Deal Is Near on Overhaul of Energy Policy

WASHINGTON — House and Senate negotiators worked into the early morning hours today on what is expected to be the first overhaul of national energy policy to pass Congress in more than a decade -- a far-reaching measure aimed at boosting domestic fuel supplies and providing relief, over the long term, from high prices.

The bill, long sought by President Bush, would provide tax breaks and other incentives to spur domestic production of oil, natural gas, coal and nuclear power and promote conservation. It also would strengthen electricity grids, a response to the 2000-2001 California electricity crisis and the 2003 Northeast blackout.

Negotiators worked past 2:30 a.m. EDT to complete the legislation, a display of the bipartisan anxiety over possible political fallout from high gasoline prices. House and Senate tax writers separately neared completion of a package of about $11 billion in energy tax breaks

The full House and Senate are expected to approve the bill this week, before Congress breaks for its summer recess.

Prospects for final passage brightened after negotiators on Sunday deleted a contentious provision that doomed the measure in 2003: protection for the manufacturers of methyl tertiary-butyl ether -- a gasoline additive blamed for polluting groundwater supplies around the country -- from environmental lawsuits seeking money for cleanup. The bill approved by the conferees two years ago contained the liability suit protection, and the Senate refused to pass it. Critics have questioned whether the bill will achieve its goal of reducing U.S. dependence on foreign oil, which accounted for about 58% of America's consumption last year.

Though the bill contains a wide range of measures, including extending daylight saving time and promoting energy projects on Indian land, environmentalists have complained that it lacks any requirement to increase miles-per-gallon standards for vehicles or strong measures to cut emissions blamed for global warming.

Subsidies in the bill also drew criticism.

"What has happened to the Republican faith in the free market?" said Rep. Edward J. Markey (D-Mass.), assailing "one big pork-barrel section" that he said would provide federal loan guarantees for "just about everything under the sun."

Rep. Henry A. Waxman (D-Los Angeles), another senior member of the House Energy and Commerce Committee, called the bill a "giveaway" to the energy industry.