Copyright (c) 2005, Dow Jones & Company Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.Senators overwhelmingly approved an energy bill, sending it to a House-Senate conference where the legislation has collapsed in the past two sessions of Congress.
Lawmakers, by an 85-12 vote, endorsed a package of tax incentives, policy changes and new government programs intended to boost energy production, lower prices and reduce dependence on foreign oil. "With oil prices recently topping $60 a barrel, this legislation can come none too soon," said Senate Majority Leader Bill Frist of Tennessee. "We must rethink how America produces, conserves and uses energy -- and this bill is an important start."
Senators now begin negotiations with the House, which in April approved an energy bill that differs from the Senate bill in important ways.
The energy bill has been a priority for President Bush since he took office more than four years ago. The president has called on Congress to send him a final bill before lawmakers depart Washington for a month-long recess at the beginning of August. It is unlikely that House and Senate negotiators will be able to settle their differences in time.
Senators were more generous to energy-efficiency and conservation programs than were their House counterparts. The Senate bill requires electricity utilities to produce 10% of their supply from renewable sources such as wind or sun by 2020. It requires gasoline refiners to produce eight billion gallons of renewable fuel by 2012. It gives homeowners as much as $2,000 in tax credits for purchasing heating systems run by solar, electric or water power by 2009.
The House bill is friendlier to oil and gas interests. It provides $8 billion in tax incentives mainly to encourage production of energy from traditional fossil fuels and gives liability protection to makers of the fuel additive methyl tertiary butyl ether, or MTBE.
The House and Senate have been able to iron out many of their differences in years past, but have never reached an agreement on the MTBE-liability language.
MTBE, which is used to produce cleaner-burning fuel, has been found to contaminate groundwater supplies across the country by leaking from supply lines or underground storage tanks at gas stations. House Republicans believe Exxon Mobil Corp., ConocoPhillips and other MTBE makers should have some protection from defective-product lawsuits because the federal government requires the use of fuel additives. The Senate opposes the measure.
Seeking to find a middle ground, two Republicans, Rep. Joe Barton of Texas and Rep. Charles Bass of New Hampshire, are working on a plan to create an $8 billion trust fund to clean up MTBE spills. Yesterday, two leading senators expressed some support for a trust fund.
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Energetic Debate
Major differences between the House and Senate energy bills:
BILL: MTBE
HOUSE: Provides producers with liability protection
SENATE: No liability protection
BILL: Renewable energy
HOUSE: No requirement
SENATE: Requires 10% of fuel to come from renewable sources by 2020
BILL: Tax Incentives
HOUSE: $8 billion, mostly for oil, coal and natural gas
SENATE: $18 billion for production of fossil and renewable fuels
BILL: Arctic National Wildlife Refuge
HOUSE: Would open up ANWR to oil drilling
SENATE: No language in bill, but voted earlier this year to approve
drilling through budget process