A pared-down energy bill, minus the hotly disputed $21.8 billion tax package and renewable electricity mandate, was overwhelmingly passed by the House Tuesday. The next stop for the measure is President Bush, who is expected to sign the legislation.

The House, by 314-100, voted out the measure (HR 6), which raises the fuel economy standard for the first time in more than 30 years, increases the standard for production of renewable fuels and establishes higher energy efficiency standards. The bill cleared the Senate last Thursday by a vote of 86-8 (see Daily GPI, Dec. 17).

The bill the House approved was significantly changed from the one 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. President Bush had opposed the energy bill initially passed by the House because of the tax title and renewable electricity mandate. But he signaled that he would sign the bill now that those two provisions were removed.

Sen. Jeff Bingaman (D-NM), chairman of the Senate Energy and Natural Resources Committee, applauded the House’s approval of the omnibus energy bill. But he vowed 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 legislation would reduce the amount of fuel consumed by cars and trucks by raising the corporate average fuel economy (CAFE) standard to 35 miles per gallon by 2020, would increase the production of renewable fuels to 36 billion gallons by 2022 from the current level of nine billion, and would promote greater energy efficiency for consumer appliances and the federal government.

Prior to the House vote Tuesday, Rep. Joe Barton of Texas, the ranking Republican on the House Energy and Commerce Committee, distributed a “Dear Colleague” letter in which he urged Republicans to vote against the measure. “Rarely in your career in Congress will you be happier that you voted ‘NO’ than you will be today on the ‘no energy’ energy bill. If enacted in its current form, it will almost certainly lead to higher energy prices for every form of energy and less choice for all Americans in how they use energy,” he wrote.

The Industrial Energy Consumers of America (IECA), which represents industrial natural gas consumers, expressed concern about the impact of the energy bill’s renewable fuels standard on gas consumption. “If only one half of the energy [bill’s] renewable fuels standard mandate was met by using ethanol, it would consume an additional 0.9 Tcf of natural gas. This is the equivalent of 4.4% of the nation’s 2006 natural gas supply. This is natural gas supply that today does not exist,” said IECA President Paul N. Cicio in a letter Tuesday to Congress.

“Higher demand without increased supply will raise the price of natural gas and electricity for every homeowner, farmer and manufacturer,” he said.

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