updated 8/3/2010 6:11:35 PM ET 2010-08-03T22:11:35

Democrats on Tuesday gave up trying to pass even a scaled-back energy bill this summer that would have removed liability ceilings on oil companies, a reaction to the BP oil spill.

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The bill also would have offered rebates to consumers for home energy efficiency improvements and encouraged federal agencies to buy more electric vehicles and retrofit heavy duty vehicles for natural gas.

Senate Majority Leader Harry Reid, D-Nev., said he was unable to find a handful of Republicans to help advance the energy bill before the August recess. The bill would have removed the $75 million cap on oil spill liability and required energy companies to pay higher fees into an oil spill trust fund. The House passed a similar bill last week.

Republicans had offered an alternative bill that would have lifted the moratorium that the Obama administration put on deep-water drilling in May.

Sen. James Inhofe, R-Okla., called Reid's bill an "empty political exercise" that would kill jobs by exposing oil companies to unlimited liability — a measure that had some oil-state Democrats nervous.

The delay is the latest setback for Obama's energy program. Last month, Senate Democrats gave up on trying to pass a global warming bill after they found support waning in their own party for imposing caps on and taxing greenhouse gases. The House passed a bill last year to do that.

"Everyone knows it shouldn't be this hard," said Sen. John Kerry, D-Mass., who was the lead author on the original bill that would have capped carbon dioxide pollution. Kerry said that a bill to hold BP accountable and help people on the Gulf coast should be the kind of bill "that ought to pass 100 to nothing."

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