Congress is poised to pass a long-sought energy bill that may finally help convert Utah's vast oil shale and tar sands into billions of barrels of oil.

"We've sought this for years, and now it's finally happening," Sen. Orrin Hatch, R-Utah, said Tuesday. "We have more recoverable oil (in the oil shale and tar sands) in Utah and Colorado than there is in all the Middle East . . . more than a trillion barrels."

House and Senate negotiators — including Hatch — on Tuesday tucked tax breaks and other production incentives into a sweeping, compromise energy bill. Both houses are expected to pass it by the end of the week.

Bogged down in debate over how to balance conservation and greater production, Congress has sought but failed to pass a comprehensive energy bill for four years. As gasoline prices escalated this year, President Bush challenged Congress to finally pass it before the August recess.

"It contains provisions that should make Utah a central figure in the nation's energy strategy for years to come," Hatch said.

At the top of that list, he said, are the tax and other incentives he pushed to help development of oil shale and tar sands.

"It has always been amazing to me that Canada recognized the potential of the large tar sand deposits in Alberta and developed a government policy to promote their development," while America did not do the same for Utah deposits, Hatch said.

As a result, he said, Utah imports a fourth of its oil from Canada — mostly from the tar sand operations in Alberta — while Utah's vast reserves sit mostly untouched.

Hatch said incentives in the bill "make production economical. This should get it going. With the price of oil at $60 a barrel, it should certainly get going."

Other provisions that Hatch said should help Utah's economy include a proposal he pushed to allow accelerated depreciation for new oil refineries, or refineries that expand.

"We have lost over 200 refineries (to closure) since 1970 and have not built a new one since then," Hatch said. A lack of refinery capacity has led to more oil importation, a trend the new incentives could help reverse, he said.

The bill also includes a Hatch proposal to simplify the application process for developing natural gas in tar sand areas on public lands, and another Hatch proposal to provide incentives for using geothermal energy to produce electricity. "Utah has some of the largest geothermal prospects in the nation," Hatch said.

The bill also contains provisions that Hatch pushed for years to give tax breaks to people who buy alternative-fuel and hybrid-electric vehicles. Tax breaks would be given for buying fuel for them and gas stations would have incentives to buy and install alternative fueling equipment.

Other provisions included in the compromise version of the bill would extend daylight savings time by a month on each end of the time change to save energy and new efficiency standards would be adopted for commercial appliances from air conditioners to refrigerators.

The bill also includes subsidies and tax breaks for wind and solar industries, along with the geothermal industry. Loan guarantees and other subsidies for clean energy technologies and new nuclear reactors are also included.

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Contributing: Associated Press

E-mail: lee@desnews.com