The bill, which passed by a vote of 88-11 last year, includes a renewable fuels standard that would set a production goal of 5 billion gallons of renewable fuels, much of it corn-based ethanol, by 2012 and phase out the use of Methyl Tertiary Butyl Ether (MTBE) within four years.

While Democratic leaders applauded the Senate’s “return to reason,” Sen. Pete Domenici, R-N.M., chairman of the Senate Energy and Natural Resources Committee, said he would rewrite the bill in the conference committee.

“Please don’t assume we’ve been taken,” said Domenici. “We’re not stupid. The reason I’m smiling is because I’m going to be rewriting that bill.”

The newly passed, old Senate bill would:

  • Double the use of corn-based ethanol in gasoline by 2012 while banning the use of MTBE.
  • Provide $16 billion in tax breaks and incentives to promote energy production and conservation.
  • Encourage the building of a natural gas pipeline from Alaska.
  • Eliminate a Depression-era law that prohibits the mergers of utility holding companies.
The National Corn Growers Association hailed the Senate action, but said it would work to shorten the time frame for increasing renewable fuel production from nine years to seven when the bill reaches the conference committee.

“It was a brilliant political strategy of Minority Leader Tom Daschle, D-S.D., to suggest substituting last year’s bill,” said NCGA President Fred Yoder. “It was true statesmanship of Chairman Pete Domenici, R-N.M., to accept it.”

Domenici, chairman of the Senate energy committee, will chair the Senate-House conference committee, where the differences between the two chambers’ bills will be reconciled. The House passed its energy bill in April. Rep. Billy Tauzin, R-La., chairman of the House Energy Committee, will lead House members of the conference.

“Thursday’s passage is a historical step in the process of obtaining a comprehensive energy package that includes a 5-billion gallon RFS,” said Yoder. “While the NCGA is pleased with today’s outcome we will continue working toward getting a 5-billion gallon requirement by 2010, a goal for conference.”

Additionally, NCGA is optimistic the Highway Trust Fund (HTF) fix, and the Small Producer Tax Credit will be added in conference.

Following months of impasse on this year’s energy legislation, Sen. Tom Daschle, D-S.D., suggested the substitution of the 2002 Senate energy bill for this year’s language, to which Senate Majority Leader Bill Frist, R-Tenn., agreed.

Although Frist had said he wanted to pass the energy bill before the Senate left Washington for its August recess, he also tried to move several controversial judicial nominations to the Senate floor along with free trade agreements with for Chile and Singapore.

While the latter eventually passed, Senate Democrats threatened to launch a filibuster against the judicial nominations that could have kept the Senate in session far beyond the week allotted for the energy bill debate. The House recessed a week earlier.

As tempers flared and charges flew back and forth across the aisle, Daschle made his suggestion that the Senate simply adopted last year’s energy bill.

National Farmers Union President Dave Frederickson called the move a “great victory for farmers and rural America. This legislation is better for the environment and could increase market opportunities for farmers by tripling the domestic demand for renewable fuels.”

The comprehensive energy bill includes the original renewable fuels standard (RFS), introduced last year by Sens. Daschle and Richard Lugar, R-Ind. Frederickson said the NFU believes the RFS will triple U.S. usage of biofuels such as ethanol and biodiesel by 2012.

The provision would also eliminate the 2 percent reformulated gasoline oxygenate requirement and ban the additive methyl tertiary butyl ether (MTBE), a compound used to meet oxygenate requirements that has been found to contaminate drinking water.

“The RFS is a win-win situation for America,” said Frederickson. “Increasing fuel usage from farm products will not only help protect the nation’s environment and energy independence, but also will help provide a better price for our commodities and new economic opportunities in rural communities.”

Other provisions require the federal government to use ethanol and biodiesel in its transportation fleets when possible and to provide tax credits for renewable fuel production.

“The Senate bill contains the best RFS language for farmers and the environment,” Frederickson said. “Because of the Senate bill offers a better timetable and completely phases out MTBE, we encourage the energy conferees to preserve the Senate language in the final energy bill.”

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