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Energy bill passes without oil tax

The Senate passed a trimmed-back energy bill that would bring higher-gas mileage cars into showrooms in the coming decade and fill their tanks with ethanol.

The measure was approved on Thursday with strong bipartisan support 86-8 after Democrats abandoned efforts to impose billions of dollars in new taxes on the biggest oil companies, unable to overcome Republican delaying tactics against the new taxes by one vote.

The bill now goes to the House, where a vote is expected next week. The White House issued a statement saying US President George W. Bush will sign the legislation if it reaches his desk, as is expected. Bush had promised a veto if the oil industry taxes were not removed.

The measure calls for the first major increase by Congress in required automobile fuel efficiency in 32 years, something the auto companies have fought for two decades.

The car companies will have to achieve an industrywide average of 35mpg (15km per liter) for cars, small trucks and SUVs over the next 13 years, an increase of 10 mpg over what the entire fleet averages today.

And it would boost use of ethanol to 136 billion liters a year by 2022, a nearly sixfold increase, and impose an array of new requirements to promote efficiency in appliances, lighting and buildings.

This bill "will begin to reverse our addiction to oil. It's a step to fight global warming," said Majority Leader Harry Reid, a Democrat.

The increased efficiency by 2020 will save 1.1 million barrels of oil a day, equal to half the oil now imported from the Persian Gulf, save consumers US$22 billion at the pump, and reduce annual greenhouse gases emissions by 181 million tonnes, said Democratic Senator Daniel Inouye, whose committee crafted the measure.

"It demonstrates to the world that America is a leader in fighting global warming," he said.

Democratic Senator Carl Levin, a longtime protector of the auto industry that is so important to his state of Michigan, called the fuel economy measure "ambitious but achievable."

For consumers, the legislation will mean that over the next dozen years auto companies will likely build more diesel-powered SUVs and gas-electric hybrid cars as well as vehicles that can run on 85 percent ethanol. They will push engineers to develop new technologies to save fuel.

"Automakers can meet the new standards with today's technology," said David Friedman, research director at the Union of Concerned Scientists Clean Vehicle Program. "Cars and trucks will be the same size and perform the same way they do today."
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