing in return. Here are some examples: according to the Department of Energy, the bill will raise gasoline prices by 8 cents a gallon. I think that that is an outrage.
The bill's MTBE liability waiver will let refiners off the hook for cleaning up drinking water that has been contaminated by their product. Local governments are going to have to pay the entire cost. And the CBO has said this is an unfunded mandate.
The bill will undermine the ability of States to ensure that liquefied natural gas terminals are sited and operate safely. The bill will undermine States' appeals rights under the Coastal Zone Management Act.
The bill paves the way for building energy facilities on the outer continental shelf, including areas subject to gas and oil drilling.
In listening to State leaders about this bill, I could not find anyone, from the Governor on down, who has said that this is a wonderful bill and it should be supported and passed. Instead, I have heard many concerns, from the Lieutenant Governor, from members of the Governor's cabinet, the attorney general, the coastal commission, the Public Utilities Commission, local governments, and water utilities.
Mr. Speaker, I will include in the Record a packet of letters from the coastal commission, the California PUC, the lieutenant governor, and the California Ocean Protection Council.
Under this rule, I do not think we even have the opportunity to debate and vote on the most important amendments dealing with them.
I ask my colleagues, particularly my California colleagues, to join me in voting against the rule and the underlying bill.
The letters previously referred to are as follows:
House of Representatives,
Washington, DC, April 19, 2005.
Re House Consideration of Comprehensive Energy Legislation.
Hon. Arnold Schwarzenegger,
Governor, State Capitol Building,
Sacramento, California.
Dear Governor Schwarzenegger, On April 13th, our committees
(the House Committee on Energy and Commerce and the House
Committee on Resources) completed work on elements of a
comprehensive energy bill that will come before the full
House of Representatives as soon as April 20th.
After participating in the debate and reviewing the
products that emerged from our respective committees, we
foresee serious dangers for the State of California if this
legislation is enacted.
While the delegation has received your letter supporting
the removal of the participant funding section from the
electricity title of the bill, we have not heard from you
about other provisions that will more directly and
immediately affect California. As we and other members of the
delegation determine how to best represent the interests of
our State, we believe it's important to understand your views
on some of the key provisions before us as well as your
overall position on the legislation.
Most of the elements of the legislation are not new. They
were part of the conference report on H.R. 6, which was
considered by the House and Senate in 2003. Among the few new
provisions are those that would further disadvantage our
State. We've described below some of the provisions that we
consider most troubling for California.
Liquefied Natural Gas (LNG) Facility Siting (new provisions)
The bill will hand over exclusive jurisdiction for the
siting of liquefied natural gas (LNG) facilities to the
Federal Energy Regulatory Commission (FERC), preventing the
states from having a role in approving the location of LNG
terminals and the conditions under which these terminals must
operate. In addition, states will have to seek FERC
permission before conducting safety inspections, and they
will be barred from taking any independent enforcement action
against LNG terminal operators for safety violations.
Finally, for the next six years, LNG terminal operators
will be allowed to withhold underutilized capacity from
other LNG suppliers. In other words, LNG terminal
operators can legally exercise market power to drive up
the cost of natural gas. When the El Paso Corporation and
its independent affiliates allegedly conspired to withhold
natural gas pipeline capacity in order to inflate the
costs of natural gas and electricity in California in 2000
and 2001, the State sought relief from FERC and the
courts. E1 Paso eventually agreed to a $1.5 billion
settlement to partially compensate California consumers
for its anticompetitive actions. Under this bill, it would
become legal for an LNG terminal operator to engage in
similar anticompetitive behavior.
For these reasons, the provision is unanimously opposed by
the California Public Utilities Commission, which, as you
know, is fighting FERC in the courts for jurisdiction over an
LNG terminal in the heart of the Port of Long Beach. This
provision is also opposed by the California Ocean Protection
Council, which includes two members of your cabinet, and the
California Coastal Commission.
