NEW HAMPSHIRE SENS. BEGIN ASSAULT ON ENERGY BILL

by Jordan Carleo-Evangelist

WASHINGTON - Sen. Judd Gregg condemned the GOP-backed national energy bill on the Senate floor Wednesday, calling it a "gratuitous attack on the Northeast" and an "obscene attack on American taxpayers."

New Hampshire's senior Republican lawmaker helped lead an increasingly rancorous debate over the Bush administration's broad national energy plan as it became clear the bill would face a much tougher fight in the Senate than it did in the House, which passed it with relative ease Tuesday.

As debate on the bill intensified, a bipartisan filibuster that both Gregg and Sen. John E. Sununu have pledged to support seemed likely. Sununu said Wednesday he wasn't sure whether thecoalition had the 41 votes necessary to sustain a filibuster and prevent the Senate from voting on the bill. If they didn't, the bill is likely to pass.

Meanwhile, the bill's most ardent supporter and chief author, Sen. Pete Domenici, R-N.M., cautioned that killing the bill now would mean killing any meaningful energy legislation in the near future. Traditionally, as the presidential election year approaches, chances for passing controversial legislation dims. And the energy bill, which the Bush administration worked on for nearly three years, is one of the most contentious pieces of legislation to come along in years.

Leafing through the bill's more than 1,200 pages as he paced back and forth on the chamber floor Wednesday, Gregg excoriated supporters for pandering to regional special interests with roughly $25 billion in tax breaks - three times what President Bush had asked for. He called the bill "a socialistic approach to a way to run an economy," a slap at the free market system that Bush and most other Republicans espouse.

Gregg zeroed in on a one section of the bill regarding the use of ethanol, a corn-based additive that makes gasoline burn cleaner. The bill would mandate that the percentage of ethanol used in domestic gasoline be increased by two and half times over the next 10 years. That provision, which froze the bill in negotiations for over a month and threatened to sink it, is seen largely as a concession to senators from agricultural states, including Minority Leader Tom Daschle of South Dakota.

But Gregg argued that experiments with synthetic fuels after the energy crisis of the late 1970s showed that tax breaks and other incentives are worthwhile only if market forces - not political ones - demand them.

"Unless the market makes the product viable, it usually never works," Gregg said.

In an interview, Sununu said the breadth end depth of the tax cuts threatened the fiscal solvency of the government.

"There's no reason to put forward a tax package that's above what the President requested," he said. "The tax subsidies in the bill are huge and are mostly directed toward industries that are relatively strong and profitableá. Providing $25 billion in tax subsidies distorts the competitive marketplace, distorts the investment in the energy industry and is bad for the economy."

Gregg also used his floor time to question provisions of the bill that would require the federal government to pay for environmental impact studies for geothermal? energy companies operating on federal land.

"That's like saying to a drug company that the federal government must pay for research to produce your drug, even though the company will get the profits," he said.

Both Gregg and Sununu criticized another provision of the bill that would protect the makers of the gasoline additive MtBE from a contamination lawsuit filed by New Hampshire in September. The state contends that the product, which the federal government forced several northeastern states to add to fuel to meet clean air standards, is now present in 15 percent its wells.

The bill would protect the makers of the chemical, which the state says could cause cancer, from lawsuits and allow them to continue to produce it until 2015.

"I think this type of case should be decided in the courts, and if it's frivolous to sue the manufacturer of a product simply for having produced a product, then I trust that the courts will give a good judgment," Sununu said.

Domenici said on the Senate floor that the MtBE provision was a compromise that had to be made in order to persuade House negotiators to accept the ethanol provisions, which were needed to win over powerful senators. He warned the growing coalition trying to filibuster the bill that it would be foolish to sink such far-reaching legislation over one small provision on MtBE.

"We did what was politically feasible," Domenici said. "If we do this, the country will be much safer, much better off, for years to come...

"You don't kill this bill in pieces; you adopt it all or none," he added. Domenici repeatedly tried to defuse the argument by some of the bill's opponents that the bill was regionally biased.

But Gregg insisted the Northeast is unfairly hamstrung by the legislation.

"You don't pass a law which says the legitimate activity of a state or a group of states in trying to defend the quality of their environment will be wiped off the books," he said. "It should certainly not be being done by a Republican-dominated Congress, which theoretically still believes there are states out there that have some rights."