Senate drops tax package, boosts auto fuel rules
The U.S. Senate passed an energy bill on Thursday that would raise the country's automobile fuel efficiency standards for the first time in 30 years.
But the Senate dropped $32 billion in clean-energy incentives after Republicans objected to about $29 billion in extra taxes on big U.S. oil companies.
Minutes before midnight, the Senate voted 65-27 to approve the Democratic rewrite of U.S. energy policy, which would mandate a four-fold use in ethanol in motor gasoline by 2022 and raise vehicle fuel-efficiency standards by 10 miles per gallon, or to 35 miles per gallon by 2020.
The Senate has repeatedly rejected past attempts to boost the 1970s-era Corporate Average Fuel Economy (CAFE) program, and the House of Representatives has yet to approve the bill.
The bill barely scraped by a procedural vote after Republicans raised concerns that Democrats could try to revive the scuttled $32 billion tax package in a bargaining session with the House to resolve differences.
"If anyone is concerned about some trick to put this energy tax package in the bill ... they need to tell me how," Majority Leader Harry Reid said, pointing out that such a move would be close to impossible.
Dropping the $32 billion in clean-energy tax incentives is a big loss for developers of wind, solar and geothermal projects, who say the funds are needed to turn a profit.
Big U.S. oil companies like Exxon Mobil Corp. would have footed most of the bill for the clean energy incentives. Republicans warned that the new taxes would chase oil companies away from American oil basins and boost gasoline pump prices.
"It's very easy politically to stick it to the big boys and that's the political game that's being played out on the floor of the United States Senate," said Sen. Larry Craig, Idaho Republican, who was among the Republicans who voted to block the tax package.
Resolving one of the thorniest issues in the bill, lawmakers including Alaska Republican Ted Stevens and California Democrat Dianne Feinstein struck a deal to raise CAFE standards for all cars, trucks and SUVs, which the Senate approved by a voice vote.
If it becomes law, the plan could save 1.2 million barrels per day of U.S. oil use by 2020, according to the Sierra Club.
Struggling General Motors Corp., Ford Motor Co. and DaimlerChrysler AG's Chrysler Group had lobbied fiercely for a less stringent standard.
Earlier this week, Democratic leaders in the House delayed action on fuel economy standards as part of energy legislation that House Speaker Nancy Pelosi wants to pass in July.
The Senate abandoned a plan to require utilities to get 15 percent of their power supplies from renewable sources by 2020, and rejected incentives for making transportation fuels from coal.
The bill also allows the Justice Department to sue the OPEC oil producers group for price manipulation, which the White House has threatened to veto after the Senate supported it 70-23 in a vote on Tuesday.
By Chris Baltimore
Reuters
Friday, June 22, 2007; 1:00 AM
H.R. 6 (CLEAN Energy Act of 2007)
Vote Summary
Question:
On Passage of the Bill (H.R. 6, As Amended)
Vote Number:
226 Vote Date: June 21, 2007, 11:25 PM
Required For Majority:
1/2 Vote Result: Bill Passed
Measure Number:
H.R. 6 (CLEAN Energy Act of 2007)
Measure Title:
An Act to move the United States toward greater energy independence and security, to increase the production of clean renewable fuels, to protect consumers from price gouging, to increase the energy efficiency of products, buildings, and vehicles, to promote research on and deploy greenhouse gas capture and storage options, and to improve the energy performance of the Federal Government, and for other purposes.
Vote Counts:
YEAs 65
NAYs 27
Not Voting 7