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Senate near vote on US energy policy overhaul
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USA: April 26, 2002


WASHINGTON - The Democratic-led U.S. Senate will vote on a bill to overhaul national energy policy with $14 billion tax breaks for alternative fuels and energy-efficient technologies, a sharp contrast to tax breaks in the energy bill passed by the Republican-controlled House.


The legislation, with its emphasis on renewable fuels, conservation, and technology to make coal burn more cleanly, countered the energy bill approved last year by the House of Representatives with $33 billion in tax breaks aimed mostly at traditional oil and gas producers.

Senate lawmakers failed to adopt the most dramatic measures available to reduce U.S. dependence on foreign imports. They rejected a Bush administration proposal to tap oil reserves in the Arctic National Wildlife Refuge (ANWR) as well as a Democratic plan to double vehicle fuel efficiency.

Three Democrats - Dianne Feinstein of California, Charles Schumer of New York and Maria Cantwell of Washington - announced they would oppose the energy bill because it failed to strike "a balance between conservation and supply needs."

The lawmakers criticized the bill for not including stricter mileage requirements for sport utility vehicles, regulation of energy derivatives and ways to combat global warming. They also objected to a new requirement to triple the amount of corn-based ethanol in gasoline - to make the fuel burn more cleanly - which the three Democrats feared would lead to higher fuel prices.

The Senate was set to take a final vote on the bill yesterday afternoon.

SENATE BACKS MORE ETHANOL USE

After six weeks of debate, the Senate began its final day on the legislation by rejecting a move by California lawmakers to delay tough new requirements on ethanol use.

To help diversify U.S. energy supplies, the bill calls for boosting the amount of corn-based ethanol blended into gasoline from the current 1.5 billion gallons a year to 5 billion gallons annually by 2012.

In a 59 to 40 vote, lawmakers killed an amendment from Democrat Dianne Feinstein of California to delay by one year, until 2005, the start date for the new ethanol mandate.

Feinstein said she feared gasoline prices would rise if the state was not given more time to put refineries, storage facilities and other infrastructure in place to handle the extra ethanol that would be needed.

Separately, the Senate voted 57 to 42 to kill an amendment by Democrat Barbara Boxer of California to hold ethanol producers liable for any harmful effects of their product. "I don't want to see Big Oil...get off the hook," she said.

Lawmakers opposed to the amendment said it was unfair to make ethanol producers liable for making a product mandated by the federal government.

PLAN TO RAISE FUEL STANDARDS

Another amendment expected to be offered before a final vote on the bill was a bipartisan plan to reduce foreign oil imports by cutting the increase in the amount of oil used by U.S. cars and trucks by 1 million barrels per day by 2015.

Cars, trucks and sport utility vehicles currently consume 7.8 million barrels daily. They are forecast to use 10.6 million barrels a day by 2015, a 35 percent increase.

The fuel-savings plan offered by Democrat Tom Carper of Delaware and Republican Arlen Specter of Pennsylvania would set U.S. gasoline consumption at 9.6 million barrels a day by 2015, a 23 percent increase from current levels.

Unlike an earlier, unsuccessful proposal to boost fuel efficiency standards by 50 percent, the new plan would let the U.S. Transportation Department decide how much to increase vehicle mileage requirements.

Once the Senate votes on its energy bill, negotiators will work out differences with energy legislation passed last year by the House of Representatives. The House bill offers twice as many tax breaks to energy firms and allows drilling in ANWR.

The Bush administration, which called drilling in ANWR crucial to its new national energy policy, has not said it would veto any energy legislation without it.

President George W. Bush said this week that "hopefully" energy legislation sent to him will spur domestic energy production.

Other provisions already in the Senate energy bill would:

* Increase the amount of electricity generated from renewable energy sources like the sun and wind from the current 2 percent to 10 percent by 2020.

* Provide $14 billion in energy tax credits and incentives to help keep small oil and natural gas wells profitable when energy prices are low and provide rebates to consumers buying alternative-fuel vehicles.

* Offer billions of dollars in government loan guarantees to build a pipeline that would ship natural gas from Alaska to the lower 48 states.


Story by Tom Doggett


REUTERS NEWS SERVICE


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