House passes energy bill

By Tom Doggett

WASHINGTON (Reuters) - The House of Representatives on Tuesday approved an energy bill to increase the fuel efficiency of cars and trucks for the first time since 1975, boost production of ethanol and cut energy use in light bulbs and appliances.

The legislation will do little in the short term to help consumers deal with high gasoline and heating-oil prices, but the future policy changes aim to reduce U.S. oil imports and save consumers up to $1,000 a year at the pump.

The Senate approved the same bill last week and President George W. Bush will sign the measure into law on Wednesday, the White House said.

But to win the backing of Bush and many Republican lawmakers, Democratic congressional leaders dropped provisions that would have imposed about $13 billion in taxes on big oil and gas companies and required utilities to generate 15 percent of their electricity from renewable energy sources such as wind and solar power.

The House easily cleared the bill in a 314-to-100 vote.

House Democratic Majority Leader Steny Hoyer said the bill was "a historic turning point in America's energy policy," because it moves the United States away from its addiction to traditional oil, most of which must be imported, to home-grown renewable energy supplies and promotes energy conservation.

"With this legislation, we will move toward real energy independence that results in a stronger economy," he said.

However, Rep. Joe Barton, the top Republican on the House Energy and Commerce Committee, called the bill "a recipe for a recession," because it will raise energy prices and the costs builders will incur to meet the energy conservation mandates.

The centerpiece of the legislation will boost the fuel efficiency of cars and trucks by 40 percent to an average 35 miles per gallon by 2020.

Passenger cars now must attain 27.5 miles a gallon and minivans, SUVs and other light trucks 22.2 miles a gallon.

The higher fuel standard is expected to cut U.S. oil demand by 2 million barrels a day in 2030, shaving off 8 percent of the 25 million barrels a day in oil consumption the Energy Department has forecast at that time.

The bill will also raise yearly output of renewable motor fuels such as ethanol five-fold to 36 billion gallons by 2022.

Most U.S. ethanol is now made from corn but the legislation requires billions of new gallons of ethanol in the next decade to come from non-food "cellulosic" sources like wood chips, switchgrass and other agricultural waste.

Democrats said the renewable fuels would cut U.S. reliance on OPEC oil producers. "Rather than the Middle East we will produce the fuels in the Midwest," said Rep. Ed Markey, referring to more ethanol supplies.

Republicans criticized the legislation for focusing on reducing energy use rather than on increasing domestic supplies of oil and natural gas. "This is a lousy bill ... it doesn't produce a barrel of oil," said fellow Republican Ralph Hall.