Senate Moves Closer to Passing Energy Policy Overhaul

The Senate was on the cusp Thursday of approving comprehensive energy legislation aimed at providing relief -- over the long term -- from price shocks at gas pumps and in utility bills.

Senators spent much of Thursday considering final amendments to the bill, and a final vote was expected Tuesday.

The bill’s passage would bring President Bush closer to achieving one of his major goals -- the first overhaul of national energy policy in more than a decade.

The Senate bill must be reconciled with a different version of energy legislation passed by the House in April.

Tough negotiations between the two chambers lie ahead on several issues. But the chairman of the House energy committee, Rep. Joe Barton (R-Texas), said he believed lawmakers were “on the verge” of resolving a key disagreement that doomed the energy bill in 2003.

The dispute concerns whether to grant legal protections to makers of the fuel additive methyl tertiary-butyl ether, or MTBE, which has caused pollution problems in many states.

Barton declined to elaborate on how the issue might be resolved, but one strategy under discussion was that of attaching the legal protection provision to a popular highway spending bill that lawmakers were eager to pass. Another proposal is establishment of an industry-funded cleanup program.

The legal protection for MTBE makers is backed by House Majority Leader Tom DeLay (R-Texas), as well as the oil industry.

It is opposed by Republican and Democratic senators from states with contamination. They said the provision, included in the House bill but not the Senate’s, would shift billions of dollars in cleanup costs to taxpayers.

The Senate is expected to approve its energy measure by a lopsided margin, underscoring bipartisan eagerness to respond to consumer anger over the high price of oil, which reached a record $60 a barrel Thursday before closing at $59.42 in New York futures trading.

“If the American people think that bipartisanship is dead in Congress, they should take a look at this bill,” Sen. Orrin G. Hatch (R-Utah) said.

Bush has pushed for sweeping changes to national energy policy since he took office in 2001, during the California electricity crisis.

He has called such action critical to economic growth and national security.

Like the last major energy bill, which was passed in 1992, this measure is aimed at reducing oil imports, which in 2004 accounted for about 58% of U.S. consumption.

Backers of the bill said it would increase and diversify domestic fuel sources and, in turn, temper price volatility and supply disruptions.

The bill would provide about $14 billion in tax breaks to encourage production as well as conservation efforts, such as purchases of hybrid cars and the manufacture of energy-saving appliances.

The measure also includes provisions aimed at strengthening the nation’s electricity grids and requiring that 10% of the nation’s electricity be generated from alternative energy sources, such as solar and wind power, by 2020.

And it would double the amount of corn-based ethanol that would have to be added to gasoline, a popular provision among farm-state lawmakers.

The measure deals with almost every imaginable facet of energy -- such as providing grants to help Indian tribes develop more of the resources on their land and authorizing $6 million to promote bicycle riding. But critics said it failed to take the biggest step possible to reduce oil imports and cut emissions blamed for global warming: mandating tougher fuel economy standards for cars and sports utility vehicles.

As in past years, Democrats from auto-producing states and Republicans wary of government regulations blocked an effort Thursday night to impose stricter miles-per-gallon rules, contending they could lead to lighter and less-safe vehicles and cost auto industry jobs. The vote against the amendment was 67 to 28.

Although the bill provides little in the way of immediate relief from the high cost of gasoline, lawmakers added provisions that would require a federal investigation into the recent surge in prices and require the Energy Department to consider whether to suspend purchases for the nation’s emergency oil stockpile when gas prices were high.

Even if the House and Senate resolve their differences about MTBE, another potentially contentious issue surfaced Thursday with Senate approval of $1 billion for coastal restoration projects in energy producing states, mostly on the Gulf Coast.

The money was provided over the objections of the White House budget office, which said it would worsen the federal budget deficit.

Although the Senate energy bill does not include one of Bush’s favorite energy initiatives -- opening the Arctic National Wildlife Refuge in Alaska to energy exploration -- the Senate has given preliminary approval to a separate measure that would allow drilling.