October 7, 2005

House narrowly approves bill to help US refineries

By Chris Baltimore

WASHINGTON (Reuters) - In a cliffhanger vote held open by
Republican leaders until they won, the U.S. House of
Representatives passed by two votes on Friday a bill clearing
the way for U.S. oil refineries to expand.

The legislation, written by Republican Joe Barton of Texas,
barely won approval despite dropping a White House-backed
provision that would have gutted clean air rules to help
refineries and coal-powered utilities.

In the first major House vote since Texan Tom DeLay was
forced to step down as majority leader, Republicans won,
212-210, in a roll call that ran more than 40 minutes, far
beyond the allotted five minutes.

Democrats in the chamber chanted "shame, shame, shame" as
the final tally was announced.

When over two dozen Republicans initially voted no, DeLay,
Barton, House Speaker Dennis Hastert and new Majority Leader
Roy Blunt circled the chamber and cajoled the holdouts.

The palm-sweating vote switched from "yes" to "no" several
times, but Republican Rep. Mike Simpson, the speaker pro
tempore, did not gavel the vote closed until it swung in the
Republicans' favor.

Several Democrats protested that the vote was being held
open. "I am informed that every member of Congress who is in
town has voted," Democratic whip Rep. Steny Hoyer of Maryland
said at one point, when the tally was 210 yes, 214 no.

House Democratic leader Nancy Pelosi also complained,
saying the proceedings were bringing "dishonor to the House."

The bill aims to add 2 million barrels per day of capacity
by offering abandoned military bases for refinery construction

It also speeds up permits by giving the Energy Department
more authority over the process, and offer federal insurance to
refiners in case new projects are delayed.

The bill was prompted by hurricanes Rita and Katrina, which
plowed through the heart of the U.S. energy producing region
and shut offshore drilling rigs and refineries.

Its most controversial item would have deleted a portion of
the Clean Air Act known as "new source review" that requires
costly new equipment to cut emissions when refineries and
coal-fired power plants are expanded.

However, Barton was forced to drop that proposal from the
bill late on Thursday because of opposition from Democrats and
moderate Republicans. Although the plan to dismantle new source
review was a White House priority, the administration released
a statement saying it still supported the legislation.

"We look forward to working with Congress to improve the
bill further as it moves forward in the legislative process,"
the White House said.

No new U.S. refinery has been built since 1976 and dozens
of plants have been closed despite rising fuel consumption.

"We haven't built a new refinery in a generation. We need
more," said Rep. Fred Upton, Michigan Republican.

Democrats say refiners are loath to build new facilities
amid record-high profits, while Republicans say permitting and
environmental requirements keep them from expanding.

Refiners are "making more money from refining less
gasoline," said Rep. Rick Boucher, Virginia Democrat.

Rep. Edward Markey, Massachusetts Democrat, said refiners
have engaged in a "systematic conspiracy" to idle capacity,
pointing to some 30 plants that were closed in recent years.

Democrats were unsuccessful in pushing an alternate bill
that would create spare refineries that the federal government
could activate during gasoline shortages.

The House Rules Committee blocked a bipartisan plan by
Markey and Sherwood Boehlert of New York to require an
8-mile-per-gallon rise in vehicle mileage to curb gasoline

Consumer groups said the legislation would do little to
help American households facing near-record fuel prices.

"Its approach leaves the decision to increase refining
capacity in the hands of an industry that has deliberately
taken advantage of tight supplies in recent years," said Mark
Cooper of the Consumer Federation of America.

Other provisions in the bill include:

* Expanding Northeast Heating Oil Reserve to 5 million
barrels, from current 2 million barrels;

* Limiting anti-pollution gasoline blends to six, from the
current 17;

* Requiring FTC to prepare a report on the price of
gasoline and heating oil on the New York Mercantile Exchange;

* Waives federal, state and local fuel additive
requirements after a natural disaster that disrupts supplies;

* Gives Federal Energy Regulatory Commission the power to
monitor offshore gas gathering lines to prevent
anti-competitive practices.


*TAKE A LOOK-Energy recovers from hurricanes

*FACTBOX-Congress drafts post-hurricane laws

*Bush pushes for oil refinery construction