By James Kuhnhenn,Knight Ridder Newspapers

WASHINGTON – The Senate passed sweeping energy legislation Tuesday that offers financial sweeteners for the coal and oil industries, gives incentives to manufacturers of cleaner renewable fuels and aims to reduce American oil consumption by 1 million barrels per day over the next 10 years.

In an impressive display of bipartisan unity, senators voted 85-12 in favor of the bill, setting the stage for difficult talks to reconcile differences with a version that the House of Representatives passed in April. House and Senate negotiators will confront some of the same obstacles that killed an energy bill in 2003.

The White House has expressed a preference for the House bill, which could influence the outcome of the House-Senate conference. But even though President Bush made energy policy a priority from the moment he took office, congressional disputes have managed to thwart him.

The chairman of the Senate Energy Committee, Pete Domenici, R-N.M., hailed the legislation as “an energy bill worthy of our times.” Domenici said, “This is a bill that could indeed be called the clean energy act of 2005.”

However, the bill doesn’t include provisions that environmentalists had sought to require reductions in carbon dioxide emissions as a means of addressing global warming.

It also doesn’t include higher gas-mileage standards for U.S.-made cars.

Though Bush and some lawmakers have cited today’s high gasoline prices as motivation to pass the energy bill, nothing in the legislation is expected to have any short-term effect on the cost of gas at the pump.

But the Senate bill sets an ambitious goal of weaning the country from its dependence on oil and contains far more provisions than the House version to encourage the production of alternative fuels. The Senate measure contains $16 billion in tax breaks over 10 years for energy producers and consumers, double what the House bill provides.

The Senate bill also would double the mandated use of corn-based ethanol, a clean-burning gasoline additive that’s popular in farm states. In addition to bipartisan support for the measure from Midwestern senators, it won backing from potential presidential candidates, who may have their sights on the Iowa presidential caucuses in 2008.

Over objections from utility lobbyists, the Senate would require that by 2020, 10 percent of the U.S. electricity supply be produced by renewable energy sources such as wind, solar or waste products. The White House and the Republican-led House have rejected such a mandate.

The most contentious issue in House-Senate negotiations next month will be a House provision that protects manufacturers of the gasoline additive MTBE from environmental lawsuits. The additive, which had been used as an alternative to ethanol in coastal states, has been blamed for contaminating water supplies. The lawsuit protections, which a sizable bipartisan coalition in the Senate opposes, largely were responsible for the energy bill’s failure in 2003.

Unlike the House bill, the Senate’s contains no language about drilling for oil and gas in Alaska’s Arctic National Wildlife Refuge. Environmentalists oppose the drilling provision, which the Senate has blocked in the past. This year, the drilling measure may have to be decided separately in upcoming tax legislation.

The bill contains loan guarantees for clean-coal technologies and new nuclear reactors. It provides tax breaks to consumers who buy energy-efficient appliances or fuel-saving vehicles or build homes that are energy efficient.

It also calls for the federal government to establish an inventory of oil and gas resources on the Outer Continental Shelf, a provision that some senators feared would set the stage for more offshore exploration. That prompted opposition from Florida’s senators, Republican Mel Martinez and Democrat Bill Nelson.

“This inventory sends a message to states and oil companies that the federal moratorium on offshore drilling is meaningless,” Martinez said. “This inventory provision tells the people of states like Florida that it’s only a matter of time.”

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Senators defeated a number of amendments, including one that would have increased gasoline-efficiency requirements for American-made automobiles. In one of the most significant votes, senators killed an amendment that would have required utilities to cut back emissions of carbon dioxide, a heat-trapping pollutant that many scientists attribute to global warming.

The Senate did, however, adopt a nonbinding resolution that acknowledged the dangers of global warming and conceded that solutions would require mandatory restrictions. That was a clear break with the Bush administration, which says the scientific evidence of global warming isn’t conclusive.

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(c) 2005, Knight Ridder/Tribune Information Services.

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PHOTOS (from KRT Photo Service, 202-383-6099): SENATE-ENERGY

AP-NY-06-28-05 1703EDT

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