The real objective of dubya subsidizing ethanol with $50B

[boutons_]

May 24, 2007

http://www.nytimes.com/ref/us/200705...Y_GRAPHIC.html

Oil Industry Says Biofuel Push May Hurt at Pump

By JAD MOUAWAD

Gas prices are ing again — to an average of $3.22 a gallon, and close to $4 a gallon in many areas.

And some oil executives are now warning that the current shortages of fuel could become a long-term problem, leading to stubbornly higher prices at the pump.

They point to a surprising culprit: uncertainty created by the government’s push to increase the supply of biofuels like ethanol in coming years.

In his State of the Union address in January, President Bush called for a sharp increase in the use of biofuels, along with some improvement in automobile fuel efficiency to reduce America’s use of gasoline by 20 percent within 10 years. Congress is considering legislation calling for a nearly fivefold increase in the use of ethanol.

That has forced many oil companies to reconsider or scale back their plans for constructing new refinery capacity.

In hearings before Congress last year, oil executives outlined plans to increase fuel production by expanding existing refineries. Those plans would add capacity of 1.6 million to 1.8 million barrels a day over the next five years, for an increase of 10 percent, according to the National Petrochemical and Refiners Association.

But those plans have since been scaled back to more than one million barrels a day, according to the Energy Information Administration, an arm of the federal government.

“If the national policy of the country is to push for dramatic increases in the biofuels industry, this is a disincentive for those making investment decisions on expanding capacity in oil products and refining,” said John D. Hofmeister, the president of the S Oil Company. “Industrywide, this will have an impact.”

The concerns were echoed in a recent report by Barclays Capital, which said the uncertainty about the ethanol growth “will do little to accelerate desperately needed investment in complex United States refining units.”

“Indeed, it is likely to deter and further delay investment, if not rule out many refinery investments completely.”

Even so, the current cost of gas — which in real terms is approaching the old peak of $1.42 a gallon in March 1981, or $3.31 adjusted for inflation — has renewed su ions that the oil industry is looking for ways to keep profits high by delaying much-needed investments. Senator Charles E. Schumer, Democrat of New York, began hearings yesterday on the topic “Is Market Concentration in the U.S. Petroleum Industry Harming Consumers?”

And the House voted yesterday by a narrow margin to penalize any oil companies, traders or retailers found to be charging “unconscionably excessive” prices for gasoline and other fuels. President Bush will probably veto the measure because the White House has said such legislation would amount to price controls.

Experts point to many short-term reasons the United States is running low on gasoline, causing prices to rise: many oil companies are doing maintenance work on refineries; new federal rules make fuels cleaner but costlier; and a string of delays, fires and accidents in the industry have reduced supplies just when drivers are starting to hit the road for summer vacations. Many analysts predict prices will keep rising, then soften later in the summer as demand trails off.

Energy executives dismissed any suggestions that they were intentionally keeping gasoline off the market.

The oil companies say their views on the longer-term prospects for fuel reflect simple economics. Because of the enormous investments required to expand refineries, they say they have no other choice but to re-examine their plans in light of the calls for more ethanol fuel, regardless of how realistic they may be.

“The policy environment has shifted dramatically,” said Mike Wirth, head of global refining business for Chevron. “There is a great risk that has been introduced to projects, predicated upon increasing supplies, that the demand may not be there.”

( this worthless asshole knows the demand will be there, and he knows ethanaol is bull . What we have here is extortion: try switching away from paying oilcos, and we will save our investment $$$ so we charge you a LOT more when supply fails to meet demand )

Refineries are a choke point in the nation’s supply of fuel. Because they have not invested enough in refineries to increase gasoline supplies, oil companies have been unable to meet the country’s growing demand in recent years. That has forced them to rely on imports, which are more expensive than fuel refined domestically.

The fragility of the refining system became apparent after Hurricanes Katrina and Rita in 2005. At the time, President Bush offered to reopen some military bases as sites for constructing refineries and Congress passed legislation to encourage refiners.

