House Passes Energy Bill, Battles Loom in Senate, White House

By J.R. Pegg

WASHINGTON, DC, August 6, 2007 (ENS) - In a rare Saturday session, the U.S. House of Representatives approved a far-reaching energy bill that increases federal support for energy conservation and efficiency programs and requires utilities to obtain 15 percent of their electricity from renewable energy sources. The House also passed a companion tax package, which would divert $15.3 billion in new taxes on oil and natural gas producers toward increased investment in renewable energy and conservation.

The approval of the two energy bills is a major victory for House Speaker Nancy Pelosi, who has made energy policy a centerpiece of her legislative agenda, and was widely praised by U.S. environmental groups.

House Speaker Nancy Pelosi (Photo courtesy Office of the Speaker)

"This is just the ambitious first phase in what will be a series of revolutionary actions for energy independence," Pelosi said. "But it is a very serious first step."

But the legislation has a long way to go before it is enacted into law and the Bush administration has already threatened to veto the measure.

In a statement issued last week, the White House criticized the House energy package, saying the two bills are "not serious attempts to increase our energy security or address high energy costs."

The statement said the House bills would reduce domestic oil and gas production, make the nation more dependent on foreign energy sources and unfairly target the oil and gas industries with higher taxes.

The House also still must reconcile its legislation with the Senate energy bill. Although many of the provisions are similar, forging a compromise with could prove difficult.

The Senate failed to approve a companion tax package and its energy bill has several key differences compared to the House bill - notably the inclusion of a mandated 40 percent increase in the fuel economy standards and a sevenfold increase in ethanol use. Neither provision is in the House bill.

Roof-mounted solar system at Georgia Tech Aquatic Center, Atlanta (Photo courtesy UCEP)

The Senate rejected the provision, with Democrats from Southern states joining Republicans over concerns that their states lack the renewable resources needed to meet the standard.

A similar regional battle erupted in the House over the plan, which was added Saturday as an amendment to the bill by a vote of 220-190.

The House provision calls for a 15 percent standard to be met by 2020, with utilities required to get at least 11 percent from renewable sources and allowed to obtain four percent through energy efficiency measures.

More than 20 states have similar standards in place or under development, but proponents say a federal standard is needed to rapidly drive increased use of renewable energy.

Currently less than three percent of the nation’s energy comes from wind, solar and other renewable energy sources.

Critics said the standard would cause undue economic harm to states without capacity for wind or solar energy.

The standard is "essentially an electricity tax" on utilities and their consumers, said Representative Dan Boren, a Democrat from Oklahoma, an oil producing state.

Congressman Dan Boren of Oklahoma (Photo courtesy Office of the Congressman)

"This isn't a question of whether or not we should encourage states to produce more electricity from renewable sources - we should," added Representative Gene Green, a Texas Democrat. The question is whether a one-size-fits-all federal mandate is the best way to accomplish this goal."

Proponents said the standard was in fact quite modest and argued that emerging renewable energy sources, particularly biomass, are available to every state in the nation.

"There is no state that does not have opportunities for renewable energy," said Representative Earl Blumenauer, an Oregon Democrat.

Representative Christopher Shays, a Connecticut Republican, told colleagues the goal is one the nation can easily meet by 2020.

Congressman Christopher Shays of Connecticut (Photo courtesy Office of the Congressman)

In addition to the renewable electricity standard, the massive bill approved Saturday includes new efficiency standards for appliances, lighting and buildings as well as tax breaks and subsidies for plug-in hybrid cars.

The measure contains tax credits for installing ethanol pumps at gas stations, support for development of cellulosic ethanol and biodiesel, and funds to study carbon sequestration.

It also calls on the federal government to be carbon neutral by 2050 and asks the White House to re-engage in international climate change talks and to accept binding limits on greenhouse gas emissions.

The House approved the bill by a vote of 241-172, despite Republican objections that it does little to boost domestic production of oil, natural gas, coal or nuclear and will fail to reduce gasoline prices.

"It doesn't do a thing about producing one drop of energy," said Representative Marsha Blackburn, a Tennessee Republican. "It does not get the price down at the pump."

Oklahoma oil well (Photo courtesy Lawrence Berkeley National Lab)

"You don't increase America's energy independence by raising taxes on our domestic energy industry," said Representative Jim McCrery, a Louisiana Republican.

The measure repeals tax breaks and subsidies granted to the oil and gas industry and earmarks those funds for renewable energy and conservation, including $6 billion in tax credit bonds for state and local "green energy projects."

Representative Pete Stark, a California Democrat, said the tax bill ends "senseless tax breaks and subsidies for giant oil and gas companies and [makes] needed investments in clean energy and efficiency."

At the end of the day, House lawmakers voted 221-189 to pass the companion tax package.

Copyright Environment News Service (ENS) 2007. All rights reserved.