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Senate expected to approve energy bill

Posted on: Friday, 29 July 2005, 01:56 CDT

By Julie Vorman

WASHINGTON (Reuters) - The U.S. Senate was poised on Friday to approve a $14.5 billion energy bill that is championed by the White House as a way to increase U.S. supplies and reduce demand but criticized by environmental groups.

Supporters say the measure will revive America's nuclear power industry, boost oil drilling, convert coal into a cleaner-burning fuel and use home-grown corn to stretch gasoline supplies.

Environmental groups and some Democrats criticize its extensive tax breaks, subsidies and loan guarantees as a lavish gift to an industry enjoying near-record profits.

The Senate was scheduled to vote on Friday on the energy bill, following the lead of the House of Representatives that approved it by a wide margin on Thursday.

President Bush -- who spent the past four years pressing Congress to overhaul U.S. energy policy -- was expected to sign it into law soon afterward.

The bill will have no short-term impact on gasoline prices or oil imports, Republicans acknowledged. But longer term, they said it would revitalize all types of energy production.

"For once, Congress and the United States are going to do something important that we will benefit from, not tomorrow, but for the next five or 10 years," said Republican Pete Domenici of New Mexico, one of the bill's authors.

"This bill will create jobs, job security and clean energy," he said. "Who could ask for anything more?"

Most Americans will feel the impact of the 1,700-page bill when daylight-saving time is extended by two weeks in 2007 to save energy. Homeowners will also be able to claim a tax credit of up to $500 to install more energy-efficient windows, and another modest credit for buying a hybrid fuel vehicle.

COAL, OIL, NUCLEAR ARE BIG WINNERS

The bulk of the bill's incentives are aimed at companies and utilities that produce energy.

Of the total $14.5 billion, $2.6 billion is in tax breaks for oil and gas drilling and the expansion of pipelines and refineries. Electric utilities are in line to get $3.1 billion in tax credits and subsidies to build the first nuclear power plants since the 1979 Three Mile Island accident.

Coal companies will get $2.9 billion to invest in new technology to generate gas or electricity with less air pollution. About $3.1 billion is earmarked for tax credits for renewable energy sources such as wind, biomass, geothermal, landfill gas and hydropower.

The bill also orders the U.S. oil industry to nearly double the amount of corn-distilled ethanol it uses as an additive in gasoline, giving farmers a new market for their crop.

Energy Secretary Sam Bodman said the package "will reduce energy demand, increase energy supplies, and update our aging energy infrastructure." It will also promote "research and development efforts to transform that way we produce and use energy in the future," he added.

Some Senate Democrats said they would reluctantly vote for the bill even though it fell far short of steering the nation on a new energy course.

The legislation failed to curb oil demand with stricter fuel mileage for gas guzzlers or encourage more renewable forms of energy, said Democrat John Kerry of Massachusetts, his party's 2004 presidential nominee.

"What we need is an energy policy that is as bold and as big as the challenge is to the country. That is not what we are getting in this bill," Kerry said. "This does nothing to reduce American dependence on foreign oil."

The U.S. oil addiction means the nation must import 60 percent of the 21 million barrels per day consumed.

Source: REUTERS

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