The House of Representatives today passed an energy bill that includes $14.5 billion in tax breaks and encourages a new wave of nuclear power plant construction.
The bill was hailed by the White House and energy companies, but it drew criticism from environmental and consumer groups. The critics oppose what they regard as giveaways to highly profitable corporations and complain that the bill's provisions will not significantly reduce energy consumption or drive down record high oil prices.
The House approved the 1,725-page Energy Policy Act of 2005 by a vote of 275 to 156. The measure now goes to the Senate, which is expected to vote on it tomorrow.
President Bush has said repeatedly that he wants Congress to send him an energy bill he can sign before the August congressional recess.
"This is a good bill," White House spokesman Scott McClellan told reporters. "This legislation will help us reduce our dependence on foreign sources of energy and help address the root causes that have led to high energy prices." He said Bush looks forward to signing it.
However, one of the bill's leading opponents, Rep. Edward Markey (D-Mass.), a member of the House Energy and Commerce Committee, denounced it as "politically and morally wrong." He charged that the bill "is packed with royalty relief, tax breaks, loan guarantees for the wealthiest energy companies in America even as they are reporting the largest quarterly profits" in U.S. history.
Bush's support for the bill comes despite concerns about the size of some incentives, such as for deep-water drilling by oil and gas companies. Bush and Energy Secretary Samuel Bodman have said that with crude oil prices near $60 a barrel and the industry reaping record profits, such incentives were hardly necessary.
Although the White House maintains that the bill will help deal with the causes of high energy prices, McClellan acknowledged indirectly that it will not immediate reduce those prices. Asked at today's news briefing whether there was anything in the legislation that would give Americans relief from high gasoline prices, McClellan said, "Well . . . we didn't get into this overnight, and we're not going to get out of it overnight."
One provision that aroused the ire of some Democrats was an item added to the bill at the last minute to create a $1.5 billion fund for drilling research. Rep. Henry Waxman (D-Calif.) said the measure would benefit an energy consortium based in the home district of House Majority Leader Tom DeLay (R-Tex.).
The bill gives the lion's share of the $14.5 billion in tax breaks and incentives (about $9 billion) to traditional oil, gas, coal and electricity companies over 10 years. Less than $5 billion is earmarked to promote renewable sources of energy, energy efficiency and cleaner-burning vehicles.
The Senate, in a version of the energy bill approved last month, sought far higher tax incentives for conservation and alternative sources of energy.
The House bill includes incentives aimed at encouraging the nuclear power industry to build the first new plants since the 1970s. Companies would be offered loan guarantees for construction of new nuclear plants and risk insurance to protect them against regulatory delays for the initial units.
The bill would also offer tax breaks for the production of energy from wind, biomass, solar and geothermal sources.
U.S. farmers would benefit from a requirement to sharply increase the use of ethanol and other fuels derived from agricultural products.
Also included is a provision that would extend daylight savings time by three weeks in the spring and one week in the fall beginning in 2007.
But neither the House bill nor the Senate version contains a measure that analysts have said would have the most impact on reducing the steadily growing U.S. demand for foreign oil: a requirement to increase fuel efficiency standards for trucks and cars.
Lawmakers rejected higher standards under pressure from the automobile industry, arguing that such requirements would necessitate new designs that would make vehicles less safe and would lead to losses of manufacturing jobs. Advocates of higher fuel efficiency have sharply disputed those arguments.
Staff writer Justin Blum contributed to this report.