A comprehensive energy measure has moved a large step forward, with Senate passage, but tough negotiations lie ahead with the House, which approved a markedly different bill. Senate approval came on June 28 by an 85-12 vote.

(Photo from the
office of Sen. Pete Domenici)

"This bill is many things," says its main sponsor, Energy and Natural Resources Committee Chairman Pete Domenici (R-N.M.). He says it has provisions to strengthen the nation's electric grid, promote energy conservation, stimulate nuclear power, expand ethanol use and provide "jobs, jobs and jobs."

The energy panel's top Democrat, Jeff Bingaman of New Mexico, said, "This bill does not bring down the price of gasoline at the pump in the near term. This bill does not bring down the price of natural gas...or the price of electricity in the near term. But I think in the long term it puts in place some good policies that will...move us in directions that will be very beneficial to American consumers, American industry and the American economy in general."

The next step will be a conference with the House and Domenici told reporters at a press conference after the vote that the Senate will name its negotiators quickly. But he also said that, "We have matters in disagreement" with the House.

Perhaps the major difference between the two versions is over the gasoline additive methyl tertiary butyl ether. The House bill provides liability relief for MTBE producers, but the Senate version does not. Opposition to the MTBE liability provision from senators from both parties helped kill an early energy package in 2003. But Domenici said House leaders have said they are working on a compromise and adds, "I think it will be resolved some way or another in a way that will be satisfactory to senators" who have been concerned about the issue. "We'll get it solved together," Domenici said but added that the House has to "take the lead."

Another disparity is over the amount and type of tax breaks. The House energy tax provisions total $8.1 billion over the 2005-2015 period and emphasize incentives for production while the Senate provisions total $14.1 billion and are more heavily weighted to alternative fuels and energy efficiency.

A third contentious issue is renewable energy. The Senate has included a provision requiring electric utilities to use wind, solar, geothermal and other renewable sources for 10% of the power they sell in 2020. But the House has no such provision.

Other key elements in the Senate version include: requiring 8 billion gallons of ethanol to be used by 2012; repeal of the 1935 Public Utility Holding Company Act, which industry officials and lawmakers say should increase investment in the nation's electricity grid.

The Senate bill also extends Price-Anderson Act liability protection for Dept. of Energy contractors until the end of 2025. The House bill does the same. That indemnification now is slated to expire Dec. 31, 2006.

The measure calls for inventorying oil and gas resources on the Outer Continental Shelf and has a non-binding "sense of the Senate" resolution that congress should pass mandatory limits on greenhouse gas emissions.

The Senate bill's overall cost is about $11.4 billion through 2010 including the tax provisions. That compares with $31 billion for the failed 2003 bill, a staffer says.