Erosion of States' Rights Under the Coastal Zone Management Act (CZMA)
(provisions from H.R. 6)
The bill weakens California's rights under the Coastal Zone
Management Act to object to a FERC-approved coastal pipeline
or energy facility project when the project is inconsistent
with the State's federally-approved coastal management
program. Currently when there is a disagreement about a
project, the Secretary of Commerce, through an administrative
appeals process, determines whether and under what conditions
the project can go forward. States can present new evidence
supporting their arguments to the Secretary. Under this bill,
states will not be allowed to present new evidence to the
Secretary, and the Secretary will not be allowed to seek out
evidence on his or her own. The Secretary will only be
allowed to rely on the record compiled by FERC. Furthermore,
the bill imposes an expedited timeline for appeals, which may
not allow a full review of the facts. The California Coastal
Commission and the California Ocean Protection Council oppose
this provision.
Energy Related Facilities on the Outer Continental Shelf (OCS)
(provisions from H.R. 6)
The bill will give the Department of Interior permitting
authority for ``alternative'' energy projects, such as wind
projects, situated on the Outer Continental Shelf (OCS). It
also grants the Department of Interior authority to permit
other types of energy facilities, including facilities to
``support the exploration, development, production,
transportation, or storage of oil, natural gas, or other
minerals.'' These facilities could be permitted within
coastal areas currently subject to congressional moratoria on
oil and gas leasing. (Again, both the California Coastal
Commission and the California Ocean Protection Council have
indicated that they oppose this provision.)
Ethanol Mandate (provision from H.R. 6)
The Clean Air Act's two percent oxygenate requirement
forces refiners selling gasoline in California to blend more
ethanol into their fuel than is needed for air quality
purposes. Instead of improving air quality, the unnecessary
use of ethanol is increasing pollution in parts of the State,
according to a preliminary report from the California Air
Resources Board. The oxygenate requirement is also adding to
the cost of fuel. Last year, you asked the U.S. EPA to waive
the oxygenate requirement, and last week, 50 members of the
California congressional delegation reiterated support for
your request in a letter to Acting EPA Administrator Stephen
L. Johnson.
Under the energy bill coming before the House, however,
California refiners will have to blend even more ethanol into
their gasoline or pay (in the form of credit purchases) not
to use it. Two years ago, a Department of Energy analysis of
this provision indicated that it could add more than 8 cents
to
the cost of a gallon of gasoline. In a time of skyrocketing
gas prices, this new mandate amounts to hidden tax on
California motorists, which will subsidize a single industry
located largely in the Midwest.
While some have argued that the ethanol mandate will be a
boon to California agriculture, we see no evidence to support
this argument. According to the U.S. Energy Information
Administration (EIA), the ethanol mandate will greatly expand
production of corn-based ethanol, but only 0.2% of the
nation's corn is produced in California. More important, EIA
projects that the ethanol mandate will result in no increase
in the production of cellulosic ethanol (ethanol made from
agricultural and forestry residues and other resources),
which is the primary type of ethanol that can be produced in
California.
MTBE Liability Waiver and Transition Fund (provisions from H.R. 6)
The bill provides liability protection for the producers of
the gasoline additive MTBE, hampering the efforts of local
governments, water utilities, and others to hold producers
and oil companies responsible for the costs of cleaning
drinking water supplies that have been contaminated by MTBE.
In California, South Lake Tahoe and Santa Monica have been
able to reach settlements with the industry for the cleanup
of their drinking water after successfully arguing that the
industry sold a defective product. If the liability
protection in the bill is enacted, then MTBE will be deemed a
safe product and the industry will be relieved from virtually
any obligation to pay cleanup costs. In June 2003, fourteen
state attorneys general wrote in opposition to this
provision, and the provision has been opposed by the U.S.
Conference of Mayors, the National League of Cities, the
National Association of Counties, the National Association of
Towns and Townships, and the Association of California Water
Agencies, among others.
