Democratic negotiators on Capitol Hill are putting the finishing touches on a final energy bill that lawmakers could take up as early as this week, congressional aides said.

"They're almost finished with it. The leadership wants it done by the time they return" Monday (Senate) and Tuesday (House), said Bill Wicker, a spokesman for the Senate Energy and Natural Resources Committee.

"They are pretty close to an understanding" on a fuel economy standard, Wicker said. A deal is in the offing that would require all passenger vehicles sold in the United States to reach a combined fleetwide average of 35 miles per gallon by 2020, Congressional Quarterly's Green Sheets reported. The bill also is expected to have some kind of renewable fuel component.

House Speaker Nancy Pelosi (D-CA) said she hopes to pass energy legislation by the middle of the week, it noted.

While many details of the legislation still aren't known, it's believed that the measure may not include $16 billion in additional taxes on the oil and natural gas industry. But the energy industry may have dodged a bullet only temporarily. "If it [the $16 billion tax package] isn't in this bill, it'll pop up in some other bill down the road," said a legislative official for a gas group.

The House, in order to fund green initiatives, voted in August to repeal $16 billion in tax breaks for producers that Congress approved in the Energy Policy Act of 2005 (see NGI, Aug. 13). Republicans fought off efforts by Democrats to include an even larger tax package in the Senate energy bill (see NGI, June 25).

The White House threatened to veto an energy bill that would impose additional taxes on any industry and/or would force holders of flawed deepwater oil and gas leases issued by the Interior Department in 1998-1999 to either renegotiate the terms of the leases, pay an excessive fee or face being barred from future leasing in the Gulf of Mexico. It's unclear whether the language with respect to the faulty leases will be in the new bill. "It could possibly be in the bill [this] week. If it's not, it also could pop up down the road," the legislative official said.

He expects several other House provisions that seek to repeal oil and gas producer benefits enacted in EPAct to be "probably dropped" as well..

The House and Senate did not hold a formal conference this year due to the striking dissimilarities in their energy bills. Instead, Democratic staffs from both houses have been meeting informally since September to meld the two measures.

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