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Friday, July 29, 2005 - Page updated at 11:24 AM

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Measure passes House amid some grumbling

WASHINGTON — President Bush is about to get an energy bill. It costs more than he wanted, puts off his wish for Arctic oil exploration and does nothing to immediately lower the soaring price of gasoline or lessen dependence on Middle East oil.

But the bill, which the House of Representatives passed yesterday, 275-156, and which faces easy passage in today's planned vote in the Senate, presents Bush with a policy he's made a priority since his first days in office.

Supporters said the legislation would establish a framework for developing a wider mix of energy sources in coming years, including wind turbines, lower-pollution coal plants and new nuclear reactors.

Lawmakers avoided a certain fight in the Senate by leaving out one of Bush's top energy goals: opening the Arctic National Wildlife Refuge in Alaska to oil drilling. House Republicans promised to pursue that issue separately.

Negotiators also dropped language pushed by House Majority Leader Tom DeLay, R-Texas, that would have offered legal protection to the makers of MTBE, a fuel additive that has contaminated water supplies. The provision was widely opposed in the Senate and would have imperiled its passage.

White House press secretary Scott McClellan said the bill would address causes of high energy prices, but "we didn't get into this overnight and we're not going to get out of it overnight."

Seventy-five Democrats joined Republicans in moving the 1,725-page legislation through the House.

Winners and losers


A look at the winners and losers in the bill:

WINNERS

Midwest farmers The legislation more than doubles the amount of ethanol, mostly derived from corn, that states must use to 7.5 billion gallons in 2012.

Oil and gas companies They'll get about $2.6 billion in tax breaks. The bill also makes it easier to drill on publicly owned lands.

Wind, solar and geothermal-energy companies They would get about $2.7 billion in federal subsidies to make green power more cost competitive with burning fossil fuels.

Automakers They avoided new requirements to increase vehicle fuel efficiency and got an extension of a tax credit for folks who buy hybrid vehicles.

Nuclear industry It gets incentives to construct plants and tax breaks for energy produced from them.

Appliance buyers The bill offers tax credits of up to $200 for buying energy-efficient washing machines, dishwashers and refrigerators.

Solar-power enthusiasts They can get up to a $2,000 tax credit for installing solar electric panels or hot-water heaters.

Losers

Environmentalists They say the bill fails to reduce U.S. dependence on oil, does not address the threat of global warming and makes no significant new investment in clean energy. It also exempts the oil and gas industries from portions of the Clean Water Act.

Taxpayers The bill provides at least $14.5 billion in tax breaks when consumers already are paying high prices at the pump and for heating and air-conditioning.

LNG opponents Provisions strip states' rights to have the final say on large liquefied-natural-gas terminals.

Offshore-drilling opponents A provision calls for surveying all the coastlines for oil and gas, which is feared to be a first step toward drilling off the coast. But the bill will permanently ban new drilling for oil and gas in the Great Lakes.

Makers of MTBE A provision that would have protected makers of the gas additive from liability lawsuits was dropped when it became clear it would scuttle the whole bill. Dozens of communities are suing over MTBE contamination in their water supply. Gannett News Service

In the Washington delegation, Democrats Rick Larsen and Norm Dicks joined Republicans Doc Hastings, Cathy McMorris and Dave Reichert in voting for the measure; Democrats Brian Baird, Jay Inslee, Jim McDermott and Adam Smith voted against it.

"It is not a perfect bill," said Rep. John Dingell of Michigan, the top House Democrat involved in crafting the legislation. "But it is a solid beginning to developing an energy strategy for the 21st century." Rep. Joe Barton, R-Texas, who chaired the House-Senate conference that crafted the final compromise legislation, called it a bill "for America's future."

Sponsors said it would improve the nation's electricity grid and foster energy conservation and production. In a move widely awaited in the Farm Belt, it also calls for doubling the use of corn-produced ethanol in gasoline to 7.5 billion gallons a year by 2012.

It would extend daylight-saving time by a month, an extra three weeks in the spring and an additional week in the fall, to save energy, starting in 2007.

The legislation would provide $14.5 billion in energy tax breaks over 10 years, including $2.6 billion for the oil and gas industry. It reduces the cost of those tax breaks with about $3 billion in revenue-producing measures, for a net cost of about $11.5 billion.

"This bill is packed with royalty relief, tax breaks, loan guarantees for the wealthiest energy companies in America even as they are reporting the largest quarterly profits of any corporation in the history of the United States," complained Rep. Edward Markey, D-Mass.

Opponents said the measure would do little to help consumers, cut gasoline prices or lessen dependence on foreign oil, which accounts for 58 percent of domestic consumption. They also said the measure fleeces taxpayers by providing billions in tax breaks and other subsidies to the oil and gas industry, whose profits have been soaring because of record oil prices.

Supporters said they hope the legislation will encourage development of alternative fuels that could eventually displace some gasoline use. They said the bill also could lower gasoline prices — which are more than $2 a gallon — by encouraging expansion of refineries and more drilling for oil.

The bill also would direct loan guarantees and other subsidies to encourage nuclear-power-plant construction and develop carbon-capturing and other technologies to assure continued use of coal to produce electricity.

About $1.3 billion in tax breaks is earmarked for conservation and efficiency programs, including credits for buying hybrid gas-electric cars and energy-efficiency improvements in homes.

Other key provisions of the bill include:

• $1 billion for oil and gas producers and refiners by shortening depreciation periods for gas distribution lines to 15 years from 20 years.

• $1.24 billion to electric companies for reducing the depreciation period on transmission and distribution lines.

• $2.75 billion in tax credits for use of various renewable energy sources in the production of electricity.

• A 10 percent personal tax credit to homeowners for energy-efficiency improvements.

Material from The Washington Post is included in this report.

Copyright © 2005 The Seattle Times Company


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