29-06-05 With the price of oil hovering near record levels and gasoline prices showing little sign of easing, the Senate passed a massive energy bill. But analysts said it would do little to bring down prices in the short run, and maybe not even the long run.
The White House and lawmakers of both parties praised the legislation, but a number of critics said the measure only marginally improves US energy policy. And a few said the legislation could make it worse.

In a rare show of bipartisanship, the Senate approved the measure with an 85:12 vote. Its more than 1,000 pages include $ 18 bn in energy tax breaks, a requirement that Americans use more corn-based ethanol fuel and provisions to produce clean-coal technology and revive nuclear energy.
Although both houses have passed energy bills, Congress has major hurdles to clear before approving final legislation. In particular, tough negotiating will be required to settle differences between the two measures.

One major sticking point involves theamount of ethanol use that would be required across the nation. The Senate bill would double the amount of ethanol consumption from 4 bn gallons a year to 8 bn by 2012, while the House bill would raise it to 5 bn gallons.
Another controversial issue is a House provision to protect major oil companies and gasoline refiners from lawsuits over MTBE, or methyl tertiary butyl ether, a gasoline additive that has contaminated drinking water in hundreds of communities.

In addition, the Senate bill does not contain a provision to open the Arctic National Wildlife Refuge in Alaska to oil and gas drilling, while the House measure calls for developing the refuge -- a move strongly opposed by environmentalists.
The Senate approved drilling in the refuge separately as part of its budget, which cannot be filibustered. The issue could be resolved through the budget process and not in the energy legislation.

President Bush praised the Senate's action, saying it would help economic growth by addressing the causesof high energy prices. He urged the House and Senate to resolve their differences quickly "and get a good bill to my desk before the August recess."
House Speaker Dennis Hastert (R-Ill.) said that with the Senate vote, "Americans moved closer to a real solution to the high gas prices consumers are feeling at the pump. America is long overdue for an energy bill, and the Senate should be applauded for its action."

With the price of crude oil at about $ 60 a barrel, and Republicans in control of Congress and the White House, the GOP faces pressure to come up with an energy policy. That has been one of Bush's top priorities since taking office.
But several energy analysts across the political spectrum said rhetoric tying the bill to lower gas prices represents false hope. Saad Rahim, an energy analyst at PFC Energy, a Washington consulting firm, said the bill fails to do what is most required -- reduce the demand for gasoline in the United States. No action was taken to require US automobile companies to produce a larger number of energy-efficient cars, he noted.

Ben Lieberman, an energy analyst at the conservative Heritage Foundation, said that by requiring the nation to use more ethanol, the Senate bill promotes higher, not lower, gasoline prices because the fuel would be costlier to produce.
Jerry Taylor, an energy expert at the Cato Institute, a libertarian think tank, said Congress probably would be better off passing no energy bill at all if this measure is the best it can do. "It will waste money to no good effect," Taylor said.

Philip Clapp, president of the National Environmental Trust, an environmental organization, said: "Congress and the president are now going to try to convince the public that they have done something about gasoline prices just because they passed a bill that has something to do with energy. But there is nothing in this bill that will help struggling consumers who have shelled out an average of $ 100 more at the pump in the first six months of the year."
Philip Verleger, a Colorado energy consultant, also criticized the big subsidies in the bill and doubted the legislation would do much to relieve America's heavy energy use and its supply situation. Most analysts interviewed said $ 60-a-barrel oil would do more in the long run to increase supplies and reduce demand than Congress' legislation.

But William Pizer, an energy expert at the think tank Resources for the Future, said that even if the bill does little to reduce the price of gasoline in the short run, the measure contains some useful provisions, such as providing tax credits for consumers who buy hybrid cars and strengthening regulation of the electricity industry.
Pizer praised a "renewable energy standard," which would require electricity suppliers to obtain 20 % of their supplies from renewable sources such as wind, solar or geothermal. While the Senate rejected curbs on carbon emissions, it passed a toothless resolution saying Congress should enact mandatory provisions to reduce emissions believed to cause global warming.

The price of oil has surged dramatically this year as world demand, led by China, has increased even as supplies have tightened. Many analysts said the price of oil could go even higher, but Taylor said that the longer the price remains high, the sooner supplies would rise.
The Senate legislation provides generous subsidies for the nuclear and coal industries. Rahim, the Washington consultant, said the subsidies for developing clean-coal technology could pay off because America has so much coal, but he and others acknowledged it would take a long time to make the technology economically viable.

With subsidies, tax credits and loan guarantees, the bill seeks to spur development of an advanced nuclear power plant, but several analysts said they doubt reviving nuclear power is economically feasible any time soon.