Senate Passage Not Last Word on Energy Bill

Senate approval of a far-reaching energy bill isn't the last word on developing a new national energy agenda.

The shape of the final bill will depend on negotiations with the House, where some Republicans are determined to craft a bill more to their liking. The Senate overwhelmingly approved an energy policy outline Thursday night identical to a bill that was approved by a Democratic-controlled Senate a year ago, including popular provisions to expand corn-based ethanol use and $16 billion in tax breaks and subsidies for energy development and conservation.

But the same bill ended up going nowhere when House and Senate negotiators couldn't get a final agreement in the closing days of the last Congress.

Now Republicans will control both sides of the negotiating table and the Bush administration, concerned about a public uproar this winter over high natural gas (search) prices, has made clear it wants a bill before the end of the year.

"The president looks forward to working with the conferees to ensure that we enact a balanced and comprehensive energy policy this year," the White said in a statement after Thursday night's 84-11 Senate vote.

The question now is whether a compromise bill can be made acceptable to Democrats.

Sen. Pete Domenici (search), R-N.M., who struggled for weeks to try push a GOP-drafted bill through a balky Senate only to see the legislation abandoned, predicted that significant parts of Senate-approved bill will be reworked.

"This is a day to smile and smile big," said Domenici, the chairman of the Energy Committee. "The reason I'm smiling is because I'm going to be rewriting that bill" in the conference, which he will co-lead with Rep. Billy Tauzin, R-La.

"This only gets us to the (House-Senate) conference. After that it's wide open," acknowledged Minority Leader Tom Daschle of South Dakota, who nevertheless gushed with optimism after Thursday's vote. "Never in our dreams did we imagine that we could pass a Democratic bill in a Republican Congress," Daschle said.

The legislation would:

-Double the use of corn-based ethanol (search) in gasoline, while banning the use of another additive, MTBE, that has been found to contaminate drinking water supplies.

-Provide $16 billion in tax breaks and incentives to promote energy production and conservation.

-Spur production of a natural gas pipeline in Alaska.

-Rescind a Depression-era law that restricted merger activities of utility holding companies.

But on many priorities it differed sharply from the bill passed by the House in April.

The House directed oil drilling in the Arctic National Wildlife Refuge (search) in Alaska, while the Senate measure makes no mention of the refuge.

Tax breaks in the Senate bill were directed more generously toward renewable energy sources and conservation measures than the larger, $18.7 billion tax package approved by the House, which funneled two-thirds of the money to fossil fuel energy development.

Domenici promised changes that will do more for energy production and expansion of nuclear power. He had tried to include major provisions in the scrapped GOP bill that would benefit the nuclear industry, including loan guarantees for building six next-generation nuclear power plants.

Last year's bill had no such measures.

The Senate vote came after a day of significant turnarounds. Earlier in the day, it appeared the energy legislation was doomed. Then, in floor remarks, Daschle alluded to last year's legislation, suggesting it would have been a better way to go. Majority Leader Bill Frist, R-Tenn., quickly picked up on it and said the bill would be acceptable to Republicans.

A final decision to abandon the bill and resurrect last year's energy package was accepted during a closed-door meeting of Republican senators.

"They made us an offer we couldn't refuse," Daschle said.

"It's been a fascinating day," Frist told reporters, although he acknowledged the way the compromise developed was "a little bit unusual."