WASHINGTON - U.S. farmers' desire to sell more corn-based ethanol may be key to getting Senate and House lawmakers to set aside their differences over drilling in the Arctic National Wildlife Refuge (ANWR) and agree on final energy legislation this year.
Negotiators will get down to work shortly in hammering out an energy bill to present to President George W. Bush for his signature. Drilling in the Arctic refuge, which was the centerpiece of the Bush administration's national energy plan, is seen as the biggest difference in the Senate and House energy bills.
The Senate bill, which was overwhelmingly approved last week, keeps the 19-million acre (7.7 million hectare) Alaska refuge closed. Energy legislation cleared by the House last year would give oil firms access to the refuge, which is home to caribou, polar bears and migratory birds.
Analysts said the issue of Arctic drilling may not be the bill-buster many had feared.
Lawmakers facing autumn congressional elections will have a difficult time turning down politically powerful farm groups that want energy legislation with a strong ethanol mandate. Other supporters of ethanol include environmentalists, large oil companies and Bush.
"The farm lobby is bigger than the ANWR lobby," said John Lichtblau, chairman of the New York-based Petroleum Industry Research Group.
Ethanol, made mostly from corn, is added to gasoline to make motor fuel burn cleaner.
Farm state lawmakers, who make up the biggest voting block in Congress, will feel pressure to drop the Arctic drilling provision from the energy bill to ensure that a stronger ethanol mandate makes it into law, Lichtblau said.
"(Lawmakers) could go back to ANWR next year again" under a new bill, he said.
SENATE WOULD TRIPLE ETHANOL
To help diversify U.S. energy supplies, the Senate bill calls for increasing renewable fuels.
Ethanol use would triple from the current 1.5 billion gallons a year to 5 billion gallons annually by 2012 under the Senate bill.
The House bill does not contain similar ethanol language, but House lawmakers are expected to adopt the Senate's language during negotiations on the energy bill.
California and New York are opposed to more ethanol use, arguing high gasoline prices would result because the fuel additive is difficult to ship from the Midwest.
The Renewable Fuels Association, which represents the ethanol industry, said it was confident the Senate ethanol provisions would be included in a final energy bill.
Hurst Groves, director of Columbia University's Center for Energy Policy, said farmers and ethanol supporters "are strong constituencies that both parties respond to." Arctic drilling may have to be dropped to please them, he said.
Senate negotiators are certain to reject the House bill's language to allow drilling in the Arctic refuge.
"My sense is there will be an (energy) bill this year, but it will not include ANWR," said Groves.
While Bush has said ANWR drilling is a critical part of his energy policy, Groves said he does not believe the president would veto an energy bill because of it.
Lichtblau agreed, saying Bush cannot veto an energy bill "because there are many other things in the bill he likes."
Bush said last week he looked forward to working with lawmakers to finalize an energy bill and get it to his desk.
Last week Bush visited an ethanol plant in the tiny community of Wentworth, South Dakota. The farm state is home to Senate Majority Leader Tom Daschle, and Democrat Sen. Tim Johnson, who faces a tough reelection race with a Republican challenger.
Democrats now hold the Senate by a one-seat margin.
WORLD EVENTS MAY INTERVENE
Analysts said that Arctic drilling could take on a new life if soaring gasoline prices resulted from a major disruption in Middle East oil supplies, especially shipments from Saudi Arabia.
"Were there to be a serious deterioration in relations with oil exporting countries ... and were that to result in significant and steep and visible price rises for consumers at the pump ... then you could see at an attempt at a different type of compromise," Groves said.
Iraq has temporarily suspended its oil exports in protest of the Israeli action in the Palestinian territories. Saudi Arabia said it would not stop oil shipments to the United States in order to force the Bush administration to change its foreign policy toward Israel.
The Senate vote against ANWR drilling was 54 to 46. Lichtblau said if the Middle East crisis threatens U.S. oil supplies, a few senators might change their votes and support drilling. "It's a pretty small (Senate) majority.... Anything is possible if the situation gets worse," he said.:
