Senate bill aims to cut reliance on fossil fuels

THE BALTIMORE SUN

WASHINGTON - Setting up what is likely to be a lengthy fight with the House, the Senate overwhelmingly approved an energy measure last night designed to reduce the nation's reliance on fossil fuels, while still providing tax breaks for traditional energy producers.

The bill, approved by an 88-11 margin, includes tax credits for renewable energy and conservation and loan guarantees for a new Alaskan natural gas pipeline.

But it leaves out a major element of legislation proposed by President Bush: a plan to drill for oil in the Arctic National Wildlife Refuge. The House-passed version, which was far more generous to the energy industry, includes a provision for Arctic drilling.

In a statement, Bush said he was "pleased that the House-Senate conference committee will have before it the elements of a comprehensive energy policy."

Bush said he was hopeful that Congress would be able to combine their two approaches in a final package that would embrace both. Bridging differences between the two chambers could prove exceedingly difficult, however.

'Consumer-friendly'

Senate Democratic Leader Tom Daschle of South Dakota, while acknowledging that the Senate measure fell short of its initial goals, called it "far more responsible, progressive [and] consumer-friendly" than Bush's plan or the House-passed bill.

The Senate measure would encourage alternative energy sources - especially the corn-based fuel additive ethanol - through $14 billion in tax breaks for producers over 10 years. It would also provide loan guarantees for a $20 billion Alaskan gas pipeline.

The measure would ban the gasoline additive MTBE, a chemical that has made its way into drinking water supplies through contaminated waterways in some states.

Consumers would get tax credits for energy conservation, but environmentalists failed during the Senate debate to impose much tougher fuel economy standards on automakers.

Half-hearted votes

Like many senators, Democrats Barbara A. Mikulski and Paul S. Sarbanes of Maryland said they voted in favor of the measure only half-heartedly.

Mikulski mused about whether the "sum of the bill is better than its parts." Sarbanes said he hoped he would like the energy measure better after it emerged from negotiations with the House.

"Probably not," Sarbanes said. "But it has no chance of getting better if we don't get it to conference."

One of those who voted against the plan, Democratic Sen. Charles E. Schumer of New York, said there was "a real demand to pass an energy bill so we can go home and say we passed an energy bill. ... I have rarely seen in my 22 years in Congress a greater missed opportunity."

'Better than nothing'

Senators from New York and California, all of whom voted against the bill, criticized its ethanol provision, which they said would cause higher prices and gasoline shortages on both coasts.

It would require greater use of ethanol, to the benefit of both the ethanol industry and farmers.

"Something is better than nothing," was the kindest endorsement Republican Sen. Larry E. Craig of Idaho could offer for the legislation, patched together on the Senate floor over more than six weeks of debate. Like most Republicans, he had fought unsuccessfully to allow drilling in the Alaskan refuge.

The bill now heads to what are expected to be protracted negotiations with the Republican-led House, which has approved legislation much closer to the Bush proposal.

The House bill not only includes approval for the Alaska drilling, but $33 billion in tax breaks for energy producers - more than double what the Senate approved - most going to the oil, gas, nuclear and coal industries.

Agreement doubted

Prospects for the two sides reaching an agreement acceptable to both chambers are considered chancy at best.

House Republican Whip Tom DeLay of Texas said he was hopeful, despite his clear disagreement with the Democratic-shaped measure.

"Despite the Do-Nothing Daschlecrats, Republicans continue to deliver on the issues of economic and national security," DeLay said in a statement. "Now it's important that we move quickly to work out the differences between the House and Senate bills to improve our independence from foreign sources."

Others were less sanguine about the odds for an agreement.

"I'd say the prospects were murky," said Sen. John F. Kerry, a Massachusetts Democrat, who led the successful fight against Alaska drilling and a futile battle to require a 50 percent increase in overall fuel efficiency over the next 12 years by the auto industry.

Opponents

Leading environmental groups said they hoped the legislation will die in conference.

"This bill is outrageous, it doesn't deserve to survive," said Daniel Becker of the Sierra Club, which helped defeat the Alaska drilling proposal. "It's larded up with tax breaks and other special favors for the energy industry."

Big winners in the Senate bill include the producers of ethanol - particularly the Archer-Daniels-Midland Co., which has been a generous campaign contributor to both parties. Senators voted to triple the amount of the corn-based additive in the nation's gasoline supply and resisted efforts to weaken the requirement.

The measure also includes provisions intended to boost the nuclear power industry, partly through research on new reactors, and to help develop clean coal technology.

As an incentive to increase the use of alternative energy sources, such as solar and wind power, electric utilities would have to generate more power - 10 percent of new supplies by 2020 - from renewable sources.

Republican Sen. John McCain of Arizona, who voted against the measure, criticized tax breaks such as the one designed to increase the use of animal waste as a fuel source for electric power generation - a popular provision in places like the Delmarva peninsula, which has plenty of chickens and an excess of manure.

"We have tax breaks for chicken litter, now bovine and pig waste," he said. "What's happened to man's best friend, the dog? Why can't he make a deposit to help reduce our energy dependence?"

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