Yesterday the Senate approved the House’s energy bill, after both the oil tax credit repeal and the renewable electricity portfolio requirements were removed. The revised bill is expected to be approved by the House and signed by the president into law. President Bush had previously promised to veto any bill that repealed the tax credits granted to the oil industry in 2005.
 
The main provision of this version of the bill is its adjustment to automobile CAFÉ standards, requiring that cars meet an industry average of 35 mpg by 2020. This alone makes the bill a milestone, as it’s the first time the CAFÉ standards have been raised since 1975. However, existing technology is more than sufficient to meet this standard, so it should not cause any significant hardship on the automobile manufacturing industry, and it will not spur any major developments in new technology.
 
The same cannot be said of the biofuels mandate also included in the bill, which requires that ethanol production be ramped up to 36 billion gallons a year by 2020—a sevenfold increase on current production. It also requires that at least 21 billion gallons of that ethanol be from feedstock other than corn. This will compel significant strides in ethanol technology, since cellulosic ethanol is still in the early stages of development and is believed to be at least five or six years away from commercially viability. It will also call for creativity on the part of industry experts to avoid problems of soil depletion and clear cutting in order to grow enough biomass to meet the ethanol mandates. The bill does not address the problem of rising food prices, especially corn, which has already been affected by the increase in ethanol demand over the past few years.
 
Although this bill will help move the U.S. energy system away from fossil fuels and toward more renewable sources, it does little to encourage development of the most promising technologies. The original House bill included tax credits for electricity from renewable sources like wind and solar, but the Senate dropped this provision in response to lobbying from utility companies, especially Southern Company. Although clean sources like wind and solar currently provide very little of our electricity needs, they offer the fewest challenges in pollution and sustainability long-term. Hopefully, future energy legislation will recognize this and include more provisions to encourage the most promising energy technologies available.