Senate passes U.S. energy tax package

WASHINGTON - - The Senate approved $13 billion in energy tax breaks and financial incentives recently as part of a corporate tax package, the first victory in months in Republican efforts to overhaul U.S. energy policy.

The incentives were stripped out of a broad-ranging energy bill that has been stalled since last fall. With the presidential and congressional campaign season at hand, prospects were unclear for the overall bill, a White House priority.

Senators passed the corporate tax package on a 92-5 roll-call vote. Earlier in the day, they rejected, by a vote of 85-13, an attempt to delete the energy provisions. Sen. John McCain, an Arizona Republican, said the energy incentives were corporate giveaways that would add to the ballooning federal deficit. The bill's energy language would, in part, extend tax credits to companies that produce electricity from wind, solar and other renewable energy sources.

It would also encourage building new nuclear power plants and provide federal financial support for a proposed Alaska pipeline that would transport natural gas to the lower 48 States.

"When you add up all the provisions that are contained in the bipartisan energy tax package that is in this bill, you can see that it goes a substantial way towards a forward-looking national energy policy," said Sen. Jeff Bingaman, the top Democrat on the Senate Energy Committee.

NO ETHANOL PROVISION

The energy tax package does not include a provision broadly supported by farm-state lawmakers that would double the U.S. production of ethanol, a fuel additive made from corn. The boost in ethanol is part of a much broader bill that would carry out the first major overhaul of U.S. energy policy in a decade. The Republican leadership hopes to move the energy package later.

Senate Majority Leader Bill Frist has said he would oppose further breaking up the bill to win passage of such popular provisions as ethanol and electricity reliability standards.

If a final energy package is approved by the Senate, the measure would have to be reconciled with a much different energy bill already passed by the U.S. House of Representatives, before the legislation could be sent to President George W. Bush for his signature.

House Republican leaders have demanded that energy legislation include protection against product-defect lawsuits for makers of methyl tertiary butyl ether, or MTBE, a fuel additive and rival to ethanol, which is distilled from corn. Opposition to the MTBE protection language has bogged down the energy bill in the Senate.