Utilities

US House OKs Energy Bill; Bush to Sign into Law

The House on Tuesday approved an energy bill to increase the fuel efficiency of U.S. cars and trucks for the first time since 1975, boost production of renewable motor fuels like ethanol and cut energy use in light bulbs and appliances.

The Senate approved the same bill last week and President Bush will sign the measure into law Wednesday, the White House said.

To win the backing of Bush and many Republican lawmakers, Democratic congressional leaders had to drop from the bill provisions that would have imposed about $13 billion in taxes on big oil and gas companies and required utilities to generate 15 percent of their electricity from renewable energy sources like wind and solar power.

The House easily cleared the bill in a 314-to-100 vote.

The centerpiece of the legislation will raise the fuel efficiency of cars and trucks by 40 percent to an average 35 miles per gallon by 2020.

Passenger cars now must get 27.5 miles a gallon and minivans, SUVs and other light trucks get 22.2 miles a gallon.

Patrons line up for fuel, Tuesday, May 30, 2006, in Cincinnati. Oil prices rose above $72 a barrel Tuesday ahead of an OPEC meeting in Venezuela and the start of the Atlantic hurricane season later this week. The Memorial Day holiday marked the beginning of the peak driving season in the U.S., a period when energy traders are extra skittish about any loss of oil production or refining capacity. (AP Photo/Al Behrman)
Patrons line up for fuel, Tuesday, May 30, 2006, in Cincinnati. Oil prices rose above $72 a barrel Tuesday ahead of an OPEC meeting in Venezuela and the start of the Atlantic hurricane season later this week. The Memorial Day holiday marked the beginning of the peak driving season in the U.S., a period when energy traders are extra skittish about any loss of oil production or refining capacity. (AP Photo/Al Behrman)

The higher fuel standard is expected to cut U.S. oil demand by 2 million barrels a day in 2030, shaving off 8 percent of the 25 million barrels a day in oil consumption the Energy Department has forecast at that time.

The bill will also increase production of renewable motor fuels like ethanol by five fold to 36 billion gallons a year by 2022.

Most U.S. ethanol is now made from corn, but the legislation requires billions of new gallons of ethanol in the next decade to come from non-food "cellulosic" sources like wood chips, switchgrass and other agricultural waste.