Our high hopes for the Senate's energy bill have been partially achieved. The petroleum reduction targets are in; many of what we've been reporting on for over a year as the provisions of the DRIVE Act are included. And the carmakers found long-time allies deserting them to support an increase in the CAFE (Corporate Average Fuel Economy) Standard.

However, though the consumer tax incentives for PHEVs we described last week passed the Finance Committee (along with limited credits for conversions), the entire Finance Amendment never made it into the Energy Bill. Rrenewable energy programs were to be financed by lifting oil and gas tax incentives, which the Chamber of Commerce and the petroleum industry were able to block.

At least the non-tax PHEV programs, including demonstration projects, are included. In the midst of al this, Senate Majoritiy Leader Harry Reid held a press conference focsing largely on PHEVs and EVs, and the Prius and Escape PHEVs from A123Systems were mentioned in quite a few reports on the event.

Next we see what happens in the House, which will consider its own package including tax incentives, but it is likely to be governed by the same "Pay-As-You-Go" (now called "Pay-Go") policy.

Below we reprint Set America Free's report (thanks Anne Korin for that and the update above), followed by NYTimes Columnist Thomas Friedman's evaluation of the Energy Bill and a few pointers to more info on the Energy Bill.

Victories on the road to energy security http://www.setamericafree.org/­safupdate062207.htm June 22, 2007

CAPTION: Senator Reid press conference Sen. Reid, Sen. Kerry, Gal Luft, and representatives of Tesla, A123, and the Electric Drive Transportation Assoc.

After weeks of deliberations (and at times squabbles), the Senate passed an energy bill which includes many provisions of the bipartisan DRIVE Act based on the Set America Free Coalition's Blueprint for Energy Security. By a vote of 63-30, the Senate approved the DRIVE Act's oil savings amendment, which directs the Executive Branch to identify within 9 months, and to announce within 18 months, federal requirements in order to achieve a 2.5 million barrel-per-day reduction in U.S. oil consumption by 2016, a 7 million barrel-per-day reduction by 2026, and a 10 million barrel-per-day reduction by 2031; and direct the Office of Management and Budget (OMB) to publish an analysis identifying the oil savings projected to be achieved by each measure to be announced, and demonstrating that the listed measures will achieve the overall specified oil-savings. The amendment also includes specific requirements for the Executive Branch to evaluate, review, and update the action plan. Click here to see how your Senators voted on this provision. "The passage of this amendment is a key victory in the battle to break America's dependence on foreign oil and strengthen our national security," said Senator Joe Lieberman, who along with Senators Bayh, Brownback, Coleman, and Salazar was a key architect of the legislation.

The Senate's energy bill, titled The CLEAN Energy Act of 2007, includes most of the DRIVE Act's provisions to advance the commercialization of plug in hybrids and the use of electricity in the transportation sector, critical for reducing oil dependence since today hardly any U.S. electricity is generated from oil. An amendment that added these provisions to the bill was passed by unanimous consent. On June 20 Set America Free's co-chair Gal Luft joined Senate Majority Leader Harry Reid and Senators John Kerry and Evan Bayh as well as three leaders in new energy technologies for a press conference to discuss how energy-efficiency can sharpen America's competitive edge.

"We have the technology to become a more energy-efficient nation, and we should embrace it. Said Sen. Reid in front of two plug in hybrids brought to the Capitol by A123 Systems, a car battery developer, "Becoming a leader in new energy technologies will sharpen America's competitive edge, strengthen our security and protect our environment." Sen. Kerry concurred: "Plug-in car technology offers a blueprint for clean, efficient, affordable driving if the auto industry is willing to listen. I don't know of anyone who isn't interested in getting 150 miles to the gallon with their car, and that could soon be a reality." Luft said: "Plug-in hybrid electric vehicles allow Americans to use made-in-America electricity rather than Middle East oil. Since we no longer produce electricity from petroleum, there is no better way to strengthen America's security and remove the yoke of our oil dependence than the electrification of our transportation system."

The CLEAN Energy Act also includes requirements to produce 36 billion gallons a year of a variety of biofuels by 2022 (a sevenfold increase over production in 2006,) an increase in automobile fuel economy standards and a requirement to establish and implement an action plan to ensure that 50 percent of the vehicles for sale in model year 2015 are alternative fuel vehicles.

The legislation's path to passage is far from complete. The House of Representatives is considering its own version, which so far also includes many provisions of the DRIVE Act. Congressmen Dingell, the Chair of the House Energy and Commerce Committee, issued a statement earlier this week saying that for now his committee will focus on issues around which consensus can be achieved, avoiding some of the more controversial items that the Senate took on. How the two chambers will reconcile the non-trivial differences between their approaches is an open question. We will keep you posted as this develops.

