By Caroline Holland
At the end of 2007, the Energy Independence and Security Act (H.R. 6), co-sponsored by Rep. Nick Rahall, D-W.V., and Rep. Don Young, D-Alaska, moved between the House and the Senate as Congress hoped to arrive at some consensus before the holiday recess.
At the end of November, Democrats reached an energy deal to boost average new vehicle fuel economy to 35 mpg by 2020. With this agreement came the idea that American cars could get smaller, and potentially more expensive. This is because automakers would likely begin production of advanced fuel-saving technologies such as gas-electric hybrids, diesels and gasoline direct-injection systems that boost the efficiency of internal-combustion motors. The proposed bill would assist automakers with the cost of overhauling their product lines and factories to build more efficient vehicles.
Following this agreement, the U.S. House of Representatives voted 235-181 to pass energy legislation Dec. 6, 2007, leaving Senate Democrats hoping to capitalize on this momentum with their own passage of the legislation.
The bill that passed in the House included language that would:
- Increase vehicle fuel economy standards for the first time in 30 years by 40 percent.
- Require cars and light trucks sold in the United States to achieve a fleetwide average of at least 35 miles per gallon by 2020.
- Require billions of gallons of biofuels to be blended into gasoline.
- Mandate that utilities produce 15 percent of their electricity from renewable sources by 2020.
- Include a $21 billion package of tax incentives over 10 years for the development of renewable energy.
- Increase research on technology to capture and store carbon from coal used to produce electricity.
- Increase efficiency standards for light bulbs.
- Set a quota of 36 billion gallons a year for the use of ethanol and other biofuels.
However, a bid to schedule a Senate vote on the energy package including tougher fuel efficiency standards came up seven votes short, increasing the likelihood that the issue would not be resolved until 2008. In the Senate, Republicans were most concerned over the $21.5 billion tax package and the renewable-electricity mandate. Prior to the addition of these two components, there was general bipartisan agreement for the boost in fuel economy standards and other parts of the bill.
Although the bill contained incentives, it would roll back more than $13 billion in tax breaks given to oil and gas companies. This cited tax increase is one reason the White House threatened to veto the bill as it stood. Many believed it unfair to single out a particular industry for higher taxes. Still, a preliminary analysis by the Joint Committee on Taxation indicated that there was enough new revenue to offset the tax incentives. Additionally, the administration believed the renewable-electricity standard did not take into account the regional differences in the availability of alternative energy sources, such as wind and solar power. In particular, the Southeastern region expressed concern with meeting the mandate because it has less wind than other regions. The bill would also broaden the types of animal waste and water power that can be counted as renewable-electricity sources.
Based on these controversial aspects of the bill, Senate negotiators took the House bill and removed the billions of dollars in tax incentives that were paid for generally by repealing approximately $13 billion in incentives for oil and gas companies. Senate Democrats worked to keep the tax provisions in the measure though they fell one vote short of breaking the Republican filibuster. The Senate then passed the bill Dec. 13, 2007, sending it back to the House for consideration. By eliminating this bill component, Congress had significantly lessened the chance for veto by the White House.
For the automotive industry, the most important issue is the status of fuel economy standards. The auto industry has endorsed the compromise, which would require cars and light trucks sold in the United States to achieve a fleetwide average of 35 miles per gallon by 2020. The current standard is 27.5 miles per gallon for cars and 22.2 miles per gallon for light trucks.
ASA does see a missing component as the association has continuously encouraged the inclusion of expanded emissions-testing programs. Despite court rulings and the increasing interest of Congress in air quality, the U.S. Environmental Protection Agency has not been a strong advocate for emissions testing and maintenance. ASA members believe these are important programs that should be expanded, not diminished in number.
The Energy Independence and Security Act, after being scaled back by the Senate, was approved in the House Dec. 18, 2007. With the passage of H.R. 6, there will be an increase in fuel efficiency standards for U.S. cars and trucks for the first time since 1975, a boost in production of renewable motor fuels like ethanol, and energy use cuts for light bulbs and other appliances. The White House praised the compromises made by Congress and President George W. Bush signed the bill Dec. 19, 2007.
Following Bush's approval of the energy bill, U.S. EPA Administrator Stephen Johnson denied California's waiver request to determine its own state standard for greenhouse gas emissions. The EPA has determined that a federal standard of 35 miles per gallon will deliver significant reductions in greenhouse gas emissions from all 50 states, a more effective approach than a state-by-state reduction. According to Johnson, "the Bush Administration is moving forward with a clear national solution - not a confusing patchwork of state rules - to reduce American's climate footprint from vehicles. President Bush and Congress have set the bar high, and, when fully implemented, our federal fuel economy standard will achieve significant benefits by applying to all 50 states." The Energy Bill aims to achieve a national solution to reduce greenhouse gas emissions that offers environmental benefits, energy security and economic security for the United States.
| Caroline Holland is a legislative assistant in ASA's Washington, D.C., office.