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Senate, House Turn Focus to Energy Bills

By Steven Mufson
Washington Post Staff Writer
Tuesday, June 12, 2007

With U.S. gasoline prices near record levels, the Senate is to take up an energy bill today that Democratic leaders hope will be a rallying point for voters concerned about national security and climate change as well as pump prices.

The measure includes efforts to boost automobile fuel efficiency for the first time in a generation, require a fivefold increase in biofuel use, institute tough penalties for price gouging, and set higher efficiency standards for appliances, lighting and buildings.

But the legislation, drawn up by four committees, faces an array of hurdles, including heavy lobbying by the auto industry, attempts by some lawmakers to promote coal and nuclear fuel use, and strong opposition from the Bush administration to the price-gouging provisions. Many senators plan to propose controversial amendments, including one that would open up more coastal waters to oil and gas exploration.

Meanwhile, in the House of Representatives, Speaker Nancy Pelosi (D-Calif.) has been at odds with House Energy and Commerce Committee Chairman John D. Dingell (D-Mich.), a defender of the auto industry, and Richard Boucher (D-Va.), chairman of the energy and air quality subcommittee.

Boucher is a champion of turning coal into liquid transportation fuel, something environmentalists oppose, and a sponsor of a measure that would undercut California's ability to set its own tougher standards for greenhouse gas emissions from vehicles.

Senate Majority Leader Harry M. Reid (D-Nev.) said after a speech to the Center for American Progress yesterday that the increase in auto-fuel efficiency requirements, known as the corporate average fuel efficiency (CAFE) standards, would be the most controversial part of the Senate package. It orders auto companies to hit a 35-mile-per-gallon target by 2020 and improve mileage 4 percent a year after that.

"I know that the auto industry is still wavering on this issue," Reid said. "I met with the CEOs of the big three automakers last week, and here is what I told them: The debate on raising CAFE standards should be over. It will happen. And perhaps if they had joined us instead of fighting us these last 20 years, they might not be in the financial mess they're in today."

Sen. Carl M. Levin (D-Mich.), an auto industry ally, was still negotiating with fellow senators over compromise language, one of his aides said.

One possibility: federal assistance. Democratic presidential hopeful Sen. Barack Obama (D-Ill.) recently proposed federal help for the cost of retired workers' health benefits if automakers use the resulting savings to retool for higher gas mileage. A presidential rival, Sen. Hillary Rodham Clinton (D-N.Y.), has made a similar proposal.

The energy package also features a boost in the use of renewable fuels for vehicles to 36 billion gallons by 2022, including 15 billion gallons of corn-based ethanol and the rest from cellulosic ethanol sources.

Although popular in Congress, a group of food companies -- including beef, pork and poultry producers, Coca-Cola, PepsiCo, Kellogg and H.J. Heinz -- sent a letter to Reid and Senate Minority Leader Mitch McConnell (R-Ky.) opposing the mandate and tax credits given for ethanol use.

Price-gouging penalties are also expected to provoke heated debate. The measure, put forward by Sen. Maria Cantwell (D-Wash.), resembles one in the House proposed by Rep. Bart Stupak (D-Mich.). The Bush administration has said it "strongly opposes" the House measure, which it said "could result in gasoline price controls and in some cases bring back long gas lines reminiscent of the 1970s."

Another moving element is renewable portfolio standards similar to those that have been adopted by many states. Senate Energy and Natural Resources Committee Chairman Jeff Bingaman (D-N.M.) made a bargain with Republicans not to raise this in committee, but he plans to propose an amendment that would require utilities to get 15 percent of their energy from renewable resources -- such as wind, solar, new hydropower, geothermal, landfill gases -- by 2020. Many big utilities say that isn't feasible.

Much could turn on a single word. Some lawmakers, most likely led by Sen. Pete V. Domenici (R-N.M.), may try to alter the standard from "renewable" to "alternative," which could include nuclear or certain kinds of coal-fired plants. A similar word change in the mandate for renewable motor fuels could open the way for coal-to-liquids projects, a change advocated by Obama and Sen. Jim Bunning (R-Ky.). Environmentalists have warned that to replace significant amounts of gasoline with liquid coal would mean a huge increase in mining and would produce twice as much global warming gases as would conventional gasoline.

Last year's hard-fought battles over offshore drilling could be revived by Sens. Byron L. Dorgan (D-N.D.) and Larry E. Craig (R-Idaho), who favor an amendment that would open up the eastern part of the Gulf of Mexico for drilling, allow U.S. companies to bid on leases in Cuban waters near Florida, and undertake an inventory of resources that might lie off the Atlantic coast from Virginia to Georgia.

The offshore drilling is part of a bill the two sponsored that also included aggressive promotion of conservation. Dorgan said the country could neither conserve nor produce its way out of its energy problems.

One likely loser in both the House and Senate is the Environmental Protection Agency. Bingaman would strip the EPA of authority to review renewable fuels standards and let the president choose another agency if he wants. The Senate Commerce Committee bill would undercut the EPA's ability to grant waivers to states regulating tailpipe emissions of greenhouse gases. And Boucher's draft legislation simply asserts that the EPA has no jurisdiction in the area.

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