Senate rejects far-reaching energy bill
But Congress could still pass a slimmer version mandating more efficient cars and more biofuel use.
There's still hope the nation may get a nice green-energy law for Christmas â€“ not the big fat one environmentalists wanted, but a slimmed-down version that probably includes fuel economy and biofuel provisions.
That scenario emerged Friday, observers say, after the Senate failed to approve a more far-reaching House energy bill that promised to cut US dependence on imported oil and global warming emissions.
Congress still has the possibility to pass two measures with wide bipartisan support: the first major hike in vehicle fuel-economy standards since the 1970s and an enormous boost for US-made biofuels. But House provisions for a $21 billion repeal of tax cuts for the oil and gas industry and a mandate for electric utilities to begin using renewable fuels to generate some of their electricity now appear dead,
Environmentalists called the Senate's procedural vote a victory for supporters of "big coal and big oil" over the nation's needs.
"We are particularly disappointed that despite overwhelming public support for renewable energy and demand for cars that get better gas mileage, that the Senate has missed this opportunity to enact a Renewable Electricity Standard (RES) and strengthen fuel economy standards," says Anna Aurilio, a congressional analyst for Environment America, a Washington-based environmental group.
Oil industry officials said the impact of the House bill would have harmed energy supplies.
"Our country's energy focus should be on securing American energy supply, not discouraging future American energy production," said Barry Russell, president of the Independent Petroleum Association of America, in a statement. "Unfortunately the House energy bill sends the wrong â€“ and potentially harmful â€“ message."
Some close observers on Wall Street, however, foresee a new energy bill that will be less sweeping.
"We anticipate that the House will send a lean bill to the Senate next week," one that would only include provisions boosting biofuels and vehicle fuel-economy standards, wrote Kevin Book, senior vice president at FBR Capital Markets in Arlington, Va., in a letter to investors.
Wind, solar, and geothermal industry proponents were particularly anxious about the fate of some $10 billion to $16 billion of production and other tax credits, which could determine whether those industries go into recession. Under its pay-as-you-go mandate, the Democrat-controlled Congress had hoped to pay for these credits by effectively boosting the taxes on oil companies by repealing recent tax credits they received. Now, it will have to find the money elsewhere, analysts said.
"We call on Senate leaders to work together to ensure that overwhelmingly popular provisions to promote renewable electricity are not left out in the cold as this effort moves forward," Randall Swisher, executive director of the American Wind Energy Association, said in a statement Friday.