President Bush Wednesday signed into law energy legislation (HR 6) that focuses on conserving energy and the production of renewable fuels as opposed to the development of traditional oil and natural gas resources. The president’s action comes one day after Congress voted out the measure.

The 822-page “Energy Independence and Security Act of 2007” was signed by Bush during a ceremony at the Department of Energy. The Democrat-crafted bill mandates an increase in the fuel economy standards for cars and light trucks to 35 miles per gallon by 2020, marking the first increase in the standard for passenger cars since 1975. The current standard is 25 miles per gallon.

It also would expand the renewable fuels standard to nine billion gallons in 2008 and progressively increase it to 36 billion gallons by 2022. The measure makes a commitment to develop cellulosic ethanol by requiring that by 2022 the United States produce 21 billion gallons of advanced biofuels, such as cellulosic ethanol. The U.S. currently produces approximately five billion gallons of ethanol from more than 130 ethanol plants.

The legislation would effectively phase out most common types of incandescent light bulbs by 2012-2014, increasing the energy efficiency standards of light bulbs by 30%. Within 18 months of full implementation of the first energy efficiency standard, analysts estimate savings of more than 65 billion kWh of electricity, according to the Senate Energy and Natural Resources Committee.

HR 6 also accelerates the implementation of new energy efficiency requirements for federal buildings, primarily through new requirements on the General Services Administration, which owns and leases in excess of 340 million square feet in more than 8,900 buildings located in every state. It calls for federal buildings to reduce their energy consumption by 30% by 2015, saving an estimated 60 trillion Btus of energy.

In addition, the bill aims to further develop carbon capture technology and expand funding for geothermal energy development. With advances in technologies and favorable tax policies, it estimates that 5,500 MW of geothermal energy could come online and be brought to market.

Bush signed the legislation only after two hotly disputed items were dropped — the $21.8 billion tax package and a renewable electricity mandate. The House, by 314-100, voted out the bill Tuesday; the Senate passed it last Thursday by a vote of 86-8 (see Daily GPI, Dec. 17).

The bill the House approved was significantly changed from the one that it sent the Senate earlier this month (see Daily GPI, Dec. 7). Senate Democratic leaders were forced to drop the contentious tax title and renewable electricity standard, which would have required utilities to produce at least 15% of their electricity from renewable fuels by 2020, due to intense opposition from Republicans (see Daily GPI, Dec. 14; Dec. 13; Dec. 10). The tax part of the bill drew strong objections because it would have been funded by repealing existing oil and natural gas tax breaks.

The legislation, although it offers no significant benefits to the natural gas and electricity industries, is a major victory for the energy industry because the two controversial provisions were dropped.

However, Sen. Jeff Bingaman (D-NM), chairman of the Senate Energy and Natural Resources Committee, said Tuesday that the stricken renewable electricity mandate and tax package “will not be blocked forever” on Capitol Hill. “We will be back next year to vote on them, and we will keep up our advocacy until Congress finally catches up to the American people.”

The American Gas Association (AGA), which represents natural gas utilities, and other trade groups were disappointed that the bill failed to open up more areas to gas development. While “greater production, more efficiency and clean technologies will improve the nation’s energy outlook now and in the future, AGA is disappointed that [the] bill did not address the need to encourage increased natural gas supplies from America’s land and waters,” said AGA President David N. Parker.

“Hopefully the Congress will address this shortcoming in the near future.”

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