Will Divided Congress Share the Same Focus As Bush?

The 2000 elections did little to bring predictability to Congress. The partisan bickering that characterized the past few years may be amplified by the dynamics of a tied Senate and a narrowly divided House. An optimist might hope that lawmakers will recognize that they represent a country split along ideological lines and seek consensus and cooperation. At any rate, the convenience store industry and petroleum retailers must not think they will be forgotten in the coming months ? in fact, energy and environmental issues will be a primary focus of the 107th Congress.

This Congress will be looking at several issues important to petroleum retailers and the c-store industry. Supply disruptions in America's motor fuels and electricity industries last year have generated significant interest on Capitol Hill, and lawmakers have plans to develop a comprehensive national energy policy ? a priority shared by the new Bush administration. This effort, however, will be complicated by environmental concerns associated with the production of oil and electricity, and policies seeking to reduce emissions from both stationary and mobile sources. Each of these has the potential to seriously impede the delivery of motor fuels to America's retailers and consumers.

Sen. Bob Smith (R?N.H.), chairman of the Senate Environment and Public Works Committee, has announced that his top priorities for the year are reducing air emissions by electric utilities, passing "Brownfields" legislation and reducing MTBE in gasoline. Each of these concepts has bipartisan support, but working out the details is certain to prove more difficult. Passage of any such legislation would require broad bipartisan consensus.

President Bush also has indicated that he supports legislation to reduce emissions of harmful pollutants from power plants and will make such environmental provisions part of the new administration's comprehensive energy policy. However, such environmental regulations have a direct effect on energy supply. Many claim burdensome environmental regulations are the reason no new refineries have been built in the United States in more than 25 years and why there is a lack of flexibility in the distribution of America's motor fuels. Petroleum and c-store organizations, like NACS, believe that the development of a balanced energy and environmental strategy is essential to restoring the fungibility of the nation's gasoline distribution system and hope Congress will work with the Bush administration to create such a policy.

The Brownfields issue ? the cleanup of underused of abandoned facilties ? also is one that should gain support from both sides of the aisle, and the involvement of the new the EPA administrator, former New Jersey Gov. Christie Whitman, should improve the bill's chances for passage. NACS has generally supported EPA's Brownfields initiatives and believes that there are legislative reforms that could be beneficial to petroleum retailers, including the creation of small-business liability exemptions to the Superfund program.

MTBE has become a hot issue in both California and New England, as several states have discovered groundwater contamination resulting from the addition of the fuel oxygenate to reformulated gasoline. Last year, a failed bill pushed by Sen. Smith would have allowed state governors to waive the 2-percent oxygenate requirement and implement a federal renewable fuels requirement.

This Congress faces increasing pressure to address the MTBE contamination issue. But phasing out the additive could prove challenging. A reorganization in the House Energy and Commerce Committee has placed jurisdiction of the Clean Air Act with a subcommittee chaired by Joe Barton (R?Texas), who has defended MTBE producers and who opposes an elimination of the additive. NACS has not opposed the concept of removing MTBE from gasoline, but has expressed concern with the time frame over which MTBE use is reduced or eliminated, because of the supply disruptions that could result from such action. In addition, NACS and other petroleum marketing organizations oppose the establishment of a renewable fuels requirement, which would essentially be an ethanol mandate.

Congress will spend a considerable amount of time on energy-related issues this term. It is essential that convenience store and motor fuels retailers assist legislators in developing a national energy policy that will improve the fungibility of America's motor fuels supply system and reduce the volatility in prices. Consumers demand sound environmental policy, but they also demand sufficient supplies of energy and stable prices. Congress can achieve both and the industry must be prepared to help balance the scales.