Senate Prepares to Hash Out Energy Bill Issues

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A simmering debate that got under way last week in the Senate over new energy legislation is bound to hit a full boil this week. The bill's most contentious issues remain unresolved. They include gas mileage standards, renewable fuels, and price gouging.

Majority Leader Harry Reid likes to call this new Senate energy bill bipartisan — after all, three committees approved sections of it with votes from both parties.

Still, Reid can't resist comparing it to the last energy bill enacted two years ago that was drafted by the White House and had billions of dollars in tax breaks for oil companies.

"Our legislation would increase production of renewables," Reid said. "We do not believe in the president's theory, the Republicans' theory: drill, drill, drill, more of the same. It reminds me of Iraq."

Indeed, Minority Leader Mitch McConnell's biggest complaint about the new energy bill is that it does nothing to boost domestic oil production.

"Gas prices have escalated significantly since the new majority's taken over," McConnell said. "We had looked forward to this debate as an opportunity to do something real about our energy problems in this country, and so far, I'd have to say, we haven't made much progress."

An amendment McConnell backed allowing oil refineries on federal lands and Indian reservations was rejected, mainly by Democrats.

Republicans have not allowed the Energy Committee's Democratic chair, Sen. Jeff Bingaman, to hold a vote on another amendment which he considers central to the energy bill. It provides for a Renewable Portfolio Standard, which would force utilities to use more energy from wind, solar, geothermal, biomass, ocean tides, and landfill gas.

Senate Democrats hope to have an energy bill that could come up for a vote by late in the week.

What's in the Energy Bill?

The controversial energy bill now on the Senate floor takes a different approach than the bill pushed through by a Republican Senate in 2005. That measure sought to increase domestic oil production through subsidies and other incentives. With Democrats now in charge, the new bill focuses on decreasing consumption of oil and gasoline. Here's a look at the bill's major provisions:

Fuel Economy: The bill would, for the first time in decades, raise average fuel-economy standards for cars and SUVs or light trucks (up to 10,000 pounds) — from 25 mpg to 35 mpg by 2020 (a roughly 40 percent increase). This provision is the most controversial, especially with the auto industry, which argues that it could push up the production costs of each vehicle by thousands of dollars. That has led some Democrats to propose federal financial relief for automakers.

Renewable Fuels: The bill mandates the use of 15 billion gallons of biofuels annually by 2015 and 36 billion gallons by 2022 (up from 8.5 billion gallons in 2008). In the beginning, most of the biofuel would be corn ethanol. Beginning in 2016, the bill mandates annual increases of 3 billion gallons in the use of advanced biofuels – such as "cellulosic" ethanol, which can be made from switch grass, wood chips or agricultural waste. Oil refineries and food manufacturers – who warn that diverting corn to ethanol production could hike up food costs — oppose this provision.

Energy Efficiency: The bill sets energy-efficiency standards for home appliances, heating and cooling systems, lights and residential boilers. It requires federal agencies to get at least 15 percent of their electricity from renewable sources by 2015 and to reduce oil consumption by 20 percent. It also requires regular government review of efficiency standards.

Carbon Capture and Storage: The bill promotes research into methods of capturing carbon dioxide emissions from power plants and storing them underground.

Public Buildings: The bill requires energy efficiency in federal buildings, mandating a 20 percent reduction in operating expenses over five years through the use of more-efficient lights, heating and cooling. It also authorizes three demonstration projects that put "green-building" techniques into practice.

Energy Security: The bill asks the secretary of state to establish "strategic energy partnerships" with the governments of major energy producers and consumers to increase international energy security.

Price Gouging: The bill makes oil industry "price gouging" a federal crime during times when the president has declared a temporary "national energy emergency" — much like the emergencies that states declared after Hurricane Katrina. The Federal Trade Commission would also be given greater authority to investigate possible manipulation of the oil market – including refinery shutdowns. Oil companies and the Bush administration strongly oppose this provision, which has prompted a veto threat from President Bush.

SMALLER ITEMS:

The bill also includes a host of smaller items, such as:

—incentives to spur new inventions in light bulb efficiency

—block grants to state and local governments to reduce energy use

—a grant program to reduce school bus idling

—authorization for an initiative to improve car batteries

Written by Cathy Shaw and Anne Hawke.

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