The Senate approved an energy bill Tuesday that was more favorable to conservation, wind farms and ethanol and less kind to oil and gas producers than legislation passed by the House.
Whether the sharp differences can be resolved may depend on how much pressure President Bush can bring to bear. The president urged the lawmakers to resolve their differences quickly and send him a bill before August.
"The administration's attitude is we want a bill," Energy Secretary Samuel Bodman told The Associated Press. "I think you will see the president quite proactive on this."
Hard bargaining lies ahead, especially with a pesky issue surrounding the gasoline additive MTBE remaining a potential deal breaker — as it was two years ago.
Dangerous gasoline additive under fire
The House, particularly Majority Leader Tom DeLay of Texas, wants to protect oil companies and refiners who produced MTBE from environmental lawsuits brought by communities whose drinking water has been contaminated by the additive. DeLay said Tuesday an attempt is being made to "come up with a solution" to the MTBE issue, but provided no details.
Supporters of the Senate bill, which has broad bipartisan backing and is silent on MTBE, say such liability protection would trigger a filibuster and send the bill to defeat, as it did in 2003. Sen. Pete Domenici, R-N.M., said the House needs to work out a compromise on MTBE that can pass Senate muster.
After finishing all but a final vote on the bill last week, the Senate approved the 1,250-page document Tuesday 85-12. Seven Democrats and five Republicans voted against the bill.
Despite its broad sweep, which would affect virtually every energy industry while boosting energy conservation, lawmakers acknowledged the bill would have little impact on current high gasoline and crude oil prices. Crude oil eclipsed $60 a barrel this week and gasoline averaged $2.22 a gallon nationwide, according to the Energy Department.
Bush said the Senate-passed bill would help U.S. economic growth by addressing the root causes of high energy prices and the nation's growing dependence on foreign supplies. But the bill's critics argued it does little to reduce demand for oil, two-thirds of which goes for transportation, or reduce oil imports, which account for 58 percent of U.S. demand.
More environmentally friendly than the energy bill passed by the House in April, the Senate bill would funnel 40 percent of $18 billion in tax breaks over 10 years to boost renewable energy sources, energy conservation and alternative transportation fuels.
Domenici, chairman of the Senate Energy and Natural Resources Committee, said it would help diversify the country's energy and usher in "a new policy for the United States ... that energy should be clean, renewable and that we have conservation" to curtail energy demand.
Among other key provisions are:
- Loan guarantees of up to 80 percent for developing new technologies for clean coal and next-generation nuclear power reactors.
- A doubling of ethanol use in gasoline to 8 billion gallons a year by 2012, a boost to corn farmers.
- A requirement for utilities to produce 10 percent of their electricity from renewable energy sources, such as wind and biomass from garbage or plants, by 2020.
- Mandatory reliability standards for electric power grids, ending the current system of industry self-regulation.
- Tax breaks for people who buy gas-electric hybrid cars, more energy-efficient appliances or energy-efficient homes.
The bill skirted some of the most contentious energy issues, from drilling in an Alaska wildlife refuge — which is called for in the House bill — to requiring automakers to build more fuel-efficient cars. It also avoided mandatory reductions in heat-trapping emissions to address climate change, which some senators had wanted.
The bill "is short on the truly bold action needed to break this country's addiction to foreign oil and long on the traditional boondoggles that waste taxpayer money and fail to promote energy independence," complained Sen. Ron Wyden, D-Ore., one of the dozen senators who voted against the legislation.
A number of Republicans, including Sen. Jon Kyl of Arizona, opposed the bill in part because of its cost, an estimated $16 billion in direct spending and tax breaks. That's double what the House-passed bill would cost and well above the $6.7 billion price tag the White House had wanted.
$55 billion over the next 10 years
An analysis by the advocacy group Taxpayers for Common Sense said the bill would cost $55 billion over 10 years if all the programs it authorizes were actually funded by Congress. Lawmakers acknowledged many of the programs in the bill will never be given the money authorized under current climate of tight budgets.
"We're not talking about something that's enormous," said Domenici of the bill's realistic expenditures.
Bodman said he'd like to see the cost trimmed, adding, "We're going to work toward that."
He also said lawmakers need to resolve the MTBE issue. Still, he told The AP, "To the extent we have an impasse, I stand ready to step in."
In the last four years the Senate has passed energy legislation twice, only to see the effort fall apart without a final agreement with the House. Republican and Democratic lawmakers predicted that a compromise will require the close involvement of the White House.