Volume 85 Issue 51 | p. 10 | News of The Week
Issue Date: December 17, 2007

Senate Clears Energy Bill

With tax provisions removed, Senate overwhelmingly passes bill
Department: Government & Policy
Credit: Courtesy of Pete Dominici
Credit: Courtesy of Pete Dominici
Credit: Courtesy of Harry Reid
Credit: Courtesy of Harry Reid

By an 86-8 vote, early in the evening of Dec. 13, the Senate passed energy legislation (H.R. 6) establishing a path to better vehicle fuel efficiency, greater use of biofuels, and more energy-efficient products. The road to Senate passage, however, was rough.

Earlier in the day, the bill was blocked by one vote due to Republican opposition to a $21 billion, 10-year tax package, which was then part of the bill.

The tax provisions would have ended some $13 billion in oil and gas tax breaks and offered the breaks instead to a mix of renewable energy, carbon sequestration, and biofuels projects.

While support for the final bill without the tax provisions was bipartisan, support for the earlier one was not. All but one Democrat voted for the bill that included the taxes, and all but eight Republicans opposed it. Senate members were under considerable pressure from oil interests to continue the breaks.

The American Petroleum Institute strongly opposed the package, arguing it would hurt oil and gas production and raise gasoline prices. It also opposed provisions aiding biofuels. But Senate Majority Leader Harry M. Reid (D-Nev.) remained firm: "Our bill eliminates these tax breaks for big oil—an industry raking in record profits of half a trillion dollars in the last six years—so we can invest more in clean energy."

Pete V. Domenici< (R-N.M.) was among senators opposing the tax package and warned that "these are bad taxes for those who want this energy bill to pass." Senate Minority Leader Mitch McConnell (R-Ky.) called them a "millstone" that would block the entire bill, and President George W. Bush vowed to veto the bill over taxes.

When Reid failed to muster the votes needed for passage, however, he backed off and promised to strike the tax package. McConnell joined Reid and agreed to bring the modified bill back to the floor later that day, which occurred.

It was the second time in a week that Democratic leadership revised the energy bill to get Republican support in the closely divided upper body. Earlier, Senate Democrats jettisoned a section requiring utilities to generate 15% of their electricity from renewable sources by 2020. That provision was hotly opposed by utilities and their allies in Congress.

The final bill increases vehicle fuel-efficiency standards to 35 mpg by 2020, the first jump in efficiency standards in 32 years. It also requires that 36 billion gal of biofuels be blended with gasoline by 2022, and it calls for a host of new energy-efficiency requirements in lighting, appliances, buildings, and other categories.

The House had cleared their version of the bill in early December, which included a tax package. The Senate bill will now return to the House.

House Speaker Nancy Pelosi (D-Calif.) called the bill "historic and sweeping" and said the House would pass it next week. President Bush has said he will support the Senate bill.

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