Negotiators Close In on Energy Measure
Thursday, November 29, 2007
Congressional negotiators are nearing agreement on the components of an energy bill that would boost fuel efficiency standards for vehicles and require vast increases in the use of biofuels, according to congressional aides and lobbyists.
The auto industry and its champion, House Energy and Commerce Committee Chairman John D. Dingell (D-Mich.), have accepted the target of achieving an average of 35 miles a gallon for each carmaker's fleet of new U.S. vehicles by 2020, set in the version of the bill passed by the Senate in June. However, Dingell and the automakers appeared to have won concessions extending fuel efficiency credits for flexible-fuel vehicles and creating separate mileage standards for cars and light trucks.
Yesterday, Dingell was still weighing the details of a compromise Senate proposal and pressing for further concessions. He was scheduled to talk by phone late yesterday with House Speaker Nancy Pelosi (D-Calif.). Aides and lobbyists who agreed to discuss the negotiations spoke on condition of anonymity because the two leaders had not yet conferred.
Efforts to pass energy legislation have been dragging on all year. But there was pressure to complete an agreement by yesterday or today because congressional leaders want to bring the bill to a vote when members return from recess next week, and a few days are needed to hammer out the exact language. Moreover, with oil prices at more than $90 a barrel, many lawmakers feel compelled to take some sort of action on energy.
The two main and most likely features of the final bill are variations of what the Senate adopted. In addition to the 35 mile-per-gallon target for 2020, the Senate bill ramped up the requirement for gasoline makers to use ethanol and other biofuels, to at least 13 billion gallons by 2012 and 36 billion gallons by 2022.
There has been one change in the biofuels measure. While the Senate bill required that at least 3 billion gallons of "advanced biofuels" derived from sources other than corn be used starting in 2016, escalating to 21 billion gallons by 2022, new language would require that the first advanced biofuels be used in 2013. That might ease demand for corn, which has soared in price, and recognize that companies are making progress in using new feedstocks in pilot projects.
Many elements that were in the version of the energy bill passed in August by the House -- such as a requirement for utilities to use minimum amounts of renewable fuels and a rollback of the oil industry's share of a tax break for manufacturers -- seemed unlikely to be included, congressional sources said.
One congressional aide said that Senate Majority Leader Harry Reid (D-Nev.) said he had the 60 votes needed to toughen fuel economy standards and the 60 votes for renewable energy standards for utilities, "but unfortunately they are not the same 60 votes."
The excluded items and other controversial energy issues could be moved to other bills. Sen. Pete V. Domenici (R-N.M.) is still pushing to lift limits on loan guarantees that could benefit nuclear power plants, but that would probably be part of an energy and water appropriations bill.
Though critics of Domenici's efforts said he would undermine government credit reform enacted in the early 1990s, key congressional aides said Reid might go along with his proposal if he needs votes to win passage of renewable portfolio standards in the energy bill or a separate bill later.
Because of concern about the cost of the energy bill, the extension of tax breaks for renewable energy, such as wind and solar, is expected to be left out of it and perhaps inserted in a bill extending a wide variety of tax provisions, congressional negotiators said.
Companies in the wind and solar energy businesses have been lobbying hard for the extension of production tax credits worth about 1.9 cents a kilowatt hour. The credits are set to expire at the end of 2008, but companies said they need an extension to plan new projects.