Senate Passes Energy Bill, Cuts RPS and Oil Taxes

After failing to close debate on the Energy Bill, the Senate has passed the Bill by removing the renewable portfolio standard (RPS) and a keeping a $21 billion tax package that gives the oil industry billions in tax breaks. The newly trimmed bill will now head back to the House. It’s expected to be passed early next week before moving on to the White House for the presidential signature. While Bush had threatened to veto the bill, the exclusion of the RPS and new big oil taxes looks to provide a bland enough set of provisions that are palatable to everyone.

The biggest achievement of the bill is the increase in the corporate average fuel economy (CAFE) standard, which raises the average mileage of the auto fleet — including light trucks and SUVs — to 35 mpg by 2020. It also includes provisions to further Bush’s hopes for biofuels, requiring that some 36 billion gallons of renewable fuels be blended into gasoline by 2022.

The RPS would have required utilities to generate 15 percent of their energy from renewable resources; cutting it is a huge blow to utility-level clean tech. Many states, or consortia of states, have their own RPSs in place, but a federally mandated RPS would have pushed large-scale renewables beyond the coasts and into middle America.

While the potential of the first pie-in-sky iteration of the bill was huge for clean tech, with tax breaks pulled from big oil and given to emerging renewables, the current bill still contains some of the most significant environmental and energy legislation since the Clean Air Amendment of 1990.

The American Council for an Energy-Efficient Economy (ACEEE) released a statement saying that this energy bill will save consumers and business $400 billion dollars and reduce U.S. energy consumption by 7 percent and emissions by 9 percent by 2030 relative to their 2007 levels. ACEEE notes that the CAFE standards alone account for 60 percent of those energy savings.

The Senate is also trying to force a vote on the Farm Bill today, which will likely be the last piece of big energy legislation we see for quite a while. While this energy bill is a step in the right direction, it isn’t as big a step as it might have been and it’s unclear when the next step will come.

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