The Senate passed an energy bill that will raise fuel economy standards for motor vehicles for the first time in 32 years and require the nation’s growing alternative fuel industry to produce at least 9 billion gallons of renewable fuels in 2008.

Senate Republicans narrowly avoided a broader bill that would have ended at least $13 billion in tax incentives for oil companies and required utility companies to invest in alternative energy sources such as wind and solar power.

Senate Democrats failed by one vote on Thursday (Dec. 13) to invoke cloture on the broader bill, which proponents said would have little impact on expected oil company profits of $2 trillion in 2008. The vote on the motion to cut off debate was 59-40 with 60 votes required for passage.

The White House had said President Bush would veto any measure that contained “tax increases” on the oil industry or utility companies.

“I think it’s very unfortunate,” said Sen. Blanche Lincoln, D-Ark., “that the petroleum companies could not be asked to give up $13 billion in tax credits to invest in new sources of renewable energy when they are forecast to have $2 trillion in profits.”

Democratic leaders and members of the renewable fuels sector said they were still pleased with the Senate-passed bill, the Renewable Fuels, Consumer Protection and Energy Efficiency Act of 2007 (H.R. 6). The House was expected to approve and send it to the president’s desk.

Senate Republicans said they could “guarantee” President Bush would sign the more restrictive measure.

“Despite this setback, the bill will begin to reverse our addiction to oil,” said Senate Majority Leader Harry Reid of Nevada. “It’s a step to fight global warming and an issue that we will revisit in the next session of Congress.”

Corn growers had as much as anyone to gain from the bill, which would increase the renewable fuels target to 36 billion gallons by 2022 with a significant portion of that to come from corn-based ethanol and biodiesel.

“The energy bill is a dynamic package that supports the existing industry and looks to the future of energy,” said Ron Litterer, president of the National Corn Growers Association, one of the most aggressive supporters of the energy bill. “This legislation guarantees a robust future market for corn.

“We thank the leadership for recognizing the future of renewable fuels,” said Litterer. “This bill creates a solid foundation for grain-derived ethanol to continue to grow. Our nation’s corn growers are committed to producing a supply to meet America’s food and fuel needs.”

Proponents said the increased Corporate Average Fuel Economy (CAFE) standards could save 1.1 million barrels of oil a day or about half of what the country imports from the Persian Gulf region. It would save $22 billion at the pump and reduce greenhouse gas emissions by 200 million tons annually.

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