Senate To Rework Ambitious Energy Bill
Vehicle Fuel Efficiency Expected to Be the Focus

By Steven Mufson and Jonathan Weisman
Washington Post Staff Writers
Saturday, December 8, 2007

Democratic leaders in the Senate are planning a vote on a retooled energy bill late next week after they failed to muster enough support yesterday to prevent a filibuster of ambitious legislation passed by the House on Thursday.

A new version of the bill will probably scale back some elements of the House's tax package and jettison a requirement that electric utilities use renewable energy for 15 percent of their power generation, but a White House veto threat citing a broad range of objections continued to cast uncertainty over the ultimate fate of the proposed legislation.

The Senate voted 53 to 42 yesterday to close debate, falling short of the 60 votes needed to permit a vote on passage even though four Democratic presidential candidates rushed back from the campaign trail to bolster the measure's chances. All but three of senators who blocked a vote on the bill were Republicans; five Republicans joined with Democrats in favor of closing debate.

The failure to close debate was a victory for the major oil companies, Southeastern utilities and coal-mining firms that had opposed the legislation. But amid growing public concern about climate change and with oil prices hovering around $90 a barrel, there was still widespread support among lawmakers for an ambitious energy bill with higher automobile fuel-efficiency standards as the centerpiece.

"We have to figure out how to pass a bill in the Senate that will accomplish the same general objectives the House is trying to accomplish," said Senate Energy and Natural Resources Committee Chairman Jeff Bingaman (D-N.M.).

On Thursday, the House had brushed aside a veto threat from the White House and approved an energy bill that would raise vehicle mileage standards for the first time in 32 years, set a quota of 36 billion gallons a year for the use of ethanol and other biofuels, and require increased use of renewable energy sources to generate electricity. The bill would also raise $21 billion in revenue over 10 years, largely through ending tax breaks for the nation's biggest oil companies, while extending tax incentives for wind, solar and other renewable energy sources.

House Speaker Nancy Pelosi (Calif.) issued a statement saying that she was "disappointed" but hoped that the two chambers could still agree on a "strong energy bill and send it to the President's desk for his signature."

Anticipating the Senate vote early yesterday morning, House Majority Leader Steny H. Hoyer (D-Md.) conceded that the final deal would have to drop the renewable-energy quotas, but he said a stripped-down version of the House legislation "is still a good bill."

House Democratic leaders were criticized even by some members of their own party for including measures that were likely to doom the package in the Senate. But Hoyer defended the strategy, saying it is not the House's job to simply bow to the demands of the White House and Senate Republicans.

"If you shoot low, you hit low," Hoyer said.

The idea of forcing electric utilities to add renewable energy to their mix of power generation is not unusual. More than half the states in the nation have renewable-electricity mandates, most of them tougher than the House version of the bill. The House bill excluded rural electric cooperatives and government utilities, and it allowed energy-efficiency gains to count toward four percentage points of the 15 percent standard.

One of the companies most opposed to the measure was Southern Co., the holding company for Georgia, Alabama and Mississippi utilities. The firm spent $7.1 million on in-house lobbying efforts and an additional $1.1 million for outside lobbying firms on energy and environmental issues in the first half of this year.

In the wake of the Senate vote, there was more uncertainty about the fate of the tax package.

Senate Finance Committee Chairman Max Baucus (D-Mont.) said a tax package was "an essential component" of the bill and added that "it will not be jettisoned."

Oil companies have complained vociferously about the House measure, which would raise an additional $13 billion from major oil companies over 10 years. But one GOP aide said the House's tax items were reasonable. One change would exclude oil companies from a tax deduction for manufacturers that Congress adopted in 2004 after international trade negotiators rejected a tax incentive that had been targeted at exporting manufacturers alone. "They got a free ride," said one congressional aide.

Another part of the House package reduces tax credits for imported raw materials; the United States imports 60 percent of its crude oil.

"This is a $13 billion Christmas gift to Big Oil," said Daniel J. Weiss, senior fellow and director of climate strategy at the Center for American Progress. "The size of the tax breaks are a drop in the Big Oil barrel."

GOP and Democratic leaders pointed fingers at each other in the wake of yesterday's vote. Minority Leader Mitch McConnell (R-Ky.) called the electricity requirements and the tax package "twin millstones" around the neck of the bill. Republican lawmakers said Democrats had to decide whether they wanted to adopt energy legislation or "veto bait."

But Democrats said that Republicans were bowing to oil companies and utilities and that they were blocking legislation that Americans want and need. And they said President Bush would be hard pressed to veto it.

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