Senate Adopts an Energy Bill Raising Mileage for Cars

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the New York Times

Senate Adopts an Energy Bill Raising Mileage for Cars

by
Edmund L. Andrews

WASHINGTON, June 21 - The Senate passed a broad energy bill late Thursday that would, among other things, require the first big increase in fuel mileage requirements for passenger cars in more than two decades.

The vote, 65 to 27, was a major defeat for car manufacturers, which had fought for a much smaller increase in fuel economy standards and is expected to keep fighting as the House takes up the issue.

But Senate Democrats also fell short of their own goals. In a victory for the oil industry, Republican lawmakers successfully blocked a crucial component of the Democratic plan that would have raised taxes on oil companies by about $32 billion and used the money on tax breaks for wind power, solar power, ethanol and other renewable fuels.

Republicans also blocked a provision of the legislation that would have required electric utilities to greatly increase the share of power they get from renewable sources of energy.

As a result, Senate Democrats had to settle for a bill that calls for a vast expansion of renewable fuels over the next decade - to 36 billion gallons a year of alternatives to gasoline - but does little to actually promote those fuels through tax breaks or other subsidies.

The combination of breakthroughs and setbacks highlighted the blocking power of the entrenched industry groups, from oil companies and electric utilities to car manufacturers, that had blanketed Congress in recent days to defend their interests.

The clashes and impasses also provided a harbinger of potentially bigger obstacles when Democrats try to pass legislation this fall to reduce emissions of greenhouse gases tied to global warming.

Democrats conceded that they had had won only a partial victory, but said they would have additional opportunities to push their agenda when the House takes up similar legislation, with the goal of passing it before the Fourth of July recess.

"This bill starts America on a path toward reducing our reliance on oil by increasing the nation's use of renewable fuels," said Senator Harry Reid of Nevada, the Senate majority leader.

Environmental groups, though disappointed by the setbacks on renewable fuels, nevertheless hailed the vote on higher mileage requirements as a long-sought victory that could eventually reduce American gasoline consumption by more than 1 million gallons of gasoline a day.

If the Senate bill becomes law, car manufacturers would have to increase the average mileage of new cars and light trucks to 35 miles per gallon by 2020, compared with roughly 25 miles per gallon today.

Car companies had lobbied ferociously for a much weaker requirement of 30 miles per gallon for light trucks and sport-utility vehicles. To muster enough votes to prevent a filibuster, about a dozen lawmakers from both parties hammered out a deal that included the higher standard but omitted explicit requirements for further increases in efficiency after 2020.

"We are thrilled," said Kevin Curtis, a lobbyist for the Pew Campaign for Fuel Efficiency. "This is the first time in decades that the Senate has passed a significant increase in fuel economy standards."

The car industry's main trade association, the Alliance of Automobile Manufacturers, appeared stunned by the sudden compromise and refused to comment publicly on the bill Thursday night.

With a vote of 57 to 38, the Senate came three votes short of the number needed to cut off a filibuster on the tax package. Republican opponents argued that tax increases on oil companies would reduce exploration for oil and lead to higher prices on gasoline.

Republicans also blocked another central goal, known as the Renewable Portfolio Standard, that would have required electric utilities to produce at least 15 percent of their power from renewable fuels by the year 2020.

"Republicans continue to pander to the big oil and energy companies," Mr. Reid complained after conceding defeat on those issues. "Republicans repeatedly demonstrate that they do not care about the priorities of the American people, throwing up roadblocks at every turn instead of working with us to reduce skyrocketing gas prices."

Earlier in the day, President Bush had urged Congress to pass an energy bill, though he said the Senate measure fell far short of his goals.

Oil executives and their lobbyists had fanned out across Congress in recent days and run frequent ads in newspapers, all delivering a carefully coordinated message: higher taxes on oil production would lead to higher gasoline prices.

The oil industry has also fielded former lawmakers, including Bennett Johnston, former Democratic senator from Louisiana, and Don Nickles, former Republican senator from Oklahoma. And it circulated a study by the Heritage Foundation, a conservative think tank, on how higher taxes could lead to higher gasoline prices.

Senator Reid quickly accused Republicans of doing the bidding of oil companies at a time when they are earning record profits.

Republican opponents of the tax package said it was unfair to oil companies, would reduce investment in exploration and would ultimately increase American dependence on foreign oil.

"Instead of reducing gasoline prices, this is going to add to add to the cost of gasoline," said Senator Jon Kyl, Republican of Arizona.

Republicans were themselves divided, with ten voting alongside Democrats to limit debate and prevent a filibuster. Only one Democrat, Senator Mary L. Landrieu of Louisiana, a major oil-producing state, voted to allow the filibuster.

The bill was particularly alluring to lawmakers from farm states, which already benefit from government supports for corn-based ethanol and stood to gain even more from additional incentives for wind power and cellulosic ethanol made from plants like switch grass.

Senator Charles E. Grassley of Iowa, the ranking Republican on the Senate Finance Committee, pleaded with members of his party to drop their opposition.

"We're taxing the oil industry to get a renewable energy industry started," Mr. Grassley said on the Senate floor. "I hope you'll understand that God only made so much fossil fuel and that there's got to be a follow-on if we're going to have growth in our economy."

The Union of Concerned Scientists, a nonprofit group that has pushed for higher standards, estimated that the Senate requirements would eventually reduce American oil consumption by 1.2 million barrels a day and reduce emissions of heat-trapping greenhouse gases by an amount equivalent to removing 30 million of today's cars from the road.

"Today, the Senate roundly rejected the automobile industry's scare tactics," said Michelle Robinson, director of the Union of Concerned Scientists' clean vehicle program.

Sheryl Gay Stolberg contributed reporting.

Copyright 2007 The New York Times Company

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