Energy bill stalled; Senate halts passage

SALEM, Ohio – Although it seemed like an overhaul of the nation’s energy policy was imminent, the U.S. Senate blocked a final vote Friday, leaving the bill’s future uncertain.

After a landslide vote in the House early last week, the proposal is awaiting a decision by the Senate.

Senators were torn in a 57-40 vote Friday between cutting off the debate and moving to a final vote, and continuing discussions.

“This will not be the last vote on this bill,” promised Majority Leader Bill Frist, R-Tenn., according to the Associated Press. “We’re going to keep voting until we pass it and get it to the president.”

Some supporters are pushing for another vote before the Thanksgiving break, however, as of presstime, a decision had not been made.

Ethanol. With the Senate’s approval and President Bush’s signature, the energy bill would double the use of ethanol in gasoline to 5 billion gallons by 2012.

The boost in ethanol, an additive helping gas burn cleaner, would be a major advantage for farmers since it is mainly made from corn.

Supporters contend a national standard for renewable fuels would increase demand for ethanol, lead to more ethanol plants and create jobs.

The increased use of ethanol and biodiesel, which is part of the renewable fuel standard, would reportedly create approximately $5.3 billion in rural capital investments and 214,000 new jobs.

“It is also estimated that the (renewable fuel standard) will add $4.5 billion annually to net farm income and decrease our trade deficit by $34 billion,” said American Farm Bureau President Bob Stallman.

The increase in the value of corn, soybeans and other feedstocks would reportedly lower the need for farm payments by an estimated $5.9 billion by 2012, according to Farm Bureau.

The tax credit for ethanol would reportedly continue under the proposed bill. The bill would also create a tax credit for biodiesel.

Taking the heat. While parts of the proposed bill may look good to farmers, it doesn’t sit well with everyone.

Taking the most heat is a liability waiver for manufacturers of methyl tertiary-butyl ether (MTBE), an additive used to meet oxygenate requirement that has contaminated drinking water.

“We should be protecting our environment, not those who are contributing to its decline,” said National Farmers Union President Dave Frederickson.

Tax breaks. In addition to snags over the questionable additive are concerns about tax incentives for oil and gas industries, reportedly totaling $23 billion in tax breaks for energy development.

Under the proposed bill, tax incentives would be offered for energy-efficient homes, commercial, building, appliances and combined heat and power systems.

The National Association of Home Builders is particularly pleased with this version of the energy bill.

The group said the measure would provide a $1,000 tax credit to builders for the construction of a new home at least 30 percent more energy efficient than a home built under the 2000 International Energy Conservation Code.

The tax credit reportedly jumps to $2,000 when built 50 percent above the conservation code.

Coal industry. Although Rep. Ted Strickland, D-Ohio, supports the ethanol provisions, his dissatisfaction with the tax incentives swayed him to vote against the bill last week.

“Christmas has come early for oil and gas companies this year,” the congressman said

Incentives to increase the use of western coal is at the expense of eastern and Appalachian coal, Strickland said.

The bill reportedly sets aside less than 11 percent of the tax incentives for clean coal technologies.

In addition, a provision offering western coal from federal lands at a fraction of the cost of Appalachian coal may seriously injure the coal mining industry in Ohio, Strickland said.

Foreign dependence. Opponents also argue the proposal fails to reduce growing foreign dependence on oil.

Although the Alliance to Save Energy praised the energy-efficiency tax incentives, it called the bill “supply oriented” and said it “fails to harness the latest energy efficiency technologies to address major energy problems.”

“What will it take for Congress to realize that energy efficiency is the quickest, cleanest, cheapest way to extend our nation’s energy supplies and protect our economic and national security?” asked Mark Hopkins, acting co-president.

Wind, biomass. Supporters also praised the encouragement of renewable energy sources through tax incentives, however National Farmers Union said it’s disappointed “the final bill does not mandate a 10 percent increase in electricity generated from wind and biomass.”