Refinery Revitalization (new provisions)
This bill includes language which will require the
Secretary of Energy to designate ``refinery revitalization
zones'' in areas that have experienced mass layoffs or
contain an idle refinery and have an unemployment rate that
exceeds the national average by 10 percent. In areas that
meet these criteria, the Secretary of Energy is given
authority to site a new refinery within six months of
receiving a petition for approval. The criteria outlined in
the language would result in much of California being
designated a ``refinery revitalization zone,'' from Imperial
to East Los Angeles and north of San Jose. In fact, more than
half of California's 53 congressional districts would be
subject to these provisions.
This language erodes the state, air board and communities
permitting and enforcement authority for these refineries by
granting sweeping new authority to the Department of Energy.
The Department is empowered to coordinate and set binding
deadlines for all federal authorizations and environmental
reviews, including those currently conducted by air quality
management districts. The Department of Energy, however, is
not trained and experienced in issuing air permits and is not
familiar with the various rules implemented by local agencies
as part of the State Implementation Plan (SIP) required by
the Clean Air Act. For these reasons, the South Coast Air
Quality Management District has expressed serious
reservations about this provision.
Preempting California Appliance Efficiency Standards (new provision)
An amendment added to the bill in the Energy and Commerce
Committee will preempt California's new efficiency standards
for ceiling fans, pending the implementation of a federal
standard. The U.S. Department of Energy has been notoriously
slow in propounding efficiency standards, falling years
behind statutory deadlines for setting or updating efficiency
standards for other appliances, such as air conditioners.
Preempting California and forcing it to wait indefinitely for
a federal standard runs completely against the State's effort
to reduce electricity demand. Indeed, the ceiling fan
standard is part of a California Energy Commission demand
reduction package that will reduce peak power demand by 1,000
megawatts within 10 years, saving consumers $75 a year in
energy costs and conserving as much power as can be generated
by three large power plants.
Hydroelectric Dam Relicensing (provisions from H.R. 6)
The bill restructures the hydroelectric relicensing process
to give special preference to dam operators. Other parties
with legitimate interests in relicensing, including states,
tribes, conservationists, farmers, and fishermen, would not
be afforded the same opportunities.
Under current law, federal resource agencies can impose
conditions on a hydroelectric license for the protection of
natural resources and wildlife. Under the bill a dam
operator, and only a dam operator, will be entitled to a
trial-type hearing before a resource agency to dispute the
evidence that the agency uses to justify placing conditions
on a license. The bill also requires resource agencies to
accept alternative license conditions proposed by a dam
operator. Otherwise, the agencies must meet nearly impossible
standards to justify a decision to deny the alternative.
River resources belong to more than dam operators. With
licenses that last for up to 50 years, relicensing is one of
the few chances to make sure that resources are adequately
protected for all stakeholders. In California, there are more
than 300 federally-regulated hydroelectric dams; over 200
will undergo relicensing in the next 10 to 15 years. Denying
all stakeholders equal footing in the process is
fundamentally unfair and is a recipe for protracted
litigation.
Conclusion
We believe there are many other aspects of the legislation
which will have a negative impact on our State, but these
provisions clearly run contrary to the interests of
California, and we believe they will undermine the policies
and positions the State is pursuing under your
Administration. Before the delegation votes on this
legislation, Members should have the benefit of your views on
these provisions and the bill as a whole. This legislation is
too important a matter for the nation's largest state to be
silent on.
Although time is short, the issues we've outlined have been
in the public domain for the past several months, going back
to November 2003 in most cases. Therefore, we ask for your
input before the House votes on this legislation this week.
Thank you for timely consideration of this important request.
Sincerely,
Anna G. Eshoo,
Committee on Energy and Commerce.
Henry A. Waxman,
Committee on Energy and Commerce.
Lois Capps,
Committee on Energy and Commerce.
Grace F. Napolitano,
Committee on Resources.
George Miller,
Committee on Resources.
Hilda L. Solis,
Committee on Energy and Commerce.