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US Senate to vote on energy bill, House talks loom

Posted on: Monday, 27 June 2005, 20:54 CDT

By Chris Baltimore

WASHINGTON (Reuters) - The Senate is poised to approve awide-ranging package of energy incentives on Tuesday, butheated negotiations with the House of Representatives loombefore the bill reaches the president's desk.

The Senate's bill would double use of corn-blended ethanolby 2012, shore up electric grid reliability and offer $14.1billion in tax breaks and incentives to boost domesticproduction. The energy bill is expected to pass.

Missing from the Senate plan are several contentious issuesthat the House included in a bill passed in April, includinglimited liability for makers of a water-polluting fuel additiveand drilling in Alaska's Arctic National Wildlife Refuge.

President Bush has told Congress to give him a bill toapprove by Aug. 1 as crude oil prices hit records above $60 abarrel, but administration officials concede the bill willoffer U.S. consumers little short-term relief.

House-Senate energy negotiations, which would follow Senateapproval, could be easier if congressional leaders place MTBEliability on a highway funding bill that Congress couldconsider this week. MTBE is a rival to ethanol as a fueladditive.

Republican Rep. Joe Barton, chairman of the House EnergyCommittee, is weighing whether to attach liability protectionfor makers of MTBE -- methyl tertiary butyl ether -- to thehighway bill, Democratic aides said.

A Barton spokeswoman declined to comment, but a Democraticspokesman for the House Transportation and InfrastructureCommittee said Barton is pushing that option.

A spokesman for Sen. James Inhofe, chairman of the SenateEnvironment and Public Works Committee with some jurisdictionover both bills, dismissed the idea as "nothing but a rumor."

Talks to resolve MTBE liability won't begin until theSenate acts, an energy lobbyist said on condition of anonymity.

"As soon as the Senate passes its bill it's show time," thelobbyist said.

A $284 billion House-passed bill for highway and transitconstruction must be reconciled with a $295 billion Senateversion. Current federal highway grants are being allocatedunder temporary legislation that expires June 30.

Another bone of contention is the energy bill's pricetag.The Senate plan contains about $14 billion in tax incentives,vs. $8 billion in the House version.

The White House supports about $6.7 billion in taxincentives over 10 years, going to conservation and efficiencyprojects. A substantial amount of funds in the House bill wouldgo to encourage traditional oil and gas drilling, which theWhite House says are unneeded with oil prices above $60 abarrel.

The House bill would also extend U.S. daylight savings timeby two months to save 100,000 barrels of oil per day, a itemthat will have to be reconciled with the Senate.

Under the House bill, daylight-saving time -- when clocksare turned forward by one hour -- would start on the firstSunday of March, one month earlier than now. It would end onthe last Sunday in November, a month later than currently.

Source: REUTERS

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