House passes pro-development energy bill

WASHINGTON – The House approved nearly $19 billion in tax breaks Friday for energy companies and power producers and set up a showdown with the Senate over energy policy, particularly oil drilling in an Alaska wildlife refuge.

The House-passed bill includes sweeping incentives for oil and gas development and a mix of tax and other financial breaks aimed at promoting the traditional fossil fuel industries.

And it revived the long-standing fight over whether to allow oil companies access to the millions of barrels of crude oil beneath the coastal plain of the Arctic National Wildlife Refuge in Alaska.

Three weeks ago, the Senate rejected drilling in ANWR, as the refuge is called, and Democratic senators – including several running for president – have vowed to block any energy bill that would expose the refuge to development. ANWR drilling has been a top White House energy goal.

The House and Senate also are taking different paths on energy tax incentives.

More than two-thirds of the $18.7 billion House proposal, covering 10 years, is aimed at helping natural gas, coal, and oil development. A slightly cheaper tax measure – about $16 billion – in the Senate focuses more on renewable energy, like development of wind power. Unlike the House, the Senate also gives a tax incentive to spur construction of an Alaska gas pipeline.

The House bill was approved 247-175 after lawmakers rejected Democratic amendments to encourage energy conservation and reduce production subsidies. A proposal to require automobiles and sport utility vehicles to use 5 percent less fuel by 2010 failed, as did an attempt to eliminate the ANWR drilling.

Maine Democratic Reps. Tom Allen and Mike Michaud both voted against the measure.

President Bush called the House-passed legislation “a major step forward in the effort to secure our nation’s energy future” and said he looked forward to prompt Senate action. The House-passed bill mirrors many of the energy priorities outlined two years ago by Vice President Dick Cheney’s energy task force.

Rep. Billy Tauzin, R-La., who guided the bill through two days of floor debate, rejected criticism that the bill focuses too heavily on helping fossil fuel producers and not enough on getting people to use less gasoline and electricity.

“Everyone has a different idea of what balance means,” said Tauzin, whose state is a major energy producer. He said it may be “a little more pro-production” than pro-conservation but will improve energy security and give “a good shot in the arm” to the economy.

First it must pass the Senate, which is expected to take up energy legislation next month. A Senate committee began working on an energy bill this week, approving some of the same measures in the House bill, including incentives for natural gas production and wider use of corn-based ethanol in gasoline.

But Tauzin acknowledged that the overall Senate bill likely will differ from the House-passed bill in some major areas, including Arctic refuge drilling and contentious issues involving the management of the nation’s electric power grids.