Energy bill highlights influence of Texans

WASHINGTON --When Congress doled out billions of dollars last week in a sweeping package meant to lay out a new national energy policy, it handed a huge economic boost to the home state of those who wrote and shepherded the bill: Texas.

Lawmakers also gave final approval last week to a massive highway bill, which featured another steady increase in Texas's share of federal dollars in comparison to other states. The House of Representatives granted final approval to the much-debated Central American Free Trade Agreement, expanding an important market for Texas, the nation's second-largest exporter to the Latin American countries involved in the pact.

But it is the energy bill -- a $14.5 billion extravaganza, four years in the making -- that highlighted the clout of the country's second-largest state, home to the president, the House majority leader, and the chairman of the committee overseeing the energy legislation. The bill grew out of a task force led by the vice president, a former energy company executive with deep ties to the Lone Star State.

''There's a lot of geographic concentration of power," said Tyson Slocum, an energy analyst with Public Citizen, a government watchdog group, noting that the House majority leader, Tom DeLay, and the House Energy and Commerce Committee chairman, Joe Barton -- both Texas Republicans -- played big roles in crafting the bill. ''All these folks are from Texas -- a big energy-producing state. It shows where the influence is."

Under the energy bill, which President Bush is scheduled to sign next week, energy companies based in Texas will be eligible for billions in tax benefits to encourage exploration and drilling for new sources of oil, both on federal lands and offshore. More tax breaks are available for corporations -- including oil companies -- that invest in natural gas pipelines, and still other tax incentives could encourage the expansion of oil refineries.

The benefits include the ability to write off some of the costs of exploring for oil -- a provision that will cost taxpayers $974 million over two years -- as well as another $406 million in tax write-offs to expand refineries. Industry officials say the tax incentives are needed to look for oil in places where it may be hard to reach or of uncertain quantity, but critics, including some free-market Republicans, say the oil industry should be putting its own, record-high profits into finding more energy sources.

As a sugar cane-growing state, Texas is one of four states eligible for a provision to spend $36 million in loan subsidies to use cane sugar to make ethanol, a gasoline additive. And the Research Partnership to Secure Energy for America, a not-for-profit facility based in DeLay's hometown of Sugar Land, Texas, is a leading contender to distribute $1.5 billion in government money to oil companies for deep-water offshore oil drilling.

The energy bill's defenders say the favorable outcome is predictable for Texas, the home to many energy companies bound to benefit from a policy meant to encourage production of new energy. Backers of the package say the companies may prosper, but so will the nation: Jobs will be created, and consumers will benefit from more domestically produced oil.

But detractors find the relationship between the energy bill's creators and its beneficiaries a little too cozy. They note that Texans controlled the measure from its 2001 inception, in Vice President Dick Cheney's Energy Task Force, to its completion in a House with prominent Texans in charge.

''The president is from Texas. The vice president lived in Texas until he changed his residence -- and he was CEO of Halliburton," a company based in Texas, said Representative Edward J. Markey, Democrat of Malden and a negotiator on the energy bill. ''The majority leader is from Texas; the chairman of the Energy and Commerce Committee is from Texas, and the chairman of the energy subcommittee is from Texas. No one is lonesome in the Lone Star State when it comes to energy policy."

States with powerful committee chairmen tend to do well in the bills being crafted by their representatives in Congress. For example, Alaska -- whose representatives chair both the House and Senate transportation committees -- ended up with a stunning $1,500 per person for projects under the $286.4 billion transportation bill approved by both chambers last week, according to an analysis by the nonpartisan Taxpayers for Common Sense. The next biggest per-capita recipient, Vermont, got $544 per person for local projects, while Massachusetts got just $52 per person.

Illinois -- home to the GOP House Speaker, J. Dennis Hastert -- also fared well under the transportation package, the group reported, as did New York and California, large states with big congressional delegations.

But as Congress rushed to compete a flurry of legislation before the summer recess last week, Texas industries and residents had a banner week, according to calculations by budget watchdog groups.

Aside from the energy bill, Texas stands to improve its economy through CAFTA, a free trade agreement Bush signed Tuesday that eases trade restrictions with five Central American countries and the Dominican Republic. The region is the Lone Star State's 12th-largest export market worldwide, according to the US Chamber of Commerce.

When Congress approved the highway bill late last week, Texas also saw its share of highway funds increase.

While Texas took home 76 cents in transportation money in 1993 for every dollar it contributed through the federal highway fund, it has done increasingly better since then. Under the transportation package approved last week, the state will get 92 cents on the dollar as of 2008, according to calculations by the office of Senator Kay Bailey Hutchison, Republican of Texas. The highway fund is subsidized by a gas tax paid by consumers, and lawmakers are eager to get as much back -- or nearly as much back -- in highway funds as their residents give.

DeLay and Hutchison said the changes bring long-overdue parity for a state that had been a ''super donor" -- giving more through federal gas taxes than it got back in highway funds. Further, Texas got $653 million in what Hutchison's office called ''high-priority projects," or local spending projects.

With DeLay as majority leader, several other Texans heading key House committees, and Hutchison holding key posts on both the Senate Appropriations Committee and the Senate Commerce, Science and Transportation Committee, ''Texas has a growing success rate on legislation," said Keith Ashdown, vice president for policy for Taxpayers for Common Sense.

Barton, chairman of the House Energy and Commerce Committee and chief architect of the energy bill on Capitol Hill, brushed aside suggestions that Texas did unusually well under the measure.

''I think Texas is under-incentivized in the bill," Barton quipped in his trademark Texas drawl. ''I gave away way too much to other states."