PSA on board Our friends at the Partnership for Secure America (PSA) joined the chorus of security groups calling for energy action. In a luncheon on Capitol Hill Senator Gary Hart and Set America Free's Robert McFarlane announced the Partnership's energy statement. The statement's signatories included, among others, three former Senators, a former Congressman, a former Secretary of State, two former Ambassadors, and two former National Security Advisors. To read the statement click here.

The Capitol Energy Crisis
Op-Ed Columnist THOMAS L. FRIEDMAN
The New York Times June 24, 2007
http://select.nytimes.com/­2007/­06/­24/­opinion/­24friedman.html

When you watch a baby being born, after a difficult pregnancy, it is so painful and bloody for the mother it is always hard to tell the truth and say, "Gosh, that baby is really ugly." But that's how I feel about the energy legislation passed (and not passed) by the Senate last week.

The whole Senate energy effort only reinforced my feelings that we're in a green bubble - a festival of hot air by the news media, corporate America and presidential candidates about green this and green that, but, when it comes to actually doing something hard to bring about a green revolution at scale - and if you don't have scale on this you have nothing - we wimp out. Climate change is not a hoax. The hoax is that we are really doing something about it.

No question, it's great news that the Democrat-led Senate finally stood up to the automakers, and to the Michigan senators, and said, "No more - no more assisted suicide of the U.S. auto industry by the U.S. Congress. We're passing the first bill since 1975 that mandates an increase in fuel economy." If the Senate bill, which now has to go through the House, becomes law, automakers will have to boost the average mileage of new cars and light trucks to 35 miles per gallon by 2020, compared with about 25 miles per gallon today.

But before you celebrate, pay attention to some fine print in the Senate bill. If the Transportation Department determines that the fuel economy goal for any given year is not "cost-effective" - that is, too expensive for the car companies to meet - it can ease the standard. That loophole has to be tightened by the House, which takes up this legislation next week.

But even this new mileage standard is not exactly world leading. The European Union is today where we want to be in 2020, around 35 miles per gallon, and it is committed to going well over 40 m.p.g. by 2012. Ditto Japan.

There are other things that make the Senate energy effort ugly. Senate Republicans killed a proposed national renewable electricity mandate that would have required utilities to produce 15 percent of their power from wind, solar, biomass and other clean-energy sources by 2020. Twenty-three states already have such mandates. No matter. Making it national was too much for the Republicans.

And the Senate, thanks again to the Republicans, also squashed a Democratic proposal to boost taxes on oil and gas companies that would have raised some $32 billion for alternative fuel projects.

Despite all the new research on climate change, the Senate didn't even touch the idea of either a cap-and-trade system or a carbon tax to limit carbon dioxide emissions. An effort by Senator Amy Klobuchar of Minnesota to legislate a national reporting ("carbon counter") system to simply measure all sources of greenhouse gas emissions, which would enable a cap-and-trade system to work if we ever passed one, also got killed by Republicans. We can't cap and trade something we can't measure.

Here is the truth: the core of our energy crisis is in Washington. We have all the technology we need right now to make huge inroads in becoming more energy efficient and energy independent, with drastically lower emissions. We have all the capital we need as well. But because of the unique nature of the energy and climate-change issues - which require incentives and regulations to build alternatives to dirty, but cheap, fossil fuels - you need public policy to connect the energy and capital the right way. That is what has been missing.

"We have to work to ensure that the House will at least toughen the provisions that the Senate passed," said Dan Becker, director of the Sierra Club's Global Warming Program.

The public wants it. But energy policy gets shaped in the halls of Congress - where wily lobbyists, legacy industries and politicians greedy for campaign contributions regularly sell out the country's interests for their own. Only when the public really rises up - as it has finally done against the auto companies - do we even get moderate change. Don't look to the Bush team to lead the revolution.

"We are the only major country in the world where no one even knows the name of the environment minister - the head of our Environmental Protection Agency," said Representative Edward Markey, a Massachusetts Democrat. "Whoever it is - and most people don't even know if it is a he or a she - has been in a six-year witness protection program. Until the Democrats took over, no Bush E.P.A. administrator appeared before the House committee in charge of energy and climate change."

Folks, we're home alone. So call your House member - especially the Republicans. If you don't, some lobbyist will.

To see more on the Energy Bill, at Joe Romm's Climate Progress blog: http://climateprogress.org/­2007/­06/­23/­the-media-comments-on-the-energy-bill/­ http://climateprogress.org/­2007/­06/­22/­energy-bill-grade-b/­ and Green Car Congress: http://www.greencarcongress.com/­2007/­06/­senate-passes-e.html