Senate panel approves bill to cut U.S. gasoline use

By Tom Doggett

WASHINGTON (Reuters) - The U.S. Senate may vote this month on legislation that aims to drive down gasoline demand by boosting the fuel economy of cars and trucks and increasing the use of nonpetroleum fuels like ethanol.

The Senate Energy Committee on Wednesday sent to the full chamber a bill that targets gasoline demand -- the biggest chunk of U.S. petroleum use. It also seeks to lower greenhouse gas emissions spewed into the atmosphere.

The bill cleared the committee by a vote of 20 to 3.

Under the proposal, the Energy Department would have to come up with a plan to reduce gasoline consumption by 20 percent by 2017, 35 percent by 2025 and 45 percent by 2030.

To help cut fuel use, the legislation would also authorize the Energy Department to issue loan guarantees for fuel-efficient vehicle manufacturers and related parts suppliers.

And with an eye toward weaning America off foreign oil, the legislation would increase the amount of ethanol and other renewable fuels used in motor vehicles annually to 8.5 billion gallons in 2008, steadily boosting it to 36 billion gallons by 2022.

Green groups opposed the bill, arguing the proposed five-fold increase in biofuels production does not have key environmental protections and that such a large boost would take half of all U.S. corn production, at current rates, to make ethanol.

The bill also would authorize $315 million over three years to research how to capture and store carbon dioxide emissions linked to global warming that are spewed by power plants, oil refineries and other industrial facilities.

Sen. Jeff Bingaman of New Mexico, the chairman of the Senate energy panel and major co-sponsor of the bill, said he would try to modify the legislation on the Senate floor to include a requirement that 15 percent of U.S. electricity supplies be generated by solar, wind and other renewable energy sources by 2020.

Bingaman said Democratic leaders may have the Senate take up the bill before lawmakers adjourn for their Memorial Day holiday recess at the end of the month.

With gasoline prices near record levels, Bingaman said, "I think this is a useful bill for us to be reporting to the full Senate."

If the legislation is accepted by the Senate, it still must be approved by the House of Representatives and signed by President George W. Bush before it could become law.

During committee debate on the bill, the panel voted 12 to 11 against adding language to designate liquid coal as a biofuel.

"This proposal would have promoted fuel that is at best still dirtier than conventional gasoline," said Alice McKeown, Sierra Club's energy and clean air analyst. "At a time when we need to begin significantly reducing our global warming emissions, business as usual is no longer acceptable," she said.

However, supporters of liquid coal countered the fuel is needed to help reduce America's addiction to oil imports. "Our dependence on foreign oil is a threat to our national security," said Sen. Jim Bunning of Kentucky.