Video: House passes major energy bill

updated 7/29/2005 4:37:14 PM ET 2005-07-29T20:37:14

After years of stalemate, Congress on Friday sent President Bush a national energy plan touted by supporters as providing a diverse mix of fuels, new jobs, cleaner burning coal and the next generation of nuclear reactors.

But the bill now ready for President Bush's signature won't stem high energy prices that have been viewed as a growing political concern, both in Congress and at the White House.

The Senate approved the mammoth $12.3 billion legislation 74-26, though some Democrats said they voted for the measure reluctantly because of its cost and its tepid response to reducing the country's consumption of oil — now more than 20 million barrels a day, more than half imported.

The Senate action a day after the bill breezed through the House completed the first major overhaul of the nation's energy policies in 13 years. The White House said in advance of passage that Bush looked forward to signing it into law, possibly next week.

Under political pressure to do something about the nation's energy problems in light of soaring oil and gasoline prices, Bush challenged Congress to provide him a bill before lawmakers depart this week on a five-week summer recess.

Bill won't lower today's energy prices
But even the bill's sponsors acknowledged that their the 1,724-page bill would have little if any impact on today's energy prices or wean the nation away from its thirst for oil.

"We won't have any answers if the question is what are you going to do tomorrow morning about gasoline prices," said Sen. Pete Domenici, R-N.M., who led the Senate negotiations with the House in crafting the legislation.

But he said the bill would, indeed, provide financial incentives and federal policies "that we as a nation will benefit from not tomorrow, but for the next five or 10 years."

A provision with direct and more immediate impact on the public expands daylight-saving time by one month, adding three weeks in the spring and a week in the fall, taking it beyond Halloween. The change would go into effect in 2007.

Consumers also will see tax credits for the purchase of hybrid-electric cars and get tax breaks for making energy conservation improvements in their homes.

$14.5 billion in tax breaks
The bill provides $14.5 billion in tax breaks and potentially billions more in loan guarantees and other subsidies to encourage oil and gas drilling, improve natural gas and electric transmission lines, build new nuclear power reactors and expand renewable energy sources, especially construction of wind turbines.

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Its cost, put at $12.3 billion after revenue offsets, is nearly twice the $6.7 billion price tag the White House had sought.

"The cost of this .... is staggering, " said Sen. Russ Feingold, D-Wis., who tried to block the measure because he said it violated the Senate's own budget rules. His attempt was rejected 71-29.

The bill's cost was overridden by its widespread political support, in part because it includes something for virtually everyone.

In addition to the broad array of tax incentives and tax breaks to virtually every energy industry, it will be a boon to farmers by directing a doubling of corn-based ethanol use in gasoline to 7.5 billion gallons in 2012, a provision embraced by Farm Belt lawmakers, both Democrats and Republicans.

The legislation expands the federal government's authority over siting liquefied natural gas import terminals, overriding local or state opposition if necessary. Domenici said it will mean more gas imports to meet the country's growing demand for natural gas.

New federal standards required for utilities
For the first time, utilities would have to meet federal reliability standards for the electricity grid to try to avoid a repeat of the massive 2003 blackout that hit the Midwest and Northeast.

But critics said the bill also eases environmental rules for refiners and for oil and gas exploration. And they're concerned about what's not in it.

"The bill is a series of missed opportunities," said Sen. Ron Wyden, D-Ore., who was the only Senate Democrat to oppose the compromise legislation in the House-Senate conference that crafted the final version this week.

Sen. John Kerry, D-Mass., said it falls far short of what is needed by not addressing climate change and including nothing that would increase the fuel economy of automobiles, the biggest guzzlers of oil. Just this week, Kerry said, a report was made public from the Environmental Protection Agency showing a decline in automobile fuel economy.

Lawmakers avoided a certain fight in the Senate by leaving out one of Bush's top energy goals: opening the Arctic National Wildlife Refuge in Alaska to oil drilling. House Republicans promised to pursue that issue separately this fall.

House Republicans also abandoned a provision that would have given the makers of the gasoline additive MTBE protection against lawsuits stemming from the chemical's contamination of drinking water supplies in at least 36 states.

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