Congress Could Send Bush Energy Bill Today

By Justin Blum
Washington Post Staff Writer
Friday, July 29, 2005

The House yesterday approved a far-ranging energy bill that provides billions in tax breaks and other incentives to encourage energy production from traditional and alternative sources.

The measure -- sought by President Bush since taking office in 2001 -- was approved 275 to 156, with the support of 75 Democrats and 200 Republicans.

The Senate began debating the bill last night and was scheduled to vote on it today. The White House has signaled that the president will sign the bill.

The legislation includes $14.5 billion in tax breaks over the next 10 years, with a majority going to traditional energy interests such as coal, oil, natural gas and utilities. But the bill also includes incentives for production of alternative sources of energy, such as wind, and for making offices and houses more energy efficient. Also included are tax breaks for hybrid cars.

Supporters said the measure would help spur development of sources of electricity that pollute less than traditional coal-fired power plants, including nuclear and "clean coal" facilities. They also said it would encourage investment in the nation's electrical grid and make it more reliable by allowing for enforceable rules regulating its operation.

"It is a good first step," said Rep. Richard W. Pombo (R-Calif.), who chairs the Resources Committee. "It's a way to move forward. There is a lot of things that we were able to get into this bill that over a period of time will increase domestic production."

But opponents of the 1,724-page measure said it would do little to help consumers, bring down gasoline prices or lessen dependence on foreign oil, which accounts for 58 percent of domestic consumption. They also said the measure fleeces taxpayers by providing billions in tax breaks and other subsidies to the oil and gas industry, whose profits have been soaring because of record oil prices.

"This bill is not an energy policy," said Rep. Earl Blumenauer (D-Ore.). "It is a list of tax breaks and special interest favors that does not translate into a cohesive approach, which global realities demand for this country."

Supporters say they hope the legislation will encourage development of alternative fuels that could eventually displace some gasoline use. They said the bill also could lower gasoline prices -- which are more than $2 a gallon -- by encouraging expansion of refineries and more drilling for oil.

Rep. Bart Stupak (D-Mich.), who supported the bill, said he would have "preferred to see less corporate tax breaks" and "stronger measures to give direct relief at the pump."

During Senate debate, Sen. Lisa Murkowski (R-Alaska) said that the legislation would bring long-term benefits to consumers. "You cannot expect an immediate fix," she said. "We didn't get to $2.40 a gallon gasoline overnight. We're not going to remedy it overnight."

Supporters said the measure could help bring down natural gas prices by giving the federal government ultimate authority to approve the siting of terminals to receive imports. They said more terminals would be approved.

The nuclear industry is among the biggest beneficiaries of the bill. It provides incentives to construct plants and tax breaks for energy produced from them. Proponents said those facilities would provide a cleaner source of energy than coal while opponents portrayed them as dangerous and said they would generate too much waste.

The bill does not take steps that analysts said would reduce the country's demand for foreign oil, including imposing new mileage restrictions on automobiles or drilling in Alaska's Arctic National Wildlife Refuge. A budget measure expected to be considered in September would open the refuge to oil and natural gas development.

The legislation calls for a significant increase in the use of ethanol or other agriculture-derived gasoline additives, which government estimates indicate would displace a small portion of imported oil. Still, some lawmakers complained that rule would increase gasoline prices in some parts of the country.

Some lawmakers warned the bill could lead to drilling in coastal areas that are off-limits by requiring an inventory of offshore oil and natural gas reserves. Proponents said knowing the extent of the reserves would better inform decisions about whether to allow drilling.

© 2005 The Washington Post Company