Energy Bill OKd by Senate Seeks to Cut Oil Ties

Ending months of tortuous negotiations, the Senate voted, 93 to 3, Thursday to salvage a landmark energy bill that aims to reduce the nation’s dependence on foreign oil by encouraging conservation and increasing production of alternative fuels.

The most ambitious effort to craft a national energy policy in more than a decade, the bill alters the way the government regulates, taxes and subsidizes nearly every sector of the energy industry. It encourages natural gas production, stimulates the use of nuclear energy and rewrites the rules that regulate the electric utility industry.

Other provisions mandate new efficiency standards for many electric appliances and encourage development of non-petroleum fuels by requiring federal and state governments to begin in 1993 to buy fleet vehicles that run on alternative fuels.

The overwhelming Senate vote assured that a long-delayed House-Senate conference can now finally complete work on the legislation in time to send it to the President’s desk this year.

Although a number of last-minute fights over non-energy issues had threatened to sidetrack the bill, its energy provisions remained virtually identical to those in legislation the Senate initially passed in February. The main difference was the addition of tax incentives designed to spur new energy production and conservation, including provisions that:

* Provide tax deductions to car buyers who purchase autos powered by alternative fuels. The bill offers deductions of up to $2,000 for cars that run on natural gas. Lower deductions would be given for cars that can run on gasohol blends of corn-derived ethanol and gasoline or can switch from one fuel to the other.

* Give about $1 billion in tax relief to independent oil and gas producers.

* Increase the tax-exempt subsidy companies can give employees who use buses or trains to get to work while limiting what they can give in parking subsidies. Tax-exempt mass transit subsidies would be increased from $21 to $60 a month, while tax-exempt parking subsidies would be capped at $145 per month.

The new tax breaks would be paid for by closing loopholes that now allow corporations to take tax deductions on country club and athletic club dues. Taxes also would be increased on some ozone-depleting chemicals.

The bill overhauls the utility industry by creating a new class of wholesale power suppliers authorized to transmit electricity across state lines.

One provision stimulates the development of nuclear power by reducing from two to one the number of licenses a new power plant must obtain. Another requires that federal buildings, new homes and a wide range of appliances, from electric motors to light bulbs, be more energy efficient.

The Senate and House versions contain numerous differences that remain to be worked out. Senate Energy Committee Chairman J. Bennett Johnston (D-La.) warned that “long and hard” negotiations could still lie ahead.

But committee sources said the two bills are now broadly so similar that none of the remaining obstacles should be insurmountable.

“This bill has died a thousand times, but fortunately it had 1,001 lives,” one committee aide said. “A lot of details still have to be reconciled with the House, but we’re finally back on track.”

The legislation, the result of more than 18 months of debate and back-room bargaining, was first passed by the Senate, 94 to 4, in February. Approval came after a series of complex compromises bridged the regional and ideological divisions that for more than 10 years had blocked attempts to craft a national energy policy.

Adoption by the House three months later should have cleared the way for a House-Senate conference--the last step before final passage. But the Senate was forced to reconsider because the House version included new tax provisions.

That in turn exposed the bill to more delaying tactics by opponents and to opportunistic maneuvers by senators looking to attach unrelated amendments.

The bill was delayed for nearly two months after the Finance Committee added a measure calling for a tax on coal mines to pay the health benefits of retired miners whose former employers have gone out of business. It was finally resolved under a complex formula to finance it without raising taxes.

Another snag developed when Nevada Democratic Sens. Richard H. Bryan and Harry Reid threatened a filibuster because of a House-passed provision allowing the Energy Department to survey Yucca Mountain, Nev., as a potential site for a high-level nuclear waste repository.

The Nevada senators withdrew their threat after Johnston promised to oppose the provision in conference. It remains one of the more difficult differences that will have to be resolved.