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Energy: Congress May Be Jolted Into Action

After years of partisan wrangling, Congress finally mustered the will to pass a $14.5 billion national energy bill in August. Trouble is, the legislation failed to tackle the most pressing problems -- the double whammy of strained production capacity and rising oil and gasoline consumption -- that have sent prices to record levels. Those deficiencies were laid bare by the devastation wrought by Hurricane Katrina. And now prices are spiking again in anticipation of additional destruction from Hurricane Rita. With energy costs clobbering household budgets, voters are clamoring for real action from Congress. "Energy is back on the agenda, big time," says House Energy & Commerce Committee Chairman Joe Barton (R-Tex.).

Predictably, those on both sides of the energy issue are pushing pet prescriptions. Conservatives like Barton want the O.K. to build more refineries and drill for oil offshore and in the Arctic National Wildlife Refuge (ANWR). Environmentalists see an opportunity to throttle back consumption with measures like stricter energy efficiency rules and more stringent corporate average fuel economy (CAFE) standards for autos. The enormity of the crisis may keep the posturing to a minimum, but "it's a 50-50 chance that they can get it done this year," says one top lobbyist.

If Energy Bill II does materialize, look for these key elements:

-- Building Refineries. Barton is pushing a measure that dramatically speeds up the siting and approval process. It also would designate construction corridors where new facilities could be built quickly, including surplus military facilities. While this fast-track idea will be opposed by environmentalists, even many Dems agree that Katrina has shown how badly the nation needs to ramp up refining capability.

-- More Drilling. According to a Sept. 8-11 Pew Research Center poll, 57% of Americans say it's more important to develop new energy sources than to protect the environment, a jump of eight percentage points since March. That shift, along with the heightened sense of vulnerability, has emboldened business interests such as the National Association of Manufacturers to call for more development of the Outer Continental Shelf. "It is a stretch to look for any good news in Hurricane Katrina, but perhaps we can learn from it," says NAM President John Engler. Expect a new push to open up ANWR and build an Alaskan gas pipeline.

-- Conservation and Alternative Energy. Traditionally, Republicans have opposed efforts to reduce energy use through federal mandates. But post-hurricane politics are forcing a change. Senate Energy & Natural Resources Committee Chairman Pete Domenici (R-N.M.) is cautiously embracing the idea of raising CAFE standards. And he's considering other steps, such as more tax rebates for fuel-efficient products and even reduced speed limits. Meantime, Dems see an opportunity to slip in additional incentives for alternative energy, such as requiring utilities to generate more electricity from renewables.

Passing a new energy bill in the compressed calendar confronting Congress this fall will be a challenge, especially since many of these measures were too controversial to be included in the legislation Bush just signed. And each will be fiercely opposed by special-interest lobbies and the not-in-my-backyard set. But Katrina and Rita may have changed politics-as-usual enough for Congress to pass an energy bill that makes a difference.

Business long has relied on its GOP allies to push its tort reform agenda, but cracks might be forming in that once-reliable foundation of support. Ken Connor, former head of the conservative Family Research Council and the lawyer who represented Florida Governor Jeb Bush in his bid to keep Terri Schiavo on life support, has taken up a new cause -- tort reform. He's against it.

Connor, a trial lawyer at Wilkes & McHugh, is chairman of the Center for a Just Society, a fledgling Washington-based nonprofit. Among its goals: teaching fellow social conservatives that continuing effort by business to lessen its exposure to legal liability violates fundamental Republican principles of states' rights and personal accountability. "Tort reform is affirmative action for wrongdoers," Connor says.

After scandal torpedoed Air Force plans to lease Boeing (BA) refueling tankers, you would think the flyboys would tread lightly. Guess again. In late August the Air Force requested info from contractors about a possible tanker fleet -- before it had completed an analysis of its options demanded by Senator John McCain (R-Ariz.), who opposed the earlier deal.

That deal collapsed after a Boeing exec offered a job to an Air Force official working on the contract. Both went to jail. When McCain learned that the Air Force had jumped the gun, he demanded that the Pentagon rescind the request until the analysis is done. A top Pentagon official pulled the plug the next day.

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