Senate OKs major energy bill

WASHINGTON — The Senate overwhelmingly passed a major energy bill Tuesday that promises to boost U.S. supplies of oil, gas and solar power, but it's unclear whether the legislation will do much to reverse soaring gasoline prices.

Oil topped $60 a barrel this week for the first time because of China's escalating demand and the Iranian government's announcements to impose limits on foreign companies operations' in Iran. U.S. gasoline prices are up nearly 70 cents a gallon from two years ago and jumped more than 5 cents a gallon in the past week, according to the Energy Information Administration.

"Two years ago (oil) was $30 a barrel and now it's $60 a barrel," said Cathy Landry, senior oil correspondent with Platts, an energy information company. "Demand is up around the world. I think maybe two years ago, this energy bill would have done more than it would do today."

The bill, which passed the Senate 85-12, addresses a range of issues: providing more tax breaks for oil and gas production, mandating electricity reliability standards on utilities to diminish blackouts and offering incentives for more wind and solar power. It also includes more money for technology research on clean coal and fuel cells and tax benefits for hybrid and alternative-fuel vehicles.

Utah Sens. Orrin Hatch and Bob Bennett, both Republicans, voted for the bill.

Republicans have said the legislation also would create a huge number of mining, research and manufacturing jobs.

"This (bill) is about national security and economic security," said Sen. Trent Lott, R-Miss. "This is about safe, affordable, accessible, reliable energy. We need it. (But) it may not bring down prices immediately."

The measure now heads to a Senate-House conference committee where differences between the two versions must be worked out. The House passed its bill in April. The two sides have been unable to agree on a comprehensive policy since 2001.

Sticking points include provisions in the House bill to allow oil drilling in the Arctic National Wildlife Refuge, or ANWR, in Alaska and a liability waiver protecting manufacturers of the gasoline additive MTBE from water-pollution lawsuits — items that weren't contained in the Senate version.

Exacerbating high oil prices is the Chinese oil company CNOOC Ltd.'s $18.5 billion bid to buy Unocal Corp., a California-based oil and gas company. Two key House lawmakers wrote a letter to President Bush last week asking for a federal review of the bid, especially since the company is owned by the Chinese government.