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Home arrow Blog arrow 8/5/06- HOUSE PASSES ENERGY BILL

Written by Zachary Coile   
Monday, 06 August 2007
'Momentous' measure favors cleaner fuels, scraps tax breaks for oil and gas companies  
(08-05) 04:00 PDT Washington -- The House approved an energy bill Saturday that would steer the nation toward cleaner fuels and greater conservation, including a requirement that all electric utilities produce 15 percent of their power from wind, solar, biomass or other renewable sources by 2020.

House Speaker Nancy Pelosi, who spent the last week personally lobbying Democrats who opposed parts of the bill, called it "a momentous decision on energy and global warming."

The House also voted to repeal $16 billion in tax breaks given to the oil and gas industry, shifting the money into programs to boost biofuels, renewable energy and efficiency programs.

The measure provides $3.5 billion to install E-85 pumps and expand production of cellulosic ethanol - a provision that could help the Bay Area, which has emerged as a biofuels development hub with major research centers at UC Berkeley and Lawrence Berkeley National Laboratory.

The vote was a victory for Democrats, marking a U-turn from six years of Republican policies that mostly subsidized increased production of oil, gas, nuclear and coal energy.

But the White House already is threatening to veto the House bill, arguing that it would reduce oil and gas production in the United States and increase costs for consumers.

Democrats didn't get everything they wanted in the bill - including a big increase in federal fuel economy standards for all cars and trucks. Pelosi supports the proposed increase, but she yanked it from the bill in the face of staunch opposition from auto state Democrats.

Her move was widely seen as a tactical retreat. When the House energy bill is merged with a Senate energy bill this fall, Pelosi is expected to push to include a Senate provision to raise fuel economy to 35 miles per gallon for cars and trucks by 2020. She wouldn't commit to it after Saturday's vote, but added, "I don't want to be coy about it - it's something I support."

Republicans denounced the House bill, saying it would only make the country more dependent on foreign energy. House Republican Leader John Boehner, R-Ohio, dubbed it the Democratic "energy scarcity bill."

The package is heavy on symbolism, requiring the federal government's operations to be carbon-neutral by 2050 and approving a nonbinding resolution demanding the Bush administration re-engage in climate change talks with other nations and accept binding limits on greenhouse gases.

The bill also offers new tax credits for consumers to buy plug-in electric hybrids and fuel-cell vehicles as well as low-interest loans and grants for consumers to buy energy efficient appliances and install solar panels and geothermal pumps at their homes.

The energy bill was a key piece of the Democrats' "Six for '06" agenda that the party ran on last year, vowing to pass an energy independence package that would start to wean America off its reliance on foreign oil.

But for the last few weeks, the bill appeared in jeopardy as the Democratic caucus splintered along regional lines, with lawmakers from auto-producing states like Michigan opposed to the fuel economy standards and oil-state Democrats opposed to revoking tax breaks for the oil and gas industry.

Pelosi was buttonholing lawmakers all week, on the House floor and off, seeking to sway votes, especially "Blue Dog" Democrats, who were threatening to defect from the party line.

Lawmakers from Texas, the Midwest and Southeast opposed the requirement that utilities produce 15 percent of their power from renewable energy, saying it could raise electricity bills for ratepayers.

"Renewable resources of electricity generation are truly regional in nature, and not every region of the country has them in sufficient quantity," said Rep. Rick Boucher, D-Va.

But sponsors of the measure countered that every state has access to some kind of renewable energy - whether solar, biomass, wind, geothermal or hydropower. Rep. Jay Inslee, D-Wash., noted that most of America is better located for solar power than Germany, which is rapidly installing solar panels.

"We know this is an achievable goal," Inslee said. Sponsors also argued that 24 states already have renewable electricity standards, and California is on track to produce 20 percent of its energy from renewables by 2010.

The renewable energy measure ultimately passed 220-190.

Oil and gas producers lobbied furiously to try to block rollbacks of several key tax breaks. Rep. Gene Green, D-Texas, who represents an oil-producing district, complained that top Democrats were treating the energy industry like an "ATM for Congress" to pay for programs.

But many Democrats felt the oil and gas industry had been a generous beneficiary of tax breaks under a Republican Congress, and that it was time to pare down the subsidies at a moment when energy companies are posting record profits. The tax measure passed 221-189.

In a light moment, Republicans offered their own tax plan, an effort to preserve the tax breaks for oil and gas producers. But when word leaked that it also included a tax increase - most members had no idea - Republicans rushed to switch their votes. Rep. Charles Rangel, D-N.Y., chairman of the tax-writing Ways and Means Committee, stood with a big smile on the floor, handing out red "no" cards to GOP members.

President Bush opposes the House's tax provisions, which his advisers assert would reduce energy production. The House will have to negotiate the provision with the Senate, which narrowly defeated a similar $32 billion tax measure.

Rep. Henry Waxman, D-Los Angeles, said he's not yet convinced the president will block the bill, which passed 241-172.

"I can't see how he can veto this energy bill," Waxman said. "This is a bill that puts us on the path to energy independence - and he's said rhetorically that he's for that."

House, Senate measures

A comparison of highlights in the energy legislation passed Saturday by the House and the bill approved by the Senate in June. The two will have to be merged.


-- House calls for $16 billion in new taxes on oil companies over 10 years by removing several of the industry's tax breaks. Senate bill has no tax provisions.


-- House calls for incentives to build biomass factories and for research into cellulosic ethanol and biodiesel. Senate has similar provisions.

-- House requires electric utilities to produce 15 percent of electricity from renewable energy sources. Senate has no such requirement.


-- House has new efficiency standards for appliances, lighting and buildings, and creates bonds to be used by cities and counties for energy conservation. Senate has appliance and lighting efficiency standards.


-- House bill has nothing on automobile fuel economy. Senate bill increases auto mileage requirement to 35 mpg by 2020 for cars, SUVs and small trucks, about a 40 percent increase.


-- House bill has no mandate on ethanol use as a replacement for gasoline. Senate requires a sevenfold increase in ethanol use to 36 billion gallons a year by 2022.

-- House provides tax credits for installing E-85 pumps. Senate requires half of new cars manufactured by 2015 be capable of running on E-85.


-- House provides tax breaks, subsidies for research into better batteries for plug-in hybrid cars and up to $4,000 tax credit for purchasing such cars. Senate provides loan guarantees and other assistance for advanced diesel and hybrid battery technology.


-- House calls for an assessment of areas for underground carbon dioxide storage and calls for developing large-scale storage demonstration projects. Senate has similar provision.

Source: Associated Press

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