Senate OKs Energy Bill Linked to Conservation

The Senate approved a bill Thursday that would revamp the nation’s energy policy, paving the way for talks with the House on one of President Bush’s domestic priorities.

The bill is a mix of relatively modest steps geared more toward promoting conservation and the use of alternative power sources. The House bill, taking its cue from Bush, is tilted more toward increasing production.

Left out of the Senate bill were two high-profile items: oil and gas drilling in Alaska’s Arctic National Wildlife Refuge that is sought by Bush, and tougher vehicle miles-per-gallon standards that environmentalists want. Those defeats reflect the difficulty of passing sweeping legislation in a narrowly divided Congress, and many were disappointed by the final form of the Senate legislation.

Critics say it falls short of the goal of substantially reducing U.S. dependence on oil, terming it a step in the right direction but not a leap. But after six weeks of often-acrimonious debate, the Senate approved the bill overwhelmingly, 88 to 11.

Both California senators, Democrats Barbara Boxer and Dianne Feinstein, were among those opposing the measure. They say a provision requiring ethanol to be added to gasoline would spike prices at the pump.

The bill is packed with a wide range of measures. These include a federal loan guarantee to spur construction of a $20-billion, 2,100-mile pipeline to carry Alaska natural gas to the Lower 48 states and a requirement that utilities generate more electricity from alternative sources, such as sun and wind. It offers close to $15 billion in tax incentives, roughly evenly divided between conservation and production measures.

It extends a cap on the nuclear industry’s liability in accidents, a provision designed to remove an obstacle to expansion of nuclear power. It sets new energy efficiency standards for traffic lights. And it allows states to let solo drivers of part-electric, part-fuel hybrid vehicles use carpool lanes.

The Senate vote came more than a year after rolling power blackouts in California and energy price hikes throughout the country propelled energy policy to the top of the Washington agenda. More recently, political instability in the Middle East has underscored the issue’s importance.

Bush, an ex-oilman, unveiled a national energy plan in May that called for expanding nuclear power, spending $2 billion for research on “clean coal” technologies and opening more federal land to oil and gas exploration, including parts of the Arctic refuge. The plan also included some environmentally friendly measures, such as tax incentives for residential solar power and fuel-efficient hybrid vehicles. Most of those measures are in the House bill passed in August.

Bush said Thursday that he looks forward to working with House and Senate negotiators to produce a compromise bill. “It is imperative that America increase its energy independence,” he said.

The administration has said the Senate bill does too little to promote domestic production.

Officials at the Independent Petroleum Assn. of America echoed that complaint, saying the measure falls “far short” of the domestic energy production incentives in the House bill. But the group praised the Senate bill for including tax credits for small, independent power producers.

Environmental and consumer groups adamantly opposed to the House bill had a range of criticisms about the Senate version. They charged it would do little to promote cleaner fuels or to reduce global warming.

“Congress should go back to the drawing board,” said Anna Aurilio, legislative director for the Public Interest Research Group, founded by consumer advocate Ralph Nader.

But Sen. John F. Kerry (D-Mass.) defended the Senate, saying that, while it was “far from perfect, it’s far and away better than the disastrous effort put forward by the House.”

Kerry cited provisions that would take initial steps toward addressing climate change and greenhouse gas emissions, which scientists believe contribute to global warming. A compromise plan agreed to Thursday would set up a voluntary inventory of greenhouse gases and a registry for companies that reduce their emissions of the gases. This registry would be used to give companies credit for early reductions in any future programs that call for cutting such emissions.

“This is more activity than we’ve seen on climate change in the Congress, I think, ever, which is a very positive sign,” said Eileen Claussen, executive director of the Pew Center on Global Climate Change, which works with companies that want to address the problem.

Leaders of the Republican-led House and Democratic-controlled Senate said they are eager to strike a deal on a final bill.

Rep. W.J. “Billy” Tauzin (R-La.), chairman of the House Energy and Commerce Committee, said he looks forward to negotiations.

The House bill would permit oil drilling in the Arctic refuge. House Republicans have said they plan to push for Arctic drilling, but Senate Democrats are unlikely to accept any bill that includes it.

The Senate measure calls for close to $15 billion in tax incentives to promote conservation and production, compared with $33 billion in the House version.

The House bill does not include the provision--popular in the politically important Midwest--to triple the amount of ethanol added to gasoline to 5 billion gallons annually by 2012. But ethanol, made mostly from corn, enjoys widespread support in the Senate.

In last-ditch efforts to alter the Senate bill, lawmakers rejected an effort Thursday to include a measure seeking to limit the growth in oil consumption by motor vehicles.

The lawmakers also stripped the bill of a measure that would have restored tougher Clinton-era efficiency standards for air conditioners that were rolled backed by the Bush administration.

And they defeated a Feinstein move to delay by one year, until 2005, the start date for adding ethanol to gasoline. Feinstein contended that gas prices will rise because of the additional cost of bringing ethanol from the Midwest to California. Ethanol advocates dispute that.

“When the price of gasoline does spike and people are calling, I will refer them to your office, senator,” Feinstein said, scolding Sen. Charles E. Grassley (R-Iowa) after he extolled the virtues of ethanol.

Boxer said the bill does “more harm than good for the people of California.” Along with opposing the ethanol provision, she complained about the Senate’s rejection of a measure she said would have protected consumers from gouging in electricity markets.

Voting for the bill were 42 Democrats, 45 Republicans and independent James M. Jeffords of Vermont. Opposing it were eight Democrats and three Republicans.

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Senate and House Energy Bills

Key points in the Senate and House bills: ..TE: Arctic National Wildlife Refuge

Senate

Continues ban on oil and gas drilling throughout ANWR’s entire 19 million acres.

House

Opens 1.5 million acres of ANWR to oil and gas drilling, with 2,000 acres affected at any one time.

Heating Aid For Poor Families

Senate

Boosts annual Low Income Assistance and State Energy Program grants to $3.4 billion; raises weatherization program to $500 million in 2005.

House

Boosts annual Low Income Assistance and State Energy Program grants to $3 billion; expands funding for weatherization program.

Senate

Gives $14 billion in breaks, evenly divided between conservation and production incentives.

House

Gives $33 billion in breaks, mostly weighted toward traditional oil, natural gas and coal industries.

Tax Breaks

Vehicle Mileage Standards

Senate

Orders Transportation Department to review effect of higher mileage requirements on vehicle safety and auto worker jobs; exempts pickup trucks from any increases in fuel efficiency requirements.

House

Orders Transportation Department to reduce U.S. fuel use by 5 billion gallons from 2004 to 2010, an amount equal to a two-week supply of U.S. motor fuel.

Alternative Fuels

Senate

Triples the amount of ethanol to be blended into gasoline to 5 billion gallons per year in 2012; triples the amount of electricity generated from renewables, such as solar and wind, by 2020.

House

Offers tax credit equal to 50% of the incremental cost of an alternative fuel vehicle; provides business tax credit of 25 cents per gallon for alternative fuel sold at retail.

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Times staff writer Elizabeth Shogren contributed to this report.

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