A proposal to hit oil companies with $29 billion in new taxes advanced in the Senate on Tuesday, targeting the money to energy conservation, wind turbines, electric hybrid cars and clean coal technology.

The massive tax package, double what Democrats had talked about as recently as last week, is "designed to promote clean and sustainable energy," said Sen. Max Baucus, D-Mont., chairman of the Finance Committee that approved the measure by a 15-5 vote.

It will be added to energy legislation being considered by the full Senate.

Senators acknowledged that oil companies would to howl over the new taxes.

But Sen. Chuck Grassley, R-Iowa, said, "We have entered a new era in energy markets ...(that) requires a dramatic shift away from tax incentives for oil and gas production" and toward support for other energy sources and efficiency.

Senators, meanwhile, debated a proposal aimed to boost the use of liquefied coal as a substitute for diesel and jet fuel.

Sen. Jim Bunning, R-Ky., whose amendment would require the use of 6 billion gallons of liquefied coal a year by 2022, argued that coal was an abundant American resource that should be used to replace imported oil. A related amendment offered by Sen. Jon Tester, D-Mont., would commit the government to $10 billion in loans for construction of plants that process coal into liquid fuel.

The tax package that emerged from the Finance Committee reflected the dramatic tilt of congressional sentiment toward renewable fuels — and away from support of oil companies — since Democrats took over control of Congress. In part, the shift stems from growing concerns about the impact of fossil fuels on global warming and motorists' anger over soaring gasoline prices.

The bill would funnel about $11 billion over 10 years into the development of renewable fuels such as ethanol, biodiesel and power from wind turbines in a combination of extensions of existing tax breaks and new tax benefits. An additional $18 billion in tax breaks — from tax credits to clean and renewable energy bonds — also were approved.

To pay for the reductions in revenue, the legislation targeted the large oil companies, either ending a number of tax benefits, some provided as recently as three years ago, and imposing new taxes.

The measure would extend and increase taxes paid under an oil spill liability law and eliminate existing tax credits involving foreign oil production. In all, the tax changes were expected to cost the industry more than $15 billion over a decade.

Another measure, pushed by Sen. Jeff Bingaman, D-N.M., was aimed at collected $10.7 billion in royalties the government has been unable to collect because of flawed oil leasing contracts issued by the Interior Department in 1998-99. The government would collect an excise tax on any oil taken from the Gulf of Mexico, subject to royalties not being paid.

Bunning called the excise tax a "strong arm tactic," the sort of thing Venezuela President Hugo Chavez might try. But his attempt to strip away the offshore drilling tax was rejected.

Sen. Jon Kyl, R-Ariz., said the taxes on the large oil companies — most of the provisions exempt smaller producers — "will almost certainly lead to gas price increases" as oil companies pass on the added cost. "You can't raise taxes ... by $29 billion and not expect gas prices to increase," he said.

Baucus and Grassley said they do not expect higher prices as a result of the tax increases.