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Senate OKs energy bill; House fight looms
Wednesday, June 29, 2005

WASHINGTON -- In an unusual display of bipartisanship, the Senate heeded President Bush's call to pass a massive energy bill yesterday, but now faces contentious negotiations with the House, which passed a decidedly different version in April.

By a vote of 85 to 12, the Senate passed legislation that would have a major impact on consumers for years to come, but which will not have any impact this summer on skyrocketing gasoline prices, which have climbed toward the $2.50 mark in some areas of the country.

The Senate bill would authorize $18 billion in tax incentives for the oil and gas industries to increase production as well as encourage alternative energy from solar, wind, geothermal and biomass sources. It would make appliances more energy-efficient and encourage production of cars that run on different kinds of fuel. The bill also sets mandatory standards for utilities aimed at avoiding another blackout such as the massive outage in the summer of 2003.

It would promote nuclear power and raise the nuclear power plant operator's maximum liability from $63 million to $95.8 million. It would provide $1.8 billion for clean coal development and $1.6 billion for hydrogen supply technology.

But the bill says nothing about developing the Alaska National Wildlife Refuge, which Bush wants to do; does not limit carbon dioxide emissions aimed at curtailing global warming; does not waive liability for the water contamination from the gasoline additive MTBE, as the House did; and it does not require significant increases in gas mileage for new vehicles. Senators defeated a proposal to increase mileage to 40 miles per gallon, up from 27.5 mpg, by 2016.

Bush made a major pitch for the legislation in a speech last week at the Calvert Cliffs Nuclear Power Plant in Maryland, the first visit by a president to a nuclear power plant in more than a quarter-century.

Because of concerns over where to put radioactive waste and safety issues after the Three Mile Island nuclear plant accident in 1979 and the disaster at the Chernobyl plant in Ukraine in 1986, no nuclear plants have been built in the United States for three decades. Bush said that must change. Nuclear power provides 20 percent of U.S. electricity needs, and he wants that to increase.

Some senators said the bill does not do enough to reduce U.S. dependence on foreign oil by conservation. The bill says the president must reduce consumption by 1 million barrels of oil per day, but the Senate voted against setting a much bigger goal of cutting imports of oil by 40 percent by 2025.

The bill won support from farm-state senators by boosting ethanol, a corn-based fuel, by requiring refineries to add 8 billion gallons of it by 2012.

Senate Majority Leader Bill Frist, R-Tenn., and Senate Minority Leader Harry Reid, D-Nev., both praised the bill's bipartisan nature, calling it a model for other legislation.

The House bill, passed on a vote of 249 to 183, has a price tag of $8 billion compared with the Senate's version, which has an ultimate cost of $16 billion over 10 years. (Part of the $18 billion in tax incentives would be offset by new revenues.)

But the House version is considered to be more favorable to the oil and gas industries. For example, the House would allow private companies with oil and gas leases that can't be developed to get federal compensation, which could result in billions of dollars worth of windfalls.

The House bill also would open the Arctic National Wildlife Refuge to drilling, which it claims would produce $2.6 billion in revenue. The Senate viewed the Arctic drilling as well as absolving MTBE producers from liability for contaminating drinking water, as deal-busters and omitted them.

Bush prefers the House version and thinks the Senate version is far too expensive. Nonetheless, he praised the Senate for its action yesterday.

Pennsylvania's two Republican senators, Rick Santorum and Arlen Specter, Ohio's two GOP senators, Mike DeWine and George Voinovich, and West Virginia's two Democratic senators, Robert Byrd and Jay Rockefeller, all voted for the bill.

First published on June 29, 2005 at 12:00 am
Ann McFeatters can be reached at amcfeatters@nationalpress.com or at 202-662-7071.
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