Senate bill sets 35 mpg standard, bars profiteering

WASHINGTON — The Senate passed an energy bill late Thursday that includes an increase in automobile fuel economy, new laws against energy price-gouging and a requirement for huge increases in the production of ethanol.

In a compromise fashioned after two days of closed-door meetings, an agreement was reached to increase average fuel economy by 40 percent, to 35 mpg for cars, SUVs and pickup trucks by 2020.

But the fuel-economy issue threatened to topple the legislation up to the last minute. Majority Leader Harry Reid held off the vote until late into the evening so several senators could be called back to Capitol Hill to provide the 60-vote margin needed to overcome a threatened filibuster from pro-auto industry senators.

Shortly before midnight, senators voted 62-32 to cut off debate, and followed by passing the bill 65-27. The measure now awaits action by the House, which may take it up next week.

The boost in vehicle fuel efficiency would be the first since the current 22.7 mpg for cars was set in 1989 and the first time Congress has imposed a new auto efficiency mandate in 32 years.

Supporters said the new requirement would save 2.5 million barrels of oil a day by 2025, when large numbers of the more fuel-efficient cars will be on the road.

Republicans complained that the bill is tilted too much toward renewable energy and fuel efficiency and does nothing to boost domestic oil or natural-gas production.

But its supporters said it reflects a shift to new energy priorities, away from promoting fossil fuels.

"This bill starts America on a path toward reducing our reliance on oil," Reid said.

But Democrats didn't get all that they wanted.

Republicans blocked Democratic efforts to pass a $32 billion package of tax incentives for renewable energy and clean fuels, objecting to increasing taxes on oil companies by $29 billion over 10 years to pay for it.

Democrats also were unable to include in the bill a requirement for electric utilities to produce at least 15 percent of their electricity from renewable fuels such as wind and biomass. Senators from the South objected, saying the region couldn't meet such a standard, and Republicans refused to let the measure come up for a vote.

But the legislation provides a bonanza to farmers and the ethanol industry. It requires ethanol production to grow to at least 36 billion gallons a year by 2022, a sevenfold increase of the amount of ethanol processed last year.

The legislation also calls for price-gouging provisions that make it unlawful to charge an "unconscionably excessive" price for oil products including gasoline and give the federal government new authority to investigate oil-industry market manipulation.