Thursday, March 02, 2006

Bayh Plan Seen As Sensible Step

Bayh Plan Seen As Sensible Step
To Reduce Dependence On Foreign Oil

for Howey Political Report March 2, 2006

Over the years, Republican Richard Lugar has wielded significant influence over development of the nation's energy policy, but these days it's a plan proposed by Democrat Evan Bayh that is seen by many in Congress and industry as a sensible step in the effort to reduce the nation's dependence on foreign oil.

The list of senators who have signed on as co-sponsors of S.2025, known as the Vehicle and Fuel Choices for American Security Act, includes the likes of Lugar, Joseph Lieberman (D-CT), Obama Barack (D-IL) and Sam Brownback (R-KS). The two most recent co-sponsors, Republicans Lincoln Chafee (RI) and Johnny Isakson (GA), bring the total number of senators onboard to 11.

Pressure is building for Washington to act on the issue before a natural or manmade crisis causes crude oil to spike to $100 a barrel or worse. Economists, CEOs and risk analysts say the danger of runaway energy prices is the top threat to national and global economic security. A lack of spare output capacity and growing worries over geopolitics are making matters worse (Wall Street Journal).

On Tuesday, both Indiana senators took part in a closed-door discussion, attended by military and business leaders and a bipartisan coalition of senators, that was organized by Securing America's Future Energy, an organization committed to reducing dependence on oil. Afterward, Bayh's office issued a press release indicating that his energy plan was among items discussed.

According to Bayh's office, the legislation introduced in November would reduce the amount of oil Americans use by 2.5 million barrels per day in 10 years - the same amount the country currently purchases from the Middle East. Ultimately, Bayh's plan would reduce American oil consumption by 7 million barrels a day. The proposal would:

• Push for the development and mass marketing of hybrid technologies, including hybrids that give drivers the option to plug them in at night;

• Encourage the construction of more alternative fuel pumps at gas stations;

• Include, for the first time, fuel-efficiency standards for semi trucks;

• Offer standards to ensure fuel efficient replacement tires are offered for cars and trucks; and,

• Provide tax credits for manufacturers to retool facilities for advanced technology and alternative fuel cars and trucks.

While the plan has received support from a wide range of interests, some say any government meddling will only make the problem worse. When President Bush's State of the Union address called for federal support of research and development, for example, Ben Lieberman of the Heritage Foundation responded, "Rather than expand government interference in energy markets and pick winners and losers from among emerging technologies, Washington should get out of the way and let market forces work." Lieberman advocates reducing or eliminating regulations impacting refineries, exploration and drilling.

Any mention of alternative fuels - particularly ethanol - often incites considerable opposition as well. "In a capital city that is full of shameless political scams, ethanol is perhaps the most egregious," wrote Kevin A. Hassett of the American Enterprise Institute, also in response to the President's speech. Hassett asserts an oft-repeated litany: ethanol is a costly and less efficient fuel that contributes to air pollution.

Recent studies indicate Hassett and like-minded critics may be wrong - new technologies are improving production efficiency and creating a better fuel. An analysis by the Argonne National Laboratory in May found that ethanol can help reduce use of fossil fuels in transportation, and concluded that some types of ethanol achieve much greater energy and greenhouse gas benefits. The Sacramento Bee reports that biomass energy firms say big-time investors are starting to take note - including Bill Gates, who put $84 million into Pacific Ethanol, a company headed by former California Secretary of State Bill Jones.

The nation's energy needs were on the minds of a dozen senators - including Bayh and Lugar - when they met with President Bush in the residence of the White House Feb. 15. Bayh said he urged the president to support his bill, which is currently before the finance committee.

"The energy plan I offered this fall provides real steps that will reduce our oil consumption by the same amount we currently purchase from the Middle East," Bayh later said in a statement. "It's supported by Republicans and Democrats alike, and during our meeting, I urged the President to support my plan. If he does, my bill could become law in a matter of weeks."

Attending Port Meetings Today

Sen. Bayh's office released a statement yesterday afternoon indicating the senator will attend a Banking Committee hearing today on the Dubai takeover of American ports. On Tuesday, Bayh introduced legislation to ensure that homeland security concerns are addressed before business deals involving foreign countries are considered (see HPR, Feb. 23).

On Monday night, the senator will be featured speaker at a gala banquet of the policy conference of the American Israel Public Affairs Committee, a pro-Israel lobby group. Then, on March 13 he will keynote the Georgia Democratic Party's Jefferson-Jackson Dinner, the state party's main fundraising event, which typically draws 1,500 to 2,000 Democratic officials and activists, according to


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