Energy reform becomes law in the U.S.

Amidst oil prices climbing to record numbers (more than US$ 65.00 per barrel at the time of printing) and gas prices taking a heavy toll on drivers' budgets across the United States, president George W. Bush signed into law an energy reform bill that is designed to relieve energy concerns over the long-term.

The bill, which enjoyed bipartisan support in the Congress, comprehensively addresses issues such as the causes of the Northeastern Blackout of 2003 as well as fuel alternatives to reduce U.S. dependence on foreign oil. While acknowledging that such reform will not provide a quick-fix to U.S. energy challenges, the President's tone was optimistic at the prospects of alleviating the country's long-term problems.

The new law, totaling 1,724 pages and representing the first nationwide energy plan in more than ten years, "will encourage energy efficiency and conservation, promote alternative and renewable energy sources, reduce [U.S.] dependence on foreign sources of energy, increase domestic production, modernize the electricity grid and encourage the expansion of nuclear energy", according to the official White House press release.

Included amongst the provisions are US$ 14.5 billion worth of tax breaks for the production of cleaner-burning coal facilities, the further development of nuclear energy as well as increased domestic production of natural gas and oil, and the promotion of energy efficiency in vehicles and residences. Under the new law, for example, consumers who purchase energy-efficient hybrid, clean-diesel and fuel-cell vehicles are eligible for up to US$ 3,400 in tax credits based on fuel-saving potential.

Energy reform has been a top priority of the Bush administration as evidenced by the tasking of vice president Dick Cheney to devise recommendations for solving U.S. energy needs. One such administration-backed solution, the initiative to reserve a portion of the Arctic National Wildlife Refuge in Alaska for oil drilling, was not included in the final legislation and will be considered at a later date.

This law could have significant ramifications for U.S. energy companies and Midwestern states that grow vast amounts of corn. One of the provisions might drastically alter the landscape of U.S. electricity in allowing consolidation of public utilities by repealing an antiquated law from the early part of the 20th Century. According to the White House, the repeal of the outdated law would encourage greater investment in the modernization of the electricity grid and the overall infrastructure, helping to avoid crises such as large-scale blackouts. The new law also provides funding for the increased research and production of ethanol, a fuel alternative that is derived from corn, a major cash crop in the Midwestern United States.

RELATED ARTICLE: AmCham Energy Task Force Meets with the Texas Railroad Commissioner

Recently, AMCHAM's Energy Task Force met with the chairman of the Texas Railroad Commission, Victor Carrillo. Carrillo succeeded Antonio O. Garza Jr., after president George W. Bush appointed him ambassador to Mexico. Commissioner Carrillo traveled to Mexico City as part of the Texas trade delegation comprised of government officials and senior-level private sector executives from both sides of the U.S./Mexico border. The Texas Railroad Commission is a state government entity that regulates the Texas energy industry. AMCHAM's Energy Task Force is comprised of companies active in Mexico's energy markets. Both parties met in order to sustain an exchange of ideas.

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As part of the trade delegation, the executives from the Energy Task Force as well as AMCHAM staff attended a reception at ambassador Garza's private residence. AMCHAM would like to thank the Texas State Office of Mexico as well as chairman Carrillo and the Texas Governor's Office for orchestrating such a productive and important event.