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Energy Bill: One Step Forward, Two Steps Sideways

Pumping gasLate last night, the Senate passed its version of the Energy Bill on a vote of 65-27, just shy of a possible veto-proof majority. The Bill features a “compromise” that would raise the national auto fuel mileage standard to 35 MPG by 2020. The compromise also requires development of a plan to have 50 percent of autos be able to run on gasoline alternatives by 2015.

At the same time, the Senate apparently failed to include the renewables portfolio standard I discussed yesterday. And in an ominous victory for the oil industry, the Senate just missed getting enough votes — 57-36 — to end debate on the massive tax package that would have shifted about $30 billion in tax breaks from oil producers to renewable energy sources. Big oil still reigns in Washington.

The New York Times has the basic story on the fuel standards, and the AP story this morning and another from Reuters fills in other important details.

The “compromise” auto mileage provision retains the uniform requirement that all cars, light trucks and SUVs meet the 35 MPG goal by 2020, but it drops the proposal that the industry continue to improve mileage performance by 4 percent per year in the years after 2020. This concession was apparently enough to keep the energy bill moving over the continued objections of the auto industry and Michigan’s Senators, who had sought a lower standard for light trucks and SUVs, a later compliance date, and a waiver if the standards proved too difficult.

The compromise is strongly opposed by the auto industry and its loyal supporters in Congress. The Reuters version quotes Senator Levin as saying, “We will be continuing to oppose it . . .This is not over by any stretch.” And an early last night AP story indicates the compromise is getting mixed reviews:

Some industry officials bristled at the description of the final Senate initiative as a compromise but major auto companies had no immediate comment after passage of the initiative, which would also reduce carbon emissions.

One senior congressional aide said the auto industry and its allies in the Senate, unhappy with the amendment after failing to garner support for a more palatable alternative, had mounted a last-minute campaign to delay or possibly kill the overall energy bill.

Auto companies have said a strict requirement could financially devastate struggling Detroit companies, including General Motors Corp., Ford Motor Co. and DaimlerChrysler AG’s Chrysler Group.

Joan Claybrook, president of Consumer Group Public Citizen and a former head of the agency that administers CAFE rules, called the measure a “step backward” because it would give regulators and industry too much discretion. The Consumer Federation of America praised the bill, saying it will cut oil imports by 15 percent and reduce tailpipe emissions by 1 billion tons.

The “discretion” Claybook fears probably occurs in defining the steps the industry must meet. According to this morning’s AP story,

It requires automakers to make a 40 percent increase in the fuel efficiency of their vehicles by 2020 and for the first time puts SUVs, vans and small trucks under the same regulation as passenger cars.

Under the bill each vehicle group must achieve a 10 mpg increase in fuel economy by 2020 with an overall average requirement for a manufacturer’s fleet increasing to 35 mpg. Currently cars must meet a fleet average of 27.5 mpg; light trucks — including SUVs and vans — must achieve an average of 22.2 mpg.

Claybrook’s comment also suggests the auto industry’s request for a waiver if the standards prove too difficult may be included in the compromise, but none of the stories I’ve seen makes that clear. However, it wouldn’t be unusual for Congress to give the agency in charge of setting the exact standards and enforcing the compliance schedules some discretion in dealing with hardships or changed circumstances — that’s almost always the way government regulations are handled, and it’s up to conscientious regulators (or court orders) to faithfully carry out Congress’ intent. The dishonesty of the Bush Administration and its habit of appointing industry cronies who oppose the agency mandates make this traditional approach suspect, so this issue bears watching.

The vote on ending debate on the oil versus renewables tax package was a severe disappointment to Democrats. But given how close the vote was (h/t to cunctator for the link) and who didn’t vote, there’s a possibility the tax package might still have a chance if included in the House bill. According to the Times story:

In the Senate, ten Republicans and the Senate’s two independents voted in favor of shutting off debate and moving to a vote on the tax package itself. Only one Democrat sided with Republicans who voted “no,” Senator Mary Landrieu of Louisiana, an oil- and gas-producing state.

Senator Reid also voted “no” in the end, but his vote was a procedural move allowing him to bring the measure up for reconsideration later. Six senators did not vote: Barbara Boxer of California and Tim Johnson of South Dakota, both Democrats, and Sam Brownback of Kansas, Tom Coburn of Oklahoma, John McCain of Arizona and Jeff Sessions of Alabama, Republicans.

It’s not clear where Boxer was, but she’s a strong supported of the tax package; Johnson is still recovering; Coburn’s an oil industry diehard; Sessions is usually wrong on everything; McCain and Brownback were presumably campaigning. So we’re a couple of votes short on the tax package for renewable energy.

Bob Geiger has more on the Senators who worked out the compromise.

Photo by AP/John Amis; pumping gas in Georgia.

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John has been writing for Firedoglake since 2006 or so, on whatever interests him. He has a law degree, worked as legal counsel and energy policy adviser for a state energy agency for 20 years and then as a consultant on electricity systems and markets. He's now retired, living in Massachusetts.

You can follow John on twitter: @JohnChandley