Senate Democratic leaders Friday failed to win the 60 votes that were needed to end debate on the broad energy bill (HR 6) and bring it up for a final vote. The setback sets the stage this week for Senate action on an energy measure that could be a modified version of the one passed by the House last Thursday.

The Senate voted 53-42 against invoking cloture, with most of the opposition coming from Republicans and even some Democrats, such as Sens. Robert Byrd of West Virginia and Mary Landrieu of Louisiana.

The Democratic leadership “will probably work on the bill over the weekend and bring it up [this] week,” possibly Tuesday, said Bill Wicker, a spokesman for the Senate Energy and Natural Resources Committee. This could mean that the two most contentious parts of the measure will be modified or excised — a $21 billion tax incentive package, which is funded in large part through the rollback of about $13.5 billion in tax breaks for oil and natural gas producers; and a mandate requiring utilities to produce 15% of their electricity from renewable fuels by 2020.

“If the Senate alters the House-passed bill, the bill passed by the Senate will need to be voted on by the House again (with no further changes) before it can go to the president,” said energy analyst Christine Tezak of Stanford Group Co.

The broad energy bill, which Democrats say charts a “new direction” in U.S. energy policy, was approved in the House last Thursday by a vote of 235 to 181, with the opposition coming from Republicans and conservative “Blue Dog” Democrats.

The White House issued a statement immediately following passage of the House bill, saying the president would veto the bill in its current form. “Democratic leaders in the House today pushed a partisan bill that members had very little opportunity to study before the vote, which they knew was unacceptable to the president and had no chance [of] being signed into law. Their proposal would raise taxes and increase energy prices for Americans. That is a misguided approach and if it made it to the president’s desk, he would veto it.”

The Bush administration is specifically opposed to the repeal of tax breaks for the oil and natural gas industry and the renewable electricity mandate.

“If the Bush administration vetoes this bill, we believe it is very unlikely there will be sufficient margin [in the Senate] to override it,” Tezak said. In the Senate, Sen. Pete Domenici (R-NM) pledged to “do everything in my power to defeat this measure so we can get to work on a bipartisan bill.”

The House energy bill drew objections from the oil and gas industry. This bill “establishes an unfortunate precedent of funding one energy source at the expense of another,” said Barry Russell, president of the Independent Petroleum Association of America. While the development of renewable energy sources is essential, “we should not be impairing the development of America’s most viable energy resources,” he noted.

The measure “sends the wrong — and potentially harmful — message about an essential part of America’s energy supply,” Russell said.

The American Gas Association said the House bill would discourage the expansion of gas distribution systems by increasing the depreciation period for distribution pipelines. It noted that this comes only two years after Congress in the Energy Policy Act of 2005 reduced the depreciation for these systems to 15 years from 20 years.

“We have addressed most of the White House concerns” with the energy bill, House Speaker Nancy Pelosi (D-CA) told reporters last Thursday. She said six of eight of the White House’s concerns “were positively addressed” in a letter, including those related to the renewable electricity standard.

Pelosi called the broad energy bill an “historic opportunity” for the United States to declare its energy independence. “This vote on this legislation will be a shot heard around the world for energy independence,” she said.

“It may be historic, but it is not positive,” countered Rep. Joe Barton (R-TX). He said the Democratic legislation turns the energy market into one that is mandated by the government. Moreover, he complained that Republicans had little input into the energy bill. “We had zero, nada, zip — no input.”

“I have had some reservations about the bill,” and it is not a measure the House Energy and Commerce Committee would have written, acknowledged Rep. John Dingell (D-MI), chairman of the committee. But nevertheless he said he voted in favor of it.

The measure, which is said to be a compromise of the two starkly different energy bills passed by the House and Senate this summer, also mandates an increase in the fuel economy standard to 35 miles per gallon by 2020 for new cars, light trucks and SUVs.

This would be the first increase in the fuel economy standard by Congress since 1975. House leaders estimate that the increase would save American families $700 to $1,000 a year at the pump, with net consumer savings reaching $22 billion in 2020.

The House bill also establishes a renewable fuel standard that would mandate the production of at least 36 billion gallons of ethanol and biofuels to be blended with gasoline by 2022, and includes a swath of energy efficiency incentives.

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