But oil companies rejected the idea of constructing new refineries in the United States, saying it would be impractical and too expensive.

As a result of the push for biofuels, and encouraged by federal subsidies and grants, dozens of ethanol distilleries are being planned. These investments should double the annual production of ethanol from corn to 15 billion gallons by 2012 from about 6 billion gallons today.

But given farmland constraints and the need to use corn for food, that is as much ethanol as can possibly be produced from corn, according to the ethanol industry’s own calculations. Ethanol producers recognize that it is not clear how an additional 20 billion gallons of ethanol — President Bush has called for 35 billion gallons of biofuels by 2017 — would be produced from cellulose or biomass.

“The current thinking is that based on today’s technology, we suspect corn-based ethanol will generate at least 15 billion gallons,” said Brian Jennings, the executive vice president of the American Coalition for Ethanol, an association of ethanol and corn producers. “Beyond that, it’s uncertain. The marketplace will make that determination on where it will come from.”

Yet some members of Congress would like to make the president’s goal for biofuels a mandatory target — the equivalent of 2.3 million barrels a day that would, in effect, create an ethanol industry roughly the size of world-class oil producers like Kuwait or Nigeria.

The economics of cellulosic ethanol, made from nonfood crops and agricultural waste, are also unclear. Since cellulosic ethanol, still at an experimental stage, is twice as expensive as corn-based ethanol, there are currently no commercial-scale cellulosic plants.

( the ecomonics of ethanoal is already total bull . If the ecomoics were encourageing and ethanol compe ive with gasoline, why $50B in subsidies and grants? "it's your money" )

Lawrence Goldstein, an energy analyst at the Energy Policy Research Foundation, an industry-financed group, has been warning for nearly a year that the government’s twin goals of encouraging refiners to increase production and promoting increased supplies of biofuels work against each other.

“These two policies are not complementary,” Mr. Goldstein said. “These policies are in conflict.”

In addition, Mr. Goldstein said, an emphasis on ethanol might lead to increased volatility in fuel prices.

“If we get a bad corn crop, we will end up paying for it at the pump and on the food shelves,” he said. “We are not buying security. We are increasing volatility.”

Clay Sell, the deputy secretary of energy, acknowledged the concern, but said that rising energy consumption meant both biofuels and additional refining capacity would be needed in the long term.

“One can think that these goals are potentially in conflict,” Mr. Sell said. “But demand growth supports the need for investments in biofuels and growth in refining capacity. Are we concerned about it? Yes. But do we believe these concerns are well founded? No.”

Until the mid-1990s, the United States had significant spare refining capacity. But because of consolidation in the industry, the number of refineries declined while unprofitable operations were shut. As demand grew, however, and capacity remained flat, the picture changed. In recent years, refineries in the United States have been running at or close to full capacity.

( so the constraint in refining capacity was strictly self-imposed, to its enormous benefit, by the refining industry itself. Brilliantly forward looking )

Domestic refineries can now process about 17.5 million barrels of crude oil each day, much of it imported. But with consumption now close to about 21 million barrels a day, more imports of refined products are also needed.

In recent weeks, refiners point out that they have been increasing output: gasoline production in the United States is at its highest level ever, 8.85 million barrels a day.

Also, by increasing output from existing refineries, oil companies say they have expanded their production by 200,000 barrels a day since last year. Expansion of existing plants has added the equivalent of 10 new refineries over the last 10 years.

The refining industry has also spent vast amounts — more than $50 billion in the last 10 years — to meet requirements to produce cleaner fuels, according to the American Petroleum Ins ute, the industry’s main trade group.

But demand is outstripping supply. In the first three quarters of the year, gasoline use grew by 2 percent, nearly twice last year’s pace. Domestically produced supplies, though, have increased by only 0.5 percent a year on average.

Some consumers, meanwhile, are trying to drive less or are simply absorbing the higher cost. “I’m already driving the minimum,” said Dennis Zygnowicz, 51, of Garden City, Mich., who recently stopped at a S station and paid about $12 to put less than four gallons in his GMC Jimmy. “The only way I could do any less would be to ride a bike.”

