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House Republicans mull post-Katrina energy bill

September 2, 2005

By Susan Cornwell

WASHINGTON (Reuters) – The U.S. Congress may need

to pass legislation dealing with energy issues, such as

incentives to expand U.S. oil refining capacity, in
response to

Hurricane Katrina, House Republican leaders said on Friday.

“We may be looking at doing another energy bill of some

sort,” House Republican Leader Tom DeLay of Texas told a
news

conference after a meeting with other Republican leaders.

Asked to elaborate, House Speaker Dennis Hastert of

Illinois, said energy legislation could deal with the
shortage

of U.S. refinery capacity, perhaps by cutting regulation
costs

or making it “a little easier to site a refinery, put it in

place and get it up and running.”

Last month, President George W. Bush signed into law a

broad, $14.5 billion energy bill to boost natural gas and
oil

drilling, nuclear power, coal plants and alternative energy

sources. The law included a tax break for major U.S.
refinery

expansion projects, along with steps to streamline a
cumbersome

permitting process long lamented by the industry.

But the new law has not yet spurred any plans for new

refineries. Companies remain leery of proposing new plants
in

U.S. communities, which have a history of vigorously
opposing

such plans.

That, combined with steep start-up costs, have kept any new

refineries from being built since 1976. The resulting
shortage

of refining capacity has left the United States, the
world’s

largest energy consumer, more dependent on gasoline
imports.

Republican lawmakers heading the Senate Energy Committee

and House Energy and Commerce Committee said this week they

were seeking ways to encourage companies to build new U.S.

refineries, preferably at inland locations less vulnerable
to

hurricanes.

Earlier this year, the industry expressed little or no

interest when Bush offered them the option of building new

multibillion-dollar refineries on abandoned U.S. military

bases.

U.S. refining capacity is expected to grow at an annual

rate of less than 1 percent between 2005 and 2007, about
half

the pace of demand, as a handful of companies add capacity
to

existing plants. The Energy Information Administration has

estimated U.S. refining capacity will be about 18.1 million

barrels per day at the end of this year.




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