House OKs Energy Bill, Sends to Senate

The House approved a far-reaching energy bill (search) Tuesday that would provide billions of dollars in tax incentives for oil, gas and coal producers and give a boost to corn farmers by requiring a doubling of ethanol use in gasoline.

It also would impose federal reliability rules on operators of high-voltage power lines for the first time, to reduce the likelihood of another cascading blackout (search) like the one last summer.

Republicans called the bill farsighted and a key to improving America's energy security by expanding energy choices. But Democrats said the tax breaks amounted to giveaways to oil, gas and coal industries that don't need the help. They also said the legislation fails to focus on ways to conserve energy and develop renewable fuels (search).

The House passed the bill by a vote of 246-180, sending it to the Senate for final approval, probably later this week.

Despite the wide margin of victory in the House, the bill could run into snags in the Senate over a provision that would shield the makers of a gasoline additive from liability lawsuits.

The massive bill, covering more than 1,100 pages, was crafted during weeks of largely closed-door negotiations between House and Senate Republicans and completed in a late-night conference just before midnight Monday despite Democratic protests.

The first overhaul of the nation's energy priorities in a decade, the legislation would provide $23 billion in energy-related tax incentives over 10 years, or nearly three times as much as the White House had said earlier this year it would accept.

Nevertheless, President Bush hailed the House action.

"I commend the House for its vote today and urge the Senate to act expeditiously as well," Bush said in a statement from London, where he was on a three-day state visit.

In Washington, Energy Secretary Spencer Abraham said the administration would have preferred to see the costs lower but accepted the bill's tax package.

About two-thirds of the incentives would go to the coal, oil and natural gas industries. The Congressional Budget Office estimated the bill's total cost at $32 billion over 10 years, and some private tax advocacy groups put the cost at more than twice that.

"This bill will do more for the security of our country than any legislation we've seen in a long time," said Rep. Billy Tauzin, R-La., the bill's floor manager. He called it "a 21st century approach to energy" and said it would help spur production of a wide range of energy sources as well as improve efficiency.

But many Democrats complained the bill would funnel billions to traditional fossil-fuel and nuclear energy industries at the expense of renewable energy sources, and would do little to foster energy conservation or efficiency. The tax measures include $1.5 billion for conservation and efficiency programs including tax credits for energy efficient homes and hybrid gas-electric cars.

"This bill was written in secret and kept from the light of day," complained Rep. John Dingell, D-Mich., "And like lifting the lid of a garbage can, you get a strong smell."

The 1,400 page bill was crafted in sometimes bitter negotiations between House and Senate Republicans and presented to Democrats last Saturday for a final vote by the broader conference committee of the two parties. The House and Senate may give final approval or reject the compromise legislation, but cannot change it.

While House approval has been predicted, the bill's fate in the Senate could be complicated by a brouhaha over a gasoline additive, MTBE, that has been found to contaminate drinking water in at least 28 states. The bill would shield MTBE makers of liability in lawsuits unless they are found to be negligent in the handling of the product.

Sens. Charles Schumer of New York and Barbara Boxer of California said Tuesday they may filibuster the legislation in hopes of getting the MTBE measure removed. Schumer said three or four Republicans were ready to join the effort.

But Republicans said they weren't worried.

"I don't think it's a showstopper," Senate Majority Leader Bill Frist, R-Tenn., said of the MTBE issue.

Sen. Pete Domenici, R-N.M., the bill's floor leader in the Senate, predicted "support will be overwhelming" because of other provisions in the bill including a doubling of ethanol production and benefits for a wide range of energy sectors from coal companies to manufacturers of wind turbines.

The provision that would double the use of ethanol in gasoline to 5 billion gallons a year could be especially important since many states have significant numbers of farmers raising corn.

"Every senator is an aggie. ... It's the political realities of the place," House Majority Leader Tom DeLay said Tuesday when asked about the MTBE controversy. DeLay, R-Texas, had insisted the liability protection be part of the bill.