Copyright 2002 The Houston Chronicle Publishing Company  
The Houston Chronicle
April 24, 2002, Wednesday 3 STAR EDITION
SECTION: BUSINESS; Pg. 1

LENGTH: 688 words

HEADLINE: Breakthrough in Senate to bring energy bill vote

SOURCE: Staff

BYLINE: KAREN MASTERSON, Houston Chronicle Washington Bureau

DATELINE: WASHINGTON

BODY:
WASHINGTON - Senate leaders Tuesday agreed to finish up a broad energy bill by week's end, adding $ 14 billion in tax breaks to boost everything from oil production to wind power and more-efficient appliances.

After a six-week partisan struggle, a breakthrough was achieved when Democrats caved in to the demands of Sen. Phil Gramm. The Texas Republican had held the energy bill's tax provisions hostage by threatening to tack on a permanent repeal of the estate tax.

But Senate Majority Leader Tom Daschle of South Dakota chose to avoid adding another hotly contested issue to what has already been a complex and, at times, highly contentious debate over the nation's energy strategy. Instead, he defused the problem by promising to debate the estate tax no later than June 28.

The Senate voted 86-13 to limit debate on the energy bill to just 30 more hours, with a vote on passage expected either Thursday night or Friday. Both Gramm and Texas Sen. Kay Bailey Hutchison, a Republican, voted to end debate.

"It's time we bring this to a conclusion," Senate Republican leader Trent Lott of Mississippi said.

And Daschle said: "I am hopeful that we can complete our work and then move on to conference."

For the first time since the energy bill was introduced earlier this year, the Senate appears to have the votes to pass it. If that happens, the bill will be taken up by a House-Senate conference, where significant disagreements will need to be worked out.

In August, the House passed a very different energy plan that parallels President Bush's energy strategy. Unlike the Senate bill, which focuses on energy conservation, the House measure promotes oil, gas, coal and nuclear energy production.

And House GOP leaders, with help from labor unions, included a provision allowing oil exploration in Alaska's Arctic National Wildlife Refuge, a cornerstone of the president's energy plan. The Senate, by contrast, killed attempts by Republicans to add a similar provision to its version of the bill.

Whether lawmakers will be able to work out their differences remains unclear.

With Gramm's estate tax repeal set aside, senators unanimously agreed to add a broad package of tax incentives, split almost evenly between energy conservation and production. Through the tax code, the bipartisan plan promotes the development and use of energy from wind, solar and geothermal sources, as well as from plant and animal waste.

The bill would provide tax breaks of up to $ 2,000 a year for energy efficient homes and give up to $ 75 tax credit for buying energy-efficient water heaters, $ 250 for electric and geothermal heat pumps and air conditioners, and $ 500 for natural gas heat pumps. And business owners would be allowed to write off money spent to make buildings more energy-efficient, up to $ 2.25 per square foot.

On the production side, the bill includes investment tax credits for clean coal technology and for oil and gas production, including tax credits of up to $ 3 per barrel for oil produced from shale or tar sands. The Senate tax provisions are less than half the $ 33 billion included in the House bill, which would largely benefit oil, coal, natural gas and nuclear energy companies.

This week, the Senate could take up a variety of pending issues, including attempts to strip provisions that would require more clean-burning ethanol in gasoline.

Senators may also revisit the debate over passenger vehicle fuel efficiency. Last month, senators from big auto manufacturing states killed provisions that would have required automakers to produce more fuel-efficient cars, SUVs, minivans and light trucks.

Sen. Arlen Specter, R-Penn., and Thomas Carper, D-Del., may revisit the issue by offering an amendment that would require passenger vehicles to reduce oil consumption by 1 million barrels a day, or about 10 percent, by 2015.

Alaska's Republicans on Tuesday agreed to lay to rest, at least for now, debate over oil drilling in the Alaska refuge.

They had vowed to continue pushing the issue last week, after senators voted 54-46 in favor of preserving the 19-million-acre refuge.



LOAD-DATE: April 25, 2002