Copyright 2002 The New York Times Company  
The New York Times
April 26, 2002, Friday, Late Edition - Final
SECTION: Section A; Page 18; Column 1; National Desk 

LENGTH: 1065 words

HEADLINE: Senate Passes An Energy Bill Called Flawed By Both Sides

BYLINE:  By DAVID E. ROSENBAUM 

DATELINE: WASHINGTON, April 25

BODY:
The Senate passed a stripped-down energy bill today that would produce little new fuel for Americans and do little to conserve existing resources.

The measure has a variety of new rules and small tax breaks that its sponsors say could encourage the development of energy sources like wind power, solar power and ethanol and lead to more efficient use of fuel in some areas.

Many senators who voted for the measure, which has tied up the Senate for nearly two months, said they were doing so largely because it was better than no bill at all. It was approved by a vote of 88 to 11 and now goes to a conference committee to reconcile the many differences with a bill backed by the Bush administration, which the House passed last year.

Senator Jeff Bingaman of New Mexico, the Democratic floor manager, said it was possible the House and Senate would be unable to agree on a final bill. "There's no requirement we have an energy bill this year," he said.

Mr. Bingaman said he was proud of some aspects of the legislation, but he acknowledged, "If you compare it to someone's ideal bill, it doesn't measure up."

A leading Republican spokesman on energy policy, Senator Larry E. Craig of Idaho, said of the bill, "It's not perfect, but of course you have the opportunity to go to conference with the House."

Many environmental organizations urged senators to vote against the measure. Debbie Sease, legislative director of the Sierra Club, said, "You cannot hope to get a good energy policy by blending the flawed Senate energy bill with the even worse House energy bill."

When the Senate began debating energy legislation in early March, senators from both parties said the world situation made it more imperative than ever that the United States reduce its reliance on imported oil, especially from the Middle East.

But the Senate quickly became paralyzed by partisan and regional differences, and by the refusal of the many commercial and environmental interests with a stake in the matter to consider compromise.

Most Republicans and energy interests favored more energy production, particularly oil and gas exploration in the Arctic National Wildlife Refuge. But this step, advocated by President Bush and approved by the House, was unacceptable to most Democrats and to environmental groups.

Those Democrats and the environmentalists sought more conservation, particularly stiff new automotive fuel-efficiency standards. But this proposal was unacceptable to most Republicans and to the automobile manufacturers and unions.

With both sides intransigent, the two ambitious proposals, drilling in Alaska and mandating more fuel-efficient vehicles, were rejected by lopsided margins.

Today, the Senate considered a proposal much less strict than the tough mileage standards voted down last month. The new proposal would have required the Transportation Department to issue rules that would have reduced the growth in consumption of oil by passenger vehicles by one million barrels a day by 2015. This, too, was defeated, 57 to 42.

The House also rejected tougher mileage standards, so that proposal has no chance of emerging from the House-Senate conference committee. As for exploration in the Arctic refuge, the consensus in the Senate is that it would be pointless for the conferees to approve it because such an agreement would be rejected out of hand on the Senate floor.

Like many other legislative goals, more energy independence became unattainable this year because the House and Senate are so closely divided, because neither party is in the mood to compromise in an election year and because under the rules, controversy cannot be resolved in the Senate unless one side or the other has 60 votes.

Other bills before Congress that fit this pattern include proposals to make last year's tax cuts permanent, to give patients more rights in dealing with their health insurance companies, to raise the minimum wage and to provide Medicare coverage of prescription drug costs.

With the most important elements of energy policy set aside, the bill that was approved today contained only modest measures to encourage the conservation and development of alternative forms of energy, none of which are likely to affect people's day-to-day lives.

Under one measure, utility companies would be required to increase gradually the percentage of electricity generated by wind and solar power and other renewable forms of energy. By 2020, the companies are expected to produce 10 percent of their energy this way.

But in a concession to large electricity providers, the bill would repeal the Public Utility Holding Company Act, a Depression-era law that restricts the ownership and operations of utilities.

The bill would also ban the use of the gasoline additive methyl tertiary butyl ether, or M.T.B.E., which has been found to contaminate ground water. To replace this additive, the bill would require that the amount of ethanol in gasoline be tripled over the next 10 years. Ethanol is usually made from corn, and this provision was eagerly sought by senators from corn-growing states. In addition, the bill would protect gasoline companies from liability if ethanol, like M.T.B.E., is found to damage the environment.

The legislation would give businesses and consumers tax breaks worth about $14 billion over the next decade to encourage the development of new forms of energy and the conservation of existing energy resources. The tax incentives amount to less than half what the House bill would provide.

The chief sponsor of the Senate tax breaks, Max Baucus, Democrat of Montana, conceded that they were too small to make a great deal of difference, but he said they would "help on the margins."

The bill would also set new efficiency standards for home appliances, but strong requirements for air conditioners were rejected today.

Like the House bill, the Senate legislation would encourage the construction of a natural gas pipeline from the northern slope of Alaska to the lower 48 states and specify that the pipeline route be through Alaska and not mostly through Canada.

The senators from New York and California voted against the bill -- largely, they said, because they feared that the ethanol requirement would lead to higher gasoline prices in their states without significantly improving the environment.
 

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GRAPHIC: Photo: Anticipating passage of an energy bill in the Senate, Energy Secretary Spencer Abraham joined Trent Lott, the Senate minority leader, at a news conference in Washington yesterday. The bill passed shortly afterward. (Paul Hosefros/The New York Times)
 
Chart: "COMPARE AND CONTRAST -- Energy Bills Go to Conference"
A comparison of the main provisions of the energy bill the Senate passed yesterday and the one the House passed last August.
 
FUEL EFFICIENCY
 
HOUSE -- Requires the Transportation Department to develop regulations to reduce by five billion gallons the amount of gasoline used by pickup trucks, sport utility vehicles and vans sold in the United States between 2004 and 2010.
 
SENATE -- Orders the department to study fuel-efficiency requirements and propose new rules by 2004. Pickup trucks would be exempt from the new standards.
 
TAX BREAKS
 
HOUSE -- $33 billion of tax incentives over 10 years, almost all to encourage production of new forms of energy.
 
SENATE -- $14 billion of tax incentives over 10 years, some to encourage production and some to encourage conservation.
 
ANWR EXPLORATION
 
HOUSE -- Permits oil and gas exploration in the Arctic National Wildlife Refuge. Development would be limited to a surface area of 2,000 acres.
 
SENATE -- No provision.
 
RENEWABLE FUELS
 
HOUSE -- No provision.
 
SENATE -- Requires utility companies to gradually increase the percentage of electricity they derive from wind and solar power and other renewable sources until the proportion reaches 10 percent in 2020.
 
GASOLINE ADDITIVES
 
HOUSE -- Orders study of the dangers of M.T.B.E., a cleanburning gasoline additive found to contaminate ground water.
 
SENATE -- Bans M.T.B.E., and triples over the next 10 years the amount of ethanol that must be added to gasoline.      

LOAD-DATE: April 26, 2002