Another driver, Tamar Bittelman, a kindergarten teacher from Berkeley, Calif., says her daily commute gives her little choice. “It’s unbelievable to me how much I’m paying for gas,” said Ms. Bittelman, who recently paid $3.56 a gallon to fill her 1998 Subaru Legacy wagon. “I’m just much more aware of how much every trip to the grocery store is costing us.”

Lisa Alcalay Klug and Nick Bunkley contributed reporting.

Copyright 2007 The New York Times Company

[jacobdrj]

lol, boo hoo.

They have keep prices low as long as they have to prevent prices from going up. This is just code for the oil companies to lower production. People would still buy the same amount of oil if biofuels would be introduced. If they don't like it, they should be the first to get in on the action and be a front runner in biofuel manufacturing.

If the oil companies want to shoot themselves in the foot like they did during the embargo of the 1970's than let them: It will take a few years, but we will just change our lifestyles and drive less, ultimately making lower prices for gasoline.

[Nbadan]

The oil companies have a monopoly on oil refining capacity and anytime someone has a monopoly, you know they are gonna take advantage of it.

[Wild Cobra]

The oil companies have a monopoly on oil refining capacity and anytime someone has a monopoly, you know they are gonna take advantage of it.

Not quite true. Sure, about five en ies own most of them. That is not a monopoly, but an oligopoly. Believe it or not, the oil companies don't make as much as people think. They make between 8 to 10 cents a gallon on fuel. It is the government that really makes out. The federal government gets 18.4 cents per gallon in direct taxes at the pump taxes. Now add state taxes, and some places have county and city taxes too. The national average for these combined at the pump taxes is 45.8 cents per gallon. Check out this March 2007 link on fuel taxes.

[boutons_]

"They make between 8 to 10 cents a gallon on fuel"

BS. check the oilcos' %age of gallon price for refining/distribution costs/profits.

http://www.energy.ca.gov/gasoline/margins/index.html

It's the cost out of the refinery (ie, refiner profits) that goes up when refining is constricted. It doesn't cost them anymore to refine it, they just raise the short-term price to match the excess demand.

[Wild Cobra]

"They make between 8 to 10 cents a gallon on fuel"

BS. check the oilcos' %age of gallon price for refining/distribution costs/profits.
http://www.energy.ca.gov/gasoline/margins/index.html

It doesn't tell us the profits. It is the cost that includes the profit they show us. That link is absolutely useless. Can you separate the operating costs and profits from those numbers? I can't. I can only guess.

If we assume the profit is 15% of the refinery cost, from the May 5, 2007 numbers, 15% of $1.26 is 19.9 cents. However, if you ever read the annual statements required by law the oil companies show their profits at about a 9% margine. If that margin applies to refineries also, that 19.9 cents is only 11.3 cents per gallon. With gas at $3.46 for that week, subtract the taxes and fees for $2.83. At 15% refinery profit, the oil companies profit is only about 7% for the refined gasoline. They make other products other than fuel and have their own pumps. The 8 to 10 cents is an annual average. The lower profit companies make about 8 cents while the more profitable ones make about 10 cents. Short term es are expected in business both ways. Also, if you read the refinery statement, it states the week price is based on:

"Refiner Margin (costs and profits) is calculated by subtracting the market price for crude oil from the wholesale price of gasoline. The result is a gross refining margin which includes the cost of operating the refinery as well as the profits for the refining company."

Note there is a shipping lag time too. What did they actually pay for the oil, for that period? Market crude price is rather erratic on the futures market, and it is called that because the price paid is not for that day.

This link is not useful for determining profit. It just shows a simple cost breakdown.

It's the cost out of the refinery (ie, refiner profits) that goes up when refining is constricted. It doesn't cost them anymore to refine it, they just raise the short-term price to match the excess demand.

It most certainly does cost them more when demand increases. They skip preventative maintenance on the refineries, but still pay the union maintenance workers. They pay overtime for workers to meet the demand. They have to change blends frequently, especially for California. Supply and demand does yield them a slightly higher profit, but it isn't anything like people like to believe. Some of the refineries are now in a mode where the normal workers are in limbo while preventative maintenance is being caught up after forgoing it since Katrina struck. Now the maintenance workers in these locations are getting overtime, and supply is down even though demand is less than 1% more of last years demand. Sure, the refinery prices change rather dramatically, but it is explainable if you know anything about the industry.

Keep this in mind. Over the last few years, since Katrina, there have been thirty-some odd investigations into the oil companies. No wrongdoing of them has been found. There were a handful of small independents discovered however.

[smeagol]

Oil companies = evil, evil corporations

By the way, oil is not the only commodity whose price has skyrocket. Copper, steel, corn, soybeen, gold, silver and just about every commodity has seen it's price double or triple.

Are mining comanies and agribusinesses also evil? Do they also manipulate prices?

[RandomGuy]

Not quite true. Sure, about five en ies own most of them. That is not a monopoly, but an oligopoly. Believe it or not, the oil companies don't make as much as people think. They make between 8 to 10 cents a gallon on fuel. It is the government that really makes out. The federal government gets 18.4 cents per gallon in direct taxes at the pump taxes. Now add state taxes, and some places have county and city taxes too. The national average for these combined at the pump taxes is 45.8 cents per gallon. Check out this March 2007 link on fuel taxes.

(shrugs)

Roads ain't cheap.

[Aggie Hoopsfan]

Did you really believe that article, croutons? That's just oil companies trying to pass the blame.

[boutons_]

Oil Industry Scales Back Refinery Plans

The Associated Press

Sunday 17 June 2007

Washington - A push from Congress and the White House for huge increases in biofuels, such as ethanol, is prompting the oil industry to scale back its plans for refinery expansions. That could keep gasoline prices high, possibly for years to come.

With President Bush calling for a 20 percent drop in gasoline use and the Senate now debating legislation for huge increases in ethanol production, oil companies see growing uncertainty about future gasoline demand and little need to expand refineries or build new ones.

Oil industry executives no longer believe there will be the demand for gasoline over the next decade to warrant the billions of dollars in refinery expansions - as much as 10 percent increase in new refining capacity - they anticipated as recently as a year ago.

Biofuels such as ethanol and efforts to get automakers to build more fuel-efficient cars and SUVs have been portrayed as key to countering high gasoline prices, but they are likely to do little to curb costs at the pump today, or in the years ahead as refiners reduce gasoline production.

A shortage of refineries frequently has been blamed by politicians for the sharp price es in gasoline, as was the case last week by Sen. James Inhofe, R-Okla., during debate on a Senate energy bill.

"The fact is that Americans are paying more at the pump because we do not have the domestic capacity to refine the fuels consumers demand," Inhofe complained as he tried unsuccessfully to get into the bill a proposal to ease permitting and environmental rules for refineries.

This spring, refiners, hampered by outages, could not keep up with demand and imports were down because of greater fuel demand in Europe and elsewhere. Despite stable - even sometimes declining - oil prices, gasoline prices soared to record levels and remain well above $3 a gallon.

Consumer advocates maintain the oil industry likes it that way.

"By creating a situation of extremely tight supply, the oil companies gain control over price at the wholesale level," said Mark Cooper of the Consumer Federation of America. He argued that a wave of mergers in recent years created a refining industry that "has no interest in creating spare (refining) capacity."

Only last year, the Energy Department was told that refiners, reaping big profits and anticipating growing demand, were looking at boosting their refining capacity by more than 1.6 million barrels a day, a roughly 10 percent increase. That would be enough to produce an additional 37 million gallons of gasoline daily.

But oil companies already have scaled those expansion plans back by nearly 40 percent. More cancelations are expected if Congress passes legislation now before the Senate calling for 15 billion gallons of ethanol use annually by 2015 and more than double that by 2022, say industry and government officials.

"These (expansion) decisions are being revisited in boardrooms across the refining sector," said Charlie Drevna, executive vice president of the National Petrochemical and Refiners Association.

With the anticipated growth in biofuels, "you're getting down to needing little or no additional gasoline production" above what is being made today, said Joanne Shore, an analyst for the government's Energy Information Administration.

In 2006, motorists used 143 billion gallons of gasoline, of which 136 billion was produced by U.S. refineries, and the rest imported.

Drevna, the industry lobbyist, said annual demand had been expected to grow to about 161 billion gallons by 2017. But Bush's call to cut gasoline demand by 20 percent - through a combination of fuel efficiency improvements and ethanol - would reduce that demand below what U.S. refineries make today, he said.

"We will end up exporting gasoline," said Drevna.

Asked recently whether Chevron Corp. might build a new refinery, vice chairman Peter Robertson replied, "Why would I invest in a refinery when you're trying to make 20 percent of the gasoline supply ethanol?"

Valero Corp., the nation's largest refiner producing 3.3 million barrels a day of petroleum product, recently boosted production capacity at its Port Arthur, Texas, refinery by 325,000 barrels a day. But company spokesman Bill Day said some additional expansions have been postponed.

"That's not to say we've changed our plans," Day said in an interview. "But it's fair to say we're taking a closer look at what the president is saying and what Congress is saying" about biofuels. He said there's a "mixed message" coming out of Washington, calling for more production but also for reducing gasoline demand.

"It's something that we have to study pretty carefully," said Day.

Ron Lamberty of the American Coalition for Ethanol said all the talk about biofuels threatening gasoline production is the "latest attempt to blame ethanol on Big Oil's failure to meet our energy needs."

"The ethanol industry continues to grow while oil refiners continue to make excuses for maintaining their profitable status quo," said Lamberty.

Sen. Byron Dorgan, D-N.D., said consolidation of the oil industry into fewer companies has left them with no incentive to expand refineries.

"It's a perverted system that does not act as a free market system would act," said Dorgan. "If you narrow the neck of refining, you actually provide a greater boost to prices which is a greater boost to profitability."

Richard Blumenthal, the attorney general of Connecticut, wants Congress to require refiners to maintain a supply cushion in case of unexpected outages.

In the 1980s, Blumenthal said at a recent hearing, refiners were producing at 77.6 percent of their capacity, "which allowed for easy increases in production to address shortages. In the 1990s, as the industry closed refineries, ... (that figure) rose to 91.4 percent, leaving little room for expansion to cover supply shortfalls."

--------

The bill being debated in the Senate is HR 6.

[smeagol]

Go Spurs Go!


Oooops . . . sorry wrong forum . . .

[boutons_]

June 18, 2007

Democrats Press Plan to Channel Billions in Oil Subsidies to Renewable Fuels

By EDMUND L. ANDREWS

WASHINGTON, June 16 — Senate Democrats are seeking a major reversal of energy tax policies that would take billions of dollars in tax breaks and other benefits from the oil industry to underwrite renewable fuels.

The tax increases would reverse incentives passed as recently as three years ago to increase domestic exploration and production of oil and gas. The change reflects a shift from the Republican focus on expanding oil production to the Democratic concern about reducing global warming.

On Tuesday, the Senate Finance Committee will take up a bill that would raise about $14 billion from oil companies over 10 years and would give about the same amount of money on new incentives for solar power, wind power, cellulosic ethanol and numerous other renewable energy sources. The bill is one of the signature issues this year for Democrats, along with immigration and the war in Iraq, and one in which they hope to clearly distinguish themselves from the Republicans.

But Senate Democrats are expected to go beyond the $14 billion in tax changes in the draft bill. Democratic officials said the committee is all but certain to adopt a proposal by Senator Jeff Bingaman of New Mexico that would raise $10 billion from companies that drill for oil and gas in federal waters but do not currently pay royalties to the government.