The Senate has worked on an energy bill for six weeks. It was expected to debate the tax breaks as well as a provision that would require a big jump in U.S. ethanol use before the bill is wrapped up at the end of the week.

The taxation portion of the energy bill was nearly derailed when Republicans threatened to add a "rider" or an amendment seeking the permanent repeal of the federal estate tax, an issue unrelated to energy. Senate leaders, however, worked out a compromise to withdraw the estate tax provision by promising a separate debate on that issue by June 28.

The temporary estate tax repeal was part of the $1.35 trillion, 10-year tax cut signed into law last year by President George W. Bush.

TAX BREAKS FOR RENEWABLES

Sen. Max Baucus, a Montana Democrat, said the proposed $14 billion of energy tax benefits was evenly divided between production and conservation.

For example, renewable fuels such as wind, biomass and solar would receive a total of $2.3 billion in tax credits while more energy efficient appliances and buildings would get $2.2 billion in benefits. Alternative fuels for vehicles would get $1.8 billion in tax incentives.

The Senate plan would reward energy companies with $1.9 billion in incentives for so-called "clean coal technology" and $4.4 billion in credits for shale oil, natural gas and coalbed methane. Another $1.3 billion would be earmarked for restructuring the U.S. electric utility industry and decommissioning aging nuclear plants.

"It's for the good of the country that these provisions be brought up and included (in the energy bill)." Baucus said.

ETHANOL DEBATE COMING

Senate leaders were also seeking agreement to limit the number of final amendments to the energy bill so it could be wrapped up this week.

"It is time that we bring this to conclusion," said Mississippi's Trent Lott, the Republican leader of the Senate. The chamber should vote on the entire bill by Thursday or Friday, Lott said.

An issue expected to provoke heated debate is Senate Majority Leader Tom Daschle's proposal to triple by 2012 the use of ethanol, a gasoline additive made mostly from corn.

The plan is popular among farm state lawmakers, who say it makes a cleaner-burning fuel as well as providing a market for growing stockpiles of U.S. corn.

But Democrats Dianne Feinstein of California and Charles Schumer of New York contend such a mandate would mean gasoline shortages in their states, driving prices sharply higher for consumers. Both states now use large amounts of a gasoline additive known as MTBE to make a cleaner-burning fuel.

MTBE is being phased out by most U.S. states because it contaminates groundwater.

The Senate has already rejected two other controversial proposals, which were part of the energy bill debate. One would have opened the Arctic National Wildlife Refuge to oil drilling, and another would have required U.S. automakers to double the fuel efficiency of sport utility vehicles and cars.