The House Thursday voted out Democrat-crafted energy legislation (HR 6) that is expected to face a Republican filibuster in the Senate and a potential veto by President Bush.
The broad energy bill, which Democrats say charts a “new direction” in U.S. energy policy, was approved by a vote of 235 to 181, with most of the opposition coming from Republicans and conservative “Blue Dog” Democrats. The road ahead could be rocky due to two contentious provisions in the measure — a $21 billion tax incentive package, which is funded in large part through a 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.
Senior advisors to President Bush have recommended that he veto the energy legislation if it is presented to the White House in its current form, according to a statement issued by the Office of Management and Budget (OMB) Thursday. “The administration strongly opposes using the federal tax code to single out specific industries [such as oil and gas] for punitive treatment,” it said. In addition, the OMB statement took issue with the “one-size-fits-all” federal renewable electricity mandate, which it says would result in higher electricity costs for consumers in areas where renewable resources are less available and could place new strains on electricity reliability. Southern utilities, such as Southern Co., are opposed to the renewable 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,” said energy analyst Christine Tezak of Stanford Group Co. Sen. Pete Domenici (R-NM) has threatened to filibuster the bill for its failure to include nuclear power as a renewable source, Tezak noted.
Senate Majority Leader Harry Reid (D-NV) said a cloture vote — to cut off the filibuster — could occur as early as Saturday. It is unclear whether Reid has the 60 votes needed to get the bill through the Senate.
“Already, members of the Senate — on both sides of the aisles — are discussing the ‘necessity’ of making changes to the bill or dropping sections altogether. We believe this refers to the controversial renewable energy standard for utilities and/or the tax title. Members are seeking commitment to changes or amendments in exchange for a vote on the cloture motion,” Tezak said.
“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,” she noted.
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 said.
The measure “sends the wrong — and potentially harmful — message about an essential part of America’s energy supply,” Russell said.
“We have addressed most of the White House concerns” with the energy bill, House Speaker Nancy Pelosi (D-CA) told reporters 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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