US House passes Energy Bill 235-181; White House promises veto; 36 billion gallon ethanol mandate included

In Washington, the US House passed its energy bill 235-181, largely on party lines. The White House called the bill “misguided” and said that President Bush would veto it.

The bill raises Corporate Averaged Fuel Economy (CAFE) standards 40 percent to 35 miles per gallon by 2020, and a mandate to increase ethanol blending to 36 billion gallons by 2022, and a Renewable Power Standard, a mandate for utilities to derive 15 percent of their power from renewable sources by 2020.

The bill also contains $21.5 billion in consumer tax incentives to install solar panels, wind turbines, and buy hybrid gas-electric cars. The tax incentives are offset by the cancellation of $13 billion in oil company tax subsidies, and it is this provision which the White House especially objects to.

“A slimmed-down bill, including the bipartisan RFS increase but excluding the controversial RPS, stands a good chance of enactment sometime in early 2008,” said Pavel Molchanov, analyst for Raymond James, in a note to investors.  “The wide-ranging bill, rich with pro-renewable energy provisions, is facing significant resistance in the Senate and from the Bush administration over several of the provisions. Aside from facing a declared veto threat from the White House, the bill will have a tough time garnering the required 60 votes in the Senate to avoid a filibuster,” he added.

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