updated 7/25/2005 8:26:51 AM ET 2005-07-25T12:26:51

House and Senate negotiators removed a major obstacle that had deadlocked energy legislation for more than two years, but even supporters say the measure will not provide short-term relief from high gasoline prices.

Lawmakers hoped a compromise bill might be completed in a day although disputes remained over the size of an energy tax package.

The conferees on Sunday abandoned a bid to give makers of the gasoline additive MTBE liability protection against environmental lawsuits. That decision defused the issue that had caused the collapse of a sweeping energy bill two years ago in the Senate.

Senate negotiators rejected a House proposal for an $11.4 billion MTBE cleanup fund. House Republicans had hoped the fund would serve as a compromise liability shield for the oil industry. The industry faces scores of MTBE lawsuits arising from contamination of water supplies by the additive in at least 36 states.

A number of senators had vowed to filibuster any bill with such protection for the industry, and the bill’s supporters doubted they had the 60 votes needed to end debate.

Sen. Pete Domenici, R-N.M., leader of the Senate energy negotiating team, said while some MTBE issues were still being discussed, they did not include a cleanup fund or liability protection. “Those are gone,” he told reporters as the House-Senate conferees held an unusual Sunday session in hopes of completing work on sweeping energy legislation by Monday night.

Rep. Joe Barton, R-Texas, the conference chairman, said he was certain the remaining issues could be resolved in time to complete work late Monday and allow both the House and Senate take up the measure later in the week.

Issue dogged lawmakers
Congress has been trying to enact energy legislation for four years, each time falling short after the House and Senate passed widely different bills.

Facing public pressure over soaring gasoline and other energy prices, President Bush said he wanted a bill on his desk before Congress departs for its August recess. Still, the president and lawmakers crafting the bill have acknowledged it will do little or nothing to lower fuel prices in the short term.

The legislation creates billions of dollars in tax breaks and other federal subsidies such as loan guarantees for energy industries and for energy conservation and to develop technologies to reduce pollution from burning coal at power plants. It also would provide a boon to farmers by requiring billions of gallons of corn-base ethanol to be used in gasoline, although the amount remains to be negotiated.

Some provisions are still in dispute.

Among them: A Senate-passed requirement for an inventory of offshore oil and gas resources and a House-approved measure, pushed by Majority Leader Tom DeLay of Texas, to provide $2 billion in subsidies for research into oil exploration in the deepest parts of the Gulf of Mexico.

Lawmakers from most coastal states fear the inventory is a prelude to drilling in waters now off limits to energy development and could jeopardize the final bill in the House. Opponents to the deep-water drilling subsidy say oil companies are flush with cash and should pay for the research.

House conferees also oppose a Senate provision to require all utilities to generate 10 percent of their electricity from renewable sources and disagree with the Senate over how much corn-based ethanol refiners should be required to use in gasoline. The Senate wants 8 billion gallons a year to be used, while the House favors 5 billion gallons.

Domenici and Barton said they’re optimistic the outstanding issues can be resolved.

Congressional tax writers have been negotiating separately behind closed doors on the tax package. The Senate approved a $14 billion package with emphasis on promoting renewable energy sources and conservation, while a $8 billion House proposal leaned toward helping oil, gas and coal industries.

But MTBE liability had been viewed as the biggest obstacle to a deal again this year.

Communities and water agencies say they face billion-dollar cleanups because MTBE, a gasoline additive introduced in the mid-1990s to reduce air pollution, polluted drinking water. More than 150 lawsuits have been filed to get MTBE makers pay for cleanup.

Barton had hoped to defuse issue by proposing an $11.4 billion cleanup fund for MTBE, including $4.1 billion to be paid by MTBE manufacturers, refiners and gasoline station owners. But the oil industry said it was being asked to pay too much, water agencies said there were too many loopholes and not enough money, and others said taxpayers shouldn’t have to pay at all.

© 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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