By Debra DeHaney-Howard
October 31, 2005

Following narrow approval in the House of Representatives last month, the Senate is now debating legislation to encourage the building of new oil refineries. At issue for mayors and other local and state officials are proposals to preempt local authority and rules in the siting of new facilities.

Under the House bill (HR 3893), the Department of Energy would be in charge of permitting for new refineries without any consideration of existing authorities and permits. This was previously handled by the EPA. The House bill also gives the President the authority to construct a refinery on a closed military base and also requires all court cases over siting issues to be heard in the Federal Court of Appeals in the District of Columbia – not the State or local district courts.

The Conference of Mayors and its coalition partners – National Association of Counties, National Conference of State Legislatures, and National League of Cities – are working to keep similar language out of Senate legislation, and to make sure preemptions do not make it into any final bill sent to the President.

The overall legislation (S.1772), The Gas PRICE Act, which was introduced in late September amid growing concern over high gas prices and oil refinery capacity issues from Hurricanes Katrina and Rita, seeks to build new refineries on closed military bases, streamline the refinery permitting process (with strict timelines) for both new and expanded facilities, preempt the authority of state courts in favor of federal courts in permitting cases, and authorize the Environmental Protection Agency (EPA) Administrator to temporarily waive fuel requirements and holds states harmless for accounting for emissions associated with a fuel waiver.

The Senate Environment and Public Works (EPW) Committee held a markup of its refinery legislation (S. 1772) on October 27, but failed to get enough votes to move it out of committee. The 9-9 vote stopped the legislation from advancing to the Senate floor, which can only do so now through a procedural move. Voting against the proposal were all eight Democratic members of the Committee as well as Senator Lincoln Chafee (RI).

The Senate bill does not contain preemption language as severe as in the House bill. However, the local and state coalition did provide comments to the EPW staff on several issues, including concern with the judicial review language in the bill and also the possibility of conferencing S. 1772 with the House bill.

In the mark up, Senator Jim Jeffords (VT), the ranking member of the EPW Committee offered an amendment that would establish a Strategic Refinery Reserve, which would provide fuel under emergency situations. Under the Jeffords amendment, the EPA, in consultation with the Department of Energy, would design and construct or reopen closed refineries to provide oil to the Federal Government, State and local governments, and the general public during severe energy supply interruptions. The amendment was defeated by a vote of 8-10.