With the Senate's failure to end debate on the House energy bill Friday and send it to a vote, staff members will begin negotiating a version that could soften or eliminate many of the most controversial provisions.
The House energy bill, approved 235-181 on Thursday, increases fuel efficiency standards by 40 percent by 2020 to an industrywide average of 35 miles per gallon. It also would mandate that electricity companies get 15 percent of their energy from renewable resources and adds $21 billion in taxes on oil companies, among other provisions.
Although there no longer is conflict over the automotive regulatory portions of the bill, some Republicans are opposed to the mandated electricity standards, increased taxes on the oil industry, absence of provisions to allow drilling in remote areas of Alaska and the bill's failure to make it easier to add nuclear power to the nation's power grid.
The Senate voted 53-42 on Friday, failing to end debate on the House bill. Under Senate rules, 60 votes are necessary to move to a final vote on most bills.
A coalition of industry groups late Friday sent a letter to Senators urging them to reject the bill.
Nonetheless, Sens. Jeff Bingaman, D-N.M and Pete Domenici, R-N.M., the chairman and ranking member of the Senate Energy Committee, respectively, said staffers would try to reach a compromise that can pass the Senate and be signed by President Bush.
But time is running out.
The House wants to recess for the year by Friday, while the Senate expects to depart Dec. 21. If the Senate approves changes to the bill, it has to be sent back to the House for consideration. If Congress can't agree, the political football gets tossed into the presidential primary season — making a bill far less likely to pass.
The biggest hurdle in the Senate is the House bill's $21 billion in new taxes on oil and gas companies that rescind tax breaks for exploration.
Oil “is the most profitable industry on earth and we need to pay for the bill,” said Sen. Debbie Stabenow, D-Lansing.
But the White House and many oil industry allies are adamant against any new taxes. There is concern that new taxes will be passed on to consumers in the form of higher gasoline prices.
The other primary concern in the bill is the renewable energy standard, which would require utilities to generate 15 percent of electricity through renewable resources like solar, wind and even “trash combustion.”
“This bill could pass in a day if they stripped the taxes out and the renewable portfolio standard” for electricity production, said Sen. John Cornyn, R-Texas.
Democrats are trying to figure out whether to drop the tax provisions or the renewable power standard, not both, said Jim Manley, a spokesman for Senate Majority Leader Harry Reid, D-Nev.
Rep. Joe Barton, R-Texas, criticized the bill because it doesn't allow for oil exploration in Alaska or encourage new nuclear plants.
The provisions of the fuel economy bill are supported by nearly everyone in Congress. But the White House, Rep. John Dingell, D-Dearborn, Michigan's two senators and Detroit's Big Three automakers still want clarification on the responsibilities of the National Highway Traffic Safety Administration and the Environmental Protection Agency.
Dingell has said the country may face a “coming train wreck” if there isn't a requirement that the two agencies have consistent regulations.
The EPA and NHTSA are both working on proposed regulations to reduce vehicle tailpipe emissions that will have the impact of requiring higher automobile fuel economy; they are expected to be released by Dec 21.
The EPA must also decide whether to allow California to impose its own tougher emissions requirements under the Clean Air Act by year's end.
