Saturday, October 08, 2005

House narrowly approves bill to help US refineries


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 giving U.S. oil refineries incentives to expand.

The legislation, written by Republican Joe Barton of Texas, was barely approved, 212-210, even after Barton dropped a White House-backed provision that would have gutted clean air rules for refineries to expand existing plants.

The bill wants to add 2 million barrels per day of capacity by offering abandoned military bases for refinery construction sites. It also gives federal insurance to refiners whose projects are delayed by lawsuits or regulatory snags, and puts the Energy Department in charge of processing permits.

President George W. Bush commended passage of the bill.

"No refineries have been built in our Nation since 1976, and the recent disruptions in supply from Hurricanes Katrina and Rita have demonstrated that additional refining capacity is critically needed," Bush said in a statement.

It was the first major House vote since Texan Tom DeLay was forced to step down as majority leader after being indicted on felony charges. Republicans won in a roll call vote that ran 44 minutes, far beyond the allotted five minutes.

Some 13 Republicans, mostly from Northeast states, ultimately voted with 196 Democrats and 1 independent against the bill. No Democrats voted for it.

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 to cajole holdouts.

Republican Wayne Gilchrest of Maryland was the last to switch. With the tally stuck at 211-211, Gilchrest changed his vote, making it 212-210. Barton promptly shook his hand and Republican Mike Simpson, who presided over the vote, gaveled it to an end.

The rapidly shifting vote kept even senior Republicans at sea. "I didn't know what to expect," Hastert said afterward.

Several Democrats protested that the vote was held open. "I am informed that every member of Congress who is in town has voted," Democratic whip 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 brought "dishonor to the House."

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 part 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 expand. Barton dropped it from the bill because of opposition from Democrats and moderate Republicans.

That plan "clearly needed more time for hearings" and could be considered by the House later this year, Blunt said.

The Bush administration said it supported the bill.

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.

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

The House also blocked a bipartisan plan by Democrat Ed Markey of Massachusetts and Sherwood Boehlert of New York to require an 8-mile-per-gallon rise in vehicle mileage to curb gasoline demand.

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.

(Additional reporting by Susan Cornwell) LINKS: *TAKE A LOOK-Energy recovers from hurricanes *FACTBOX-Congress drafts post-hurricane laws *Bush pushes for oil refinery construction