New energy bill features $14 billion in tax breaks

WASHINGTON — House and Senate negotiators raced yesterday to complete work on $14.6 billion in tax breaks, the final element of a major energy bill Congress wants to send to President Bush this week.

Negotiations took place behind closed doors, with lawmakers divvying up tax breaks to encourage domestic production of oil and natural gas, development of cleaner-burning sources of electricity and conservation measures, among others.

The conference-committee members agreed to the nontax provisions of the bill late Monday night and early yesterday, as leaders took pains to jettison provisions that might prompt a Senate filibuster similar to one that killed an energy bill two years ago.

Negotiators omitted a provision that would have granted manufacturers of the gasoline additive MTBE protection from product-defect lawsuits, a measure that was unpopular in the Senate. They also dropped Senate provisions requiring that more electricity be produced from renewable sources and calling on the president to cut oil consumption by 1 million barrels a day by 2015.

After years of failed attempts to approve an energy bill — a top priority of the Bush administration — lawmakers said they expected final votes in the House and Senate this week.

The bill seeks to encourage more domestic energy production, improve the reliability of the electrical grid, spark development of nuclear-power plants and cleaner-burning coal facilities, and encourage more imports of liquefied natural gas. But the legislation includes other measures as diverse as extending daylight saving time, requiring an inventory of offshore U.S. oil and natural-gas reserves and government-funded research to help the oil industry drill in deep water.

"This is a darned good bill and this is going to help this country," said Rep. Joe Barton, R-Texas, chairman of the energy-bill conference committee. "The sooner we get it implemented, the better."

Some Democrats and environmentalists said the bill would shower subsidies on the energy industry, including many companies that have reaped record profits because of high oil prices.

"This is a huge giveaway for the oil and gas industry," said Rep. Ed Markey, D-Mass. "The bill just tips the American consumer and taxpayer upside down and shakes money out of their pockets."

Lawmakers said the leaders of the House Ways and Means Committee and Senate Finance Committee were working through differences between the House and Senate tax breaks. People familiar with the discussions said that negotiators were planning ways to generate $3 billion in revenues to partially offset the $14.6 million in tax breaks.