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Energy Bill Passes Senate With Bipartisan Support

The measure encourages alternative resources more than the House's plan does. Bush calls for a compromise version before the August recess.

June 29, 2005|Mary Curtius and Richard Simon | Times Staff Writers

WASHINGTON — The Senate overwhelmingly approved a new national energy policy Tuesday that would provide more than $18 billion in tax breaks to spur more efficient use of resources, greater development of nuclear energy and increased reliance on renewable fuels such as ethanol.

The Senate measure, adopted by a bipartisan 85-12 vote, would offer no immediate reduction in gasoline prices at the pump. But some of its tax breaks are aimed at increasing domestic oil production.

Senate supporters cautioned that tough negotiations lay ahead with the House, which passed its version of an energy bill in April. The Senate measure places more emphasis on encouraging the development of alternative and renewable sources of energy than the House measure does.

For instance, the Senate bill would require that renewable energy sources -- such as wind and solar -- generate 10% of the electricity that utilities produce by 2010. Such sources now supply about 2% of the nation's electricity.

For The Record
Los Angeles Times Thursday June 30, 2005 Home Edition Main News Part A Page 2 National Desk 1 inches; 48 words Type of Material: Correction
Energy bill -- An article in Wednesday's Section A on Senate passage of an energy bill reported that it would require that renewable energy sources, such as wind and solar, generate 10% of the electricity that utilities produce by 2010. The deadline to reach that amount is 2020.

The bill also would require U.S. gasoline refiners to double the amount of the corn-based ethanol additive used in fuel, to 8 billion gallons by 2012. California would be exempted from that standard during the summer, because of concerns that it would boost the state's air pollution levels.

Focusing on more traditional energy sources, the bill would provide incentives to encourage the construction of nuclear power plants.

The bill would provide tax credits to encourage investment in so-called clean coal facilities that turn coal into gas to produce electricity more cleanly.

It also would encourage conservation by extending and increasing an existing tax break for the purchase of hybrid cars. It would give tax deductions for energy-efficient buildings and the manufacture of energy-efficient appliances.

Other provisions would increase natural gas imports.

The measure also would direct the president to find ways to reduce the country's projected demand for oil by 1 million barrels a day by 2015 -- a requirement opposed by the White House.

California Sens. Barbara Boxer and Dianne Feinstein, both Democrats, were among those supporting the bill.

With gas prices remaining near an all-time high and the summer vacation travel season underway, President Bush welcomed the Senate's action and called on Congress to get an energy bill to him to sign before the August recess.

"I applaud the Senate for working in a bipartisan way to pass comprehensive energy legislation consistent with what I proposed in 2001," Bush said in a statement. "This bill will help our economic growth by addressing the root causes of high energy prices and reducing our dependence on foreign sources of energy."

The House has passed an energy bill three times since 2001, and the Senate had twice passed energy legislation before Tuesday's vote. Each time, the chambers have failed to produce a final bill.

One key sticking point this year is expected to be a House provision that would partially shield producers of methyl tertiary-butyl ether, or MTBE, from lawsuits arising from the gasoline additive, which has been found to contaminate groundwater. The Senate bill contains no such provision.

A dispute over the MTBE liability provision between the two chambers helped kill the 2003 energy bill.

Lawmakers have been trying to negotiate a compromise on the MTBE issue, and say they are close to agreement. Rep. Charles F. Bass (R-N.H.) said the talks were focused on creating a company-financed fund to compensate communities whose groundwater had been polluted by MTBE.

The Senate bill also includes no provisions to sell leases in a small area of the Arctic National Wildlife Refuge that would allow oil and gas drilling there, as the House bill does. The Senate has given preliminary approval to a separate measure that would authorize the drilling.

The author of the Senate bill expressed confidence that House and Senate negotiators could settle all these differences and send a measure to Bush.

"Our pledge in going to the House is: This time we're going to get an energy policy that both houses will agree upon and take it to the president of the United States. That's urgent," said Sen. Pete V. Domenici (R-N.M.), chairman of the Senate Energy and Natural Resources Committee.

The White House has expressed concerns about some of the spending proposals in the House and Senate versions. Both bills, for instance, include a provision that would authorize $1.25 million for an Idaho nuclear reactor that would produce hydrogen. The White House says it opposes that initiative.

Energy Secretary Samuel Bodman, who appeared with Domenici and other senators after Tuesday's vote, said Bush had instructed him to help House and Senate negotiators reach agreement -- and to ensure that the costs of the bill stay close to the nearly $7 billion the president supports.

"We will be working very hard ... to see what can be done about reducing the cost of it," Bodman said.

That may be hard to do.

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