Energy Bill Could Pass House Today

A House-Senate negotiating committee Monday sent to both chambers for final approval a Republican-drafted energy bill filled with home state measures designed to overcome objections to the legislation’s cost and effect on the environment.

As early as today, the House is expected to approve the first overhaul of national energy policy in a decade. The more difficult battle for the bill’s proponents lies ahead in the narrowly divided Senate.

The action came as the cost estimate of the tax breaks contained in the measure grew to $23 billion over the next decade, nearly triple what President Bush has advocated to promote production and conservation. Bush is, nonetheless, expected to sign the bill, which he has called critical to economic growth and national security.

“This isn’t a perfect bill,” said Sen. Pete V. Domenici (R-N.M.), who oversaw drafting of the bill. “Everyone had to make hard choices and tough compromises.”

But, he said, the bill would diversify energy supplies and make the nation less vulnerable to shortages and price spikes.

“We have produced a bill that’s tough to walk away from,” he said.

The measure is designed to reduce U.S. dependence on foreign oil and strengthen the nation’s electricity grid to prevent problems like the 2000-01 California energy crisis and this summer’s Northeast blackout.

But the legislation has drawn opposition from a wide range of groups. Environmentalists say it would weaken environmental protections to promote more drilling, mining and burning of fossil fuels. Consumer groups say it would weaken consumer protections in electricity markets.

Taxpayers say it would deepen the federal budget deficit. And water agencies object to a provision limiting the liability of makers of methyl tertiary-butyl ether, or MTBE, a fuel additive blamed for contaminating water supplies from California to New Hampshire.

Republicans have sought to head off a Democratic filibuster in the Senate by packing the measure with home state measures eagerly sought by lawmakers from both parties.

Most notable is a provision for farm state legislators that would double the amount of corn-based ethanol that must be added to the nation’s gasoline supply and provide a tax break to promote the production of fuel from soybeans.

Another provision would provide $1 billion to states affected by offshore oil drilling, a large chunk of which would go to Louisiana, which has two Democratic senators. Still another would establish mandatory rules for utility use of the electricity grid, welcomed by lawmakers from the Northeast eager to respond to the blackout.

The bill would authorize $1.8 billion for developing pollution-control technology for coal-fired power plants, a measure that should appeal to lawmakers from coal-producing states. It would authorize $3.4 billion a year in energy assistance to low-income families, a provision that is likely to be welcomed by lawmakers from cold-weather states. And there is a provision to provide tax-exempt “green bonds” for energy-saving projects at abandoned industrial sites, including the construction of an indoor rainforest in Iowa.

It remained unclear whether Senate Democrats would attempt a filibuster.

Sen. John B. Breaux (D-La.) said he expected the bill to pass with the support of many Democrats because the contentious issue of opening up Alaska’s Arctic National Wildlife Refuge to oil and gas exploration had been dropped.

“The caribou are safe,” he said, a reference to wildlife found in the refuge.

But in their first extended comments about the bill, many Democrats Monday assailed it as a boon to the oil, gas, coal and nuclear industries. It would shortchange conservation and development of cleaner energy sources, such as solar and wind power, they said.

Sen. Jeff Bingaman (D-N.M.) complained that the bill “does not represent the kind of a forward-looking, balanced energy policy that the nation needs.”

House negotiators Monday rejected a Democrat-sponsored effort to require utilities to generate 10% of their electricity from sources such as solar and wind power by 2020. Rep. Henry A. Waxman (D-Los Angeles) pointed out that California law requires that 20% of the state’s electricity come from renewable sources by 2017.

Opponents argued that the requirement would drive up electricity costs and threaten power supplies in states without strong winds and bright sunshine.

“We’re for renewables. We’re against government mandates,” said Rep. Joe Barton (R-Texas), noting that the bill includes tax incentives to encourage greater use of solar and wind power.

House negotiators also rejected a Senate effort to close what critics call the SUV loophole, a provision of this year’s $350-billion tax-cut package that they say has opened the way for businesses to use the tax law to buy luxury sport utility vehicles instead of more fuel-efficient cars.

House Republicans said they planned to address the issue in other legislation, but Rep. Edward J. Markey (D-Mass.) assailed his colleagues for not acting now.

“It’s a disservice to our men and women in the Middle East for there to be a $100,000 tax break for people purchasing SUVs,” he said.

Among other provisions, the bill would provide federal loan guarantees of up to $18 billion and tax incentives to spur building a pipeline to bring Alaska natural gas to the Midwest. It would expedite approval of permits for drilling and mining on federal land and authorize a $500-million program to generate energy from brush removal and tree thinning in national forests.