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House set to approve $14.5 bln energy bill

July 28, 2005

By Julie Vorman

WASHINGTON (Reuters) – The U.S. House of Representatives
was set on Thursday to approve an energy bill packed with $14.5
billion in tax breaks and incentives and hailed by Republicans
as a major change in U.S. energy policy.

Environmental and consumer groups criticized the
legislation as a giveaway to an industry enjoying record
profits with crude oil prices near $60 a barrel, while spending
little on ways to curb demand or encourage renewable energy.

The bill will pass “overwhelmingly” in the House, predicted
Rep. Joe Barton, a Texas Republican and author of much of the
1,700-page legislation.

The Senate is expected to approve it on Friday, just before
Congress recesses for its summer vacation. President Bush has
indicated he will sign the energy bill, which he called one of
his top priorities in 2005.

“The enactment of this bill is needed to put us on a path
to greater energy and economic security,” said Treasury
Secretary John Snow. “It will help American workers, families
and businesses by increasing energy efficiency and conservation
and reducing our dependence on foreign sources of energy.”

Other Republicans acknowledged the bill could not cut oil
imports in the near term. The United States imports 60 percent
of the 21 million barrels of oil consumed daily.

“We’re going to have imported oil as part of our economy
for a long, long time,” Barton said.

BILLIONS TO INDUSTRY

Of the bill’s $14.5 billion in tax breaks and incentives
over 10 years, nearly $9 billion is earmarked for oil and gas,
electricity and coal companies. Less than $5 billion will be
spent on energy efficiency and renewable energy programs.

Republicans say it will encourage companies to revive the
nuclear power industry by building the first new plants since
the Three Mile Island accident in 1979. Coal is another big
winner in the bill, which offers incentives to cut pollution
from coal-fired electricity plants.

Oil and gas companies will get royalty relief for
production from deep water in the Gulf of Mexico, an inventory
of energy deposits off Florida and other states, and tax breaks
for increasing the capacity of existing oil refineries.

American farmers will benefit from the bill’s requirement
to nearly double U.S. ethanol use to 7.5 billion gallons (34
billion liters) by 2012. Ethanol, refined from corn, is added
to gasoline to make it burn more cleanly.

Consumer groups criticized the bill, saying it would hand
over billions in taxpayer dollars to the energy industry.

The U.S. Public Interest Research Group said it calculated
all the tax breaks, guaranteed loans and direct spending “would
provide more than $25 billion to polluting energy interests.”

Democrat Henry Waxman of California criticized last-minute
items added to the bill after House and Senate negotiators
halted debate. Among them was a $1.5 billion fund for drilling
research that would benefit an energy consortium based in House
Majority Leader Tom DeLay’s Texas district, Waxman said.

“If Congress has an extra $1.5 billion to give away, the
money should be used to help families struggling to pay for
soaring gasoline prices — not to further enrich oil and gas
companies that are rolling in profits,” Waxman said.

A spokesman for DeLay defended the fund, saying it was in
the energy bill approved by the House in April. The measure was
not in the Senate’s version of an energy bill.

The final version of the bill dropped some environmentally
friendly measures, such as the Senate’s requirement the federal
government to find ways to cut U.S. oil demand, and improve
fuel mileage for gas guzzlers.




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