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 December 07, 2007
Energy Bill Seeks to Overhaul Fuel Economy, Alternative Energy Use

 Washinton, D.C, USA (by Greenbiz) -- A House-approved energy bill that aims to increase fuel-economy standards and the use of alternative fuels and renewable energy could see the Senate as soon as Saturday. While supporters say the bill will lead the way in reducing imports of oil and bring down energy costs, the White House has threatened to veto the bill in it its current form, citing concerns over increased taxes and energy prices.

The Energy Independence and Security Act of 2007 passed the House with a 235-181 vote Thursday. The wide-ranging bill would require vehicle fleets average 35 miles per gallon by 2020; the current average is 25 miles per gallon. It would be the first increase in fuel-economy standards since they were set in 1975.

The Union of Concerned Scientists, in its analysis of the bill, says the increase in fuel efficiency would save 1.1 million barrels of oil a day and save consumers $22 billion in 2020.

The bill would also enact a sevenfold increase in ethanol production, from 5 billion gallons a year today to 36 billion gallons a year in 2020, and require that a majority of it is not derived from corn.

Aside from fuels, the bill tackles energy use, requiring utilities to get 15 percent of their power from renewable resources, such as wind, solar and biomass. The bill allows a portion of that energy to be derived from efficiency measures. That change, the Union of Concerned Scientists says, would save between $13 billion and $18.1 billion on energy bills by 2020; by 2030, savings would grow to between $27.7 billion and almost $32 billion.

One major point of contention in the bill is a $21 billion tax package that includes a repeal of $13 billion in tax breaks for oil and gas companies. Some of the taxes would fund an extension of tax credits for wind, solar and biomass power, as well as credits for hybrid cars.

Other parts of the bill would phase out a loophole that allows automakers to take credit for vehicles that can, but do not always, run on alternative fuels; provide a program for training workers for green jobs; and make bonds available for community projects focused on reducing greenhouse gas emissions.

News reports suggest the bill could face a struggle in the Senate, where Democrats have a 51-49 majority, but Republicans could require them to have 60 votes to pass the measure. Even if it passes the Senate, it faces a veto by President George W. Bush.

The White House released a statement threatening that, in its current form, the bill would be struck down if it gets through the Senate. The statement says parts of the bill would cause increased taxes and energy prices for businesses and consumers. The provision calling for utilities to use renewable energy, it says, ignores individual states that are less suitable to harness wind and solar power. And although the administration supports the increase in fuel-economy standards, it says the role of the Environmental Protection Agency is left vague, and worries that the bill would lead to confusion and duplication of efforts in terms of regulation of both fuel economy and tailpipe emissions.