Senate Passes Energy Bill

The Senate met expectations Thursday and easily passed the most sweeping energy legislation in years.

The 88-11 vote capped about six weeks of bitter debate in which most major changes were cast aside. It also sets up a contentious conference with the House of Representatives, which passed a much larger bill last year.

The Democratic bill focuses on conservation and excluded many of President Bush's proposals to increase production, most notably, drilling in the Arctic National Wildlife Refuge in order to reduce reliance on foreign sources. 

Nevertheless, Republicans remained upbeat.

Senate Minority Leader Trent Lott, R-Miss., said the Senate bill marks "a major achievement" and praised Sen. Frank Murkowski, R-Alaska — the chamber's most ardent supporter of oil drilling in the Alaska refuge — for not trying to obstruct the legislation.

"We need more production across the board," said Lott, indicating that he expects the fight over Arctic drilling to be resumed as the Senate and House work out a compromise bill to send to the White House.

Lott lauded what he called "very significant tax incentives" contained in the Senate legislation. But the House-passed bill, which was ignored in the Senate, would funnel more tax breaks to energy production and open the Arctic refuge to drilling.

The Senate bill would provide $14 billion worth of tax breaks over 10 years, divided about evenly between help for renewable energy and conservation programs and the traditional fossil fuel energy producers. The House bill calls for $33 billion in tax incentives focused more heavily toward the oil, gas, coal and nuclear industries.

Other major provisions in the Senate legislation, covering more than 580 pages, include:

— A requirement to use more ethanol in gasoline that will result in a tripling of ethanol production to 5 billion gallons a year, a boon to farmers.

— A ban on use of the gasoline additive MTBE, which has been found to contaminate waterways in many states.

— Consumer tax credits for people who install solar panels in their homes, add insulation, or buy more energy-efficient windows, doors, air conditioners and heat pumps.

— Federal loan guarantees to spur private interest in building a $20 billion pipeline to haul natural gas from Alaska's North Slope.

— Requiring utilities by 2019 to produce 10 percent of their electricity from renewable fuels such as wind, solar and burning forest and agricultural wastes.

— Repeal of a Depression-era law that limits the operations of electricity holding companies; wider authority for federal energy regulators to regulate wholesale electricity markets and transmission lines.

While environmentalists won a major victory in beating back Republican attempts to drill for oil in the Arctic refuge, they failed to get the Senate to do anything substantive to rein in fuel use by the nation's motorists.

An attempt by Sen. John Kerry, D-Mass., to address fuel economy was blocked as opponents of tougher federal auto fuel economy rules argued that automakers would be forced to close plants, lay off workers and deprive drivers of larger cars, including SUVs.

Early in the six weeks of deliberations, the Senate stripped the legislation of a provision that would have required automakers to improve their fleet-wide fuel efficiency to 35 miles per gallon, a 50 percent increase, over the next dozen years. A last ditch attempt Thursday to curb automobiles' energy use, by curtailing the growth of oil use in transportation, was rejected 57-42.

The bill's ethanol provision also came under attack Thursday from California and New York senators, who argued it would cause gasoline shortages and price increases on both coasts. But an attempt to delay the mandate by one year to 2005 was rejected.