After it looked like competing special interest groups were going to scuttle the energy bill in the Senate a few days ago, the members of the "more deliberative" chamber reached a compromise late last night. The bill was passed by a vote of 65-27 after an earlier vote to cut of debate and stifle a threatened filibuster.

The bill that was passed will require the car makers to achieve an average of 35mpg for their light duty vehicle fleet including cars, trucks and SUVs by 2020. The previously proposed requirement for 4 percent annual increases between 2020 and 2030 was dropped from the bill that ultimately passed. Democrats proposed $32 billion in new incentives for renewable energy but Republicans killed that one because it would have been funded by $29 billion in new taxes on oil companies. A requirement to produce 36 billion gallons of ethanol annually by 2022, will surely be celebrated by ADM and Monsanto but unless they ensure that the fuel comes from cellulose, that one will just be a boondoggle.

A probably meaningless and possibly counter productive provision to ban price gouging did make it through, but this is probably one case where the market should be allowed to rule. Letting prices for oil and gas climb will just help to stimulate demand for more efficient vehicles which will inherently suppress price gouging. Finally the bill included efficiency standards for lighting and appliances and incentives for research into advanced and alternative powertrains and fuels.

Of course none of this means much until the House of Representatives takes up the bill and has their way with it and undoubtedly the industry will be making a full court press to gut it through their proxy, Rep. John Dingell (D-MI).

[Source: CNN]

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