Energy bill hits Senate roadblock

Energy bill hits Senate roadblock
GOP aims to strip tax, renewable electricity provisions
By William L. Watts, MarketWatch
Last update: 12:22 p.m. EST Dec. 7, 2007
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WASHINGTON (MarketWatch) -- Senate Republicans on Friday blocked efforts to advance a wide-ranging energy bill, aiming to strip it of provisions that would roll back tax breaks for big oil companies and require utilities to generate a large chunk of electricity from sources such as solar and wind energy.
The action comes a day after the House passed the energy bill, which would require the first increase in automobile fuel-economy standards in decades, boost taxes on big oil companies by $13 billion over the next 10 years and require a major increase in the use of ethanol and other biofuels.
A procedural effort by Senate Majority Leader Harry Reid, D-Nev., to close off debate on the package fell seven votes short of the 60 needed.
Sen. Pete Domenici of New Mexico, the senior Republican on the Senate Energy Committee, said the vote signaled that a final package must "do something about" the tax provisions and the renewable portfolio standard, which would require utilities to produce 15% of electricity from renewable sources by 2020.
Senate Energy Committee Chairman Jeff Bingaman, D-N.M., said he was eager to work with Domenici and other lawmakers, setting the stage for votes next week.
"I do think that we can make some changes that would make this bill acceptable to a vast majority of senators," Bingaman said.
The White House reiterated a veto threat, citing the tax and renewable electricity provisions.
The bill would require the first boost in corporate average fuel economy standards since 1975. It would boost requirements by 40% to an industry average of 35 miles per gallon by 2020.
Under current law, auto makers must meet a fleet average of 27.5 miles per gallon for cars and 22.2 miles per gallon for small trucks, including vans and sport-utility vehicles.
The tax provisions in the bill add a total of $21 billion in new tax incentives over the next decade that are offset by eliminating breaks and raising levies on the nation's largest oil producers.
The tax provisions include a long-term extension of tax credits for renewable electricity, as well as credits for carbon-capture and sequestration demonstration products; credits for biofuel production, including cellulosic ethanol; tax-credit bonds for renewable energy measures and the extension of other incentives.
Republicans said the renewable energy provisions were unrealistic and would put undue burdens on utilities in states lacking access to resources considered "renewable" under the bill.
William L. Watts is a reporter for MarketWatch.

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