Senate passes energy bill favoring renewables, better auto fuel economy

~ Resistance to new auto fuel economy standards threatened passage until the final hours.

WASHINGTON -- Democrats celebrated a step toward reducing U.S. dependence on oil as the Senate approved a bill calling for more ethanol and the first boost in gas mileage in decades.

Now the House plans to follow suit, perhaps as early as next week.

The Senate late Thursday voted 65-27 to pass the first energy bill since Democrats took control of Congress in January. But it was far from a complete victory.

Resistance to the new auto fuel economy standards threatened passage until the final hours. Democratic leaders held off a vote until shortly before midnight as senators were called back to the Capitol to assure the votes needed to overcome a threatened filibuster by opponents of the tougher fuel regulations.

The bill finally passed even as Republican senators grumbled that it did virtually nothing to increase production of traditional domestic fuels such as oil and natural gas.

Democrats saw it differently.

"This bill starts America on a path toward reducing our reliance on oil," Senate Majority Leader Harry Reid, D-Nev., proclaimed.

The legislation would require ethanol production for motor fuels to grow to at least 36 billion gallons a year by 2022, a sevenfold increase over the amount of ethanol processed last year.

And it calls for boosting auto fuel economy to a fleet average of 35 miles per gallon by 2020, a 40 percent increase over current requirements for cars, sport utility vehicles, vans and pickup trucks.

The legislation also calls for:

• Price gouging provisions that make it unlawful to charge an "unconscionably excessive" price for oil products, including gasoline. It also gives the federal government new authority to investigate oil industry market manipulation.
• New appliance and lighting efficiency standards and a requirement that the federal government accelerate use of more efficient lighting in public buildings.
• Grants, loan guarantees and other assistance to promote research into fuel-efficient vehicles, including hybrids, advanced diesel and battery technologies.

But Democrats had wanted more for renewables than they got.

Earlier in the day Reid could not hide his displeasure as Republicans blocked one of the Democrats' top priorities, a $32 billion tax package aimed at boosting renewable fuels, energy efficiency and clean energy programs. The Republicans didn't like the $29 billion in additional taxes on oil companies that the plan required to pay for the new alternative energy subsidies.

"Big Oil seems to do pretty well here on Capitol Hill," Reid told reporters, making no effort to hide his sarcasm.

Democrats also failed to get a provision that would have required electric utilities to produce at least 15 percent of their electricity from wind, biomass or other renewables after Republicans refused to allow the measure to come up for a vote.

Intense negotiations among a small group of senators produced a compromise on the auto fuel economy matter that emerged as the crown jewel of the Senate-passed bill.

It requires automakers to make a 40 percent increase in the fuel efficiency of their vehicles by 2020 and for the first time puts SUVs, vans and small trucks under the same regulation as passenger cars.

Under the bill each vehicle group must achieve a 10 mpg increase in fuel economy by 2020 with an overall average requirement for a manufacturer's fleet increasing to 35 mpg. Currently cars must meet a fleet average of 27.5 mpg; light trucks -- including SUVs and vans -- must achieve an average of 22.2 mpg.

"We've been fighting to reach this day for over 20 years," said Sen. John Kerry, D-Mass., who was involved in the negotiations that led to the compromise. "For the first time in a generation we've overcome powerful opposition to make our cars more fuel efficient."

Congress last passed a federal auto fuel economy standard in 1975 and the current requirement for cars of 27.5 mpg has not changed since 1989.

The House has yet to act on its energy legislation. But House Speaker Nancy Pelosi, D-Calif., has said reductions in auto gasoline use are needed and Rep. Edward Markey, D-Mass., said he plans to work "to ensure that the House matches the Senate's action."

"It's clear the political movement to increase our nation's fuel economy ... has shifted out of neutral into drive," said Markey, responding to the Senate action Thursday.

Sen. Carl Levin, D-Mich., who opposed the Senate provision and had fought to instead pass a more auto industry-friendly fuel economy measure, said one reason for his effort's failure was growing public concern about global warming.

"The public wants action, rightfully so, on global warming," Levin said in an interview. And he added, the auto industry is "a juicy target."