By Debra DeHaney-Howard
March 1, 2004

Senator Pete Domenici (NM), Chair of the Senate Energy and Natural Resources Committee, introduced new energy legislation February 13 that eliminates the "safe harbor" language that provides liability immunity to the producers of gasoline containing the fuel additive methyl tertiary butyl ether or MTBE. It also reduces the tax package to $14 billion — both which were seen as reasons why the comprehensive energy bill, House'senate conference report H.R. 6, stalled in the Senate last year.

The new bill, S.2095, was introduced under Senate Rule 14, which means it will be immediately put on the Senate calendar and may be brought to the Senate floor for consideration at any time, by-passing the committee process. The bill retains all other major elements of the original Senate bill, including its electricity title, which contains language that addresses electricity reliability issues, and gives the Federal Energy Regulatory Commission eminent domain to override state regulators and issue permits for interstate transmission lines in bottleneck areas.

The new changes address concerns raised by a number of groups, including the Conference of Mayors about the controversial MTBE provision in last year's energy bill, H. R. 6. Under H. R. 6, which passed the House last November, state and local governments would be prevented from bringing "defective product" lawsuits against the manufactures of MTBE, which some cities have employed to recapture the cost of clean up. The cost to clean up MTBE contamination nationwide is estimated to be at least $29 billion. Any legislation enacted containing MTBE liability protection would be the largest unfunded mandate passed down from Congress to local taxpayers in recent years. At least 500 public drinking water wells, 45,000 private wells across the nation are contaminated, and 140,000 underground storage tanks still leak the gasoline additive.

In addition to removing the MTBE liability provision, the new proposal includes the tax package passed by the Senate Finance Committee in May 2003. Reductions made bring the tax package to a spending level of about $14 billion over 10 years. Provisions removed include $3 billion for energy savings performance contracts; $1.5 billion in royalties for ultra deep oil and gas exploration; $1.1 billion for restoration efforts on the Gulf Coast; $145 million for the Army Corps of Engineers; and $94 million for uranium sales.