The House approved legislation Wednesday that supporters said will make it easier for oil companies to build or expand refineries, although opponents said it could lead to more pollution and less local involvement in the siting of
refineries. The bill's sponsors argued that refinery constraints have added to the tight gasoline market that has seen prices at the pump soar to more than $3 a gallon across most of the country. But they acknowledged the measure is not intended to address this summer's high gas prices. Earlier in the day at a House hearing, the head of the Energy Department's statistical agencies said he expects crude oil prices — which have been hovering above $70 a barrel — to remain high into next year.
"This is an industry straining to meet the demand facing it," Guy Caruso, head of the Energy Information Administration, told a House Government Reform subcommittee hearing. He said limited refining capacity has added to the tight market. Separately, Alan Greenspan, former chairman of the Federal Reserve Board, told a Senate hearing Wednesday that while the U.S. economy has been able to absorb the surge in energy costs up until now, some impacts are beginning to be felt on economic growth. The House passed the refinery legislation by a vote of 238-179. But its prospects in the Senate are uncertain. Last year a similar bill failed to get out of committee amid solid opposition by Democrats and moderate Republicans.
Rep. Joe Barton, R-Texas, a leading advocate for the refinery measure, said the bill was aimed at addressing "long term security issues" and not current gasoline prices. He argued that long delays in getting federal, state and local permits has kept oil companies from investing in new refineries. The bill would streamline the permitting process, impose a time schedule for state and local decisions on permits and create a new federal office to coordinate refinery approvals. It also would direct the president to single out three or more closed military bases for potential refineries.
Only a few Democrats supported the House measure. "We need to build more refineries," said Rep. Rick Boucher, D-Va., but the GOP bill "is simply not the answer. ... Environmental permitting is simply not a problem."
Democrats maintained that the proposed streamlining would weaken state and local officials' ability to consider environmental impacts and allow the federal government to dictate a schedule for refinery approval. They also worried that a community may have a refinery forced on them at a nearby closed military base. "It preserves all environmental statutes," countered Barton, who also said local authorities would have a say on the use of a military base. Democrats proposed, instead, creation of a string of government-run refineries that would be used to supply the military in normal times, and supplement commercial refining activities if there is a disruption or other energy emergency. But Republican leaders barred amendments to the bill. An attempt to force a vote on the Democratic proposal failed 223-195.
http://news.yahoo.com/s/ap/20060607/ap_on_go_co/refineries_2