Senate Energy Bill Headed for Face-Off with House

Photovoltaic panels at Oberlin College's Adam Joseph Lewis Center for Environmental studies.

The Senate's bill uses tax incentives to encourage the use of solar energy, while the House bill emphasizes traditional fossil fuels. These solar energy panels are part of a building at Oberlin College in Ohio. Robb Williamson/National Renewable Energy Laboratory hide caption

itoggle caption Robb Williamson/National Renewable Energy Laboratory

The U.S. Senate voted 85-12 to pass comprehensive energy legislation on Tuesday. But tough negotiations now loom, as the bill moves to the House-Senate conference committee. There, the two chambers will need to work out their differences on what should be in the bill sent to the White House.

President Bush has said that he would like to see a bill passed by the Congress and delivered to his desk by August. The differences between the House and Senate are so great, however, that most senators believe Bush's target won't be met.

Congress has gotten this far with an energy bill twice before in recent years, only to see the bills die in conference.

Key differences between the House and Senate bills include:

  • The Senate is budgeting $18 billion for energy-related tax incentives; the House is asking for $8 billion in tax breaks for the energy industry.

  • Senate tax breaks focus on promoting renewable energy sources like corn-based ethanol fuel, wind and solar, while also providing incentives for cutting energy consumption through the use of technologies like electric-gasoline hybrid vehicles.

  • The House primarily targets its tax incentives on traditional energy industries like electric utilities, as well as promoting fossil fuels like oil, natural gas and coal.

  • The Senate bill mandates a doubling of ethanol use in gasoline to 8 billion gallons per year by 2012, a measure intended to cut the amount of oil imported to the United States, as well as help farmers who grow the corn from which ethanol is derived.

  • The House bill provides liability lawsuit protection for makers of the gasoline additive MTBE, a chemical intended to help curb air pollution from cars that can be poisonous if it leaches into groundwater.

  • The Senate bill does not touch sensitive issues like drilling for oil in Alaska's Arctic National Wildlife Refuge, something the president wants.

The MTBE issue is a particularly thorny one for Congress. Many believe failure to compromise over it caused the sinking of an energy bill two years ago.

Even if a compromise is reached and an energy bill is passed by Congress and signed by the president, most experts believe that it will not have an immediate impact on rising gas prices.

The Associated Press contributed to this report.

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