Provisions to Curb Oil Use Fall Out of Energy Bill

July 26, 2005

By CARL HULSE

WASHINGTON, July 25 - Working furiously to try to strike a deal on broad energy legislation, Congressional negotiators on Monday killed two major provisions aimed at curbing consumption of traditional fossil fuels like oil, natural gas and coal.

House members rejected an effort to incorporate a plan passed by the Senate to require utilities to use more renewable energy like wind and solar power to generate electricity. They also defeated a bid to direct the president to find ways to cut the nation's appetite for oil by one million barrels a day.

Backers of the initiative to identify the oil savings said it was an alternative to the politically difficult approach of increasing automotive gas mileage standards and would demonstrate that Congress was serious about cutting the nation's dependence on oil imports.

"We are having an energy bill that is doing so much on the supply side that we need to address the demand side," said Representative Henry A. Waxman, Democrat of California, who said the goal was the "bare minimum of what we ought to be doing."

But Republican opponents of the plan said the fuel savings target could lead to unpopular restrictions like mandatory car pools and put too much responsibility for achieving the goal in the hands of the president.

"Just telling the president to wave a magic wand and tell each and every one of us that we need to conserve may sound good," said Representative Joe L. Barton, Republican of Texas and chairman of the Energy and Commerce Committee, "but those of us elected by the people every two years have a different view of that."

Senator Jeff Bingaman of New Mexico, the senior Democrat on the Energy and Natural Resources Committee, said his plan to require power plant operators who now rely on coal, oil and natural gas to increase their use of renewable fuels was a low-cost, market-driven approach to cutting demand for fossil fuels and easing air pollution.

Under the proposal, which has repeatedly passed the Senate, utilities would have to generate at least 10 percent of their electricity through renewable fuels by 2020.

"It would reduce our dependence on traditional polluting sources of electricity," Mr. Bingaman said.

But opponents of the initiative, known as the renewable portfolio standard, asserted it would drive up the cost of electricity, conflict with similar state initiatives and put a burden on utilities in some regions where acceptable alternative fuels are in short supply.

The energy bill has come under criticism from some lawmakers and conservation groups for doing too little to cut into the nation's dependence on foreign oil while increasing oil and gas production. The two provisions dropped Monday were seen by the environmental community as among the few bright spots in the energy bill.

While House and Senate negotiators on energy policy met into the night in an effort to agree on an energy measure that could clear the House and Senate this week, a separate group of lawmakers was trying to hash out the tax elements of an energy proposal.

Lawmakers and aides said they expected the tax breaks and incentives to cost in the neighborhood of $11.5 billion: more than sought by the House and White House but less than approved by the Senate. Should lawmakers agree on that figure, the tax package was expected to include a substantial emphasis on tax credits for energy efficiency.

Senator Charles E. Grassley, Republican of Iowa and chairman of the tax-writing Finance Committee, told reporters he believed negotiators could also potentially come to agreement this week on a long overdue $286 billion highway and transit bill. As lawmakers sought to clear a backlog of bills before recessing for the summer, other unresolved business included the Central American Free Trade Agreement and repeal or revision of the inheritance tax.

At the White House, Scott McClellan, the spokesman, said the administration was eager to see an energy bill since President Bush has been calling for a new energy policy since taking office in 2001. "Four years is long enough to wait for comprehensive energy legislation," Mr. McClellan said.

The prospects for an energy bill improved markedly on Sunday when the negotiators said they would abandon a contentious plan to provide producers and distributors of the gasoline additive MTBE legal immunity from some pollution lawsuits. That plan stalled the bill two years ago and was looming as a significant obstacle again this year.

Last modified: 28 November 2005

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