As Congress watches the price of oil edge toward $100 a barrel, it will consider a bill that could raise vehicle fuel-economy standards for the first time in 20 years and increase taxes on oil companies that have reaped billions in profits.
House and Senate lawmakers plan to work over the weekend drafting energy legislation that would also likely require oil companies to put billions of gallons of renewable fuel sources, such as ethanol, into gasoline.
The details of the bill are not yet final, but the tax increase provision, requested by House Speaker Nancy Pelosi, D-Calif., will undoubtedly face opposition from Republicans, particularly in the Senate, where Democrats hold a razor-thin margin.
The provision would eliminate billions of dollars in tax cuts and federal subsidies for oil producers and divert the money to alternative fuels, energy conservation and renewable energy projects such as solar and wind power.
Democratic leadership aides said the bill could also require electric companies to derive a percentage of power from renewable sources.
One Republican leadership aide warned that the bill “could collapse under its own weight” if it includes too many contentious provisions.
The GOP argues that cutting oil company profits will curtail their efforts to find oil and open refineries in the United States, making it more difficult to lessen dependence on foreign oil.
Democrats may move ahead with the bill despite Republican opposition, according to a top House Democratic leadership aide, who said as of late Friday the bill includes “essentially everything we wanted.”
Passing a major energy bill that addresses global warming and the rising prices at the gas pump has been at the top of Pelosi’s agenda.
The legislation could result in the first increase since 1985 in fuel economy standards, known as the Corporate Average Fuel Ecomony, or CAFE.
According to the National Highway Traffic Safety Administration, the passenger car standard has been set at 27.5 miles per gallon since 1985.
Democrats propose an increase to 35 mpg by 2020.
The nation’s automakers say that will cost them billions, but the move looks inevitable now that it has the support of House Energy and Commerce Committee Chairman John Dingell, D-Mich., a longtime ally of the nation’s automakers.
“It is my sincere hope that we pass an energy bill that includes a CAFE provision before the end of this year,” Dingell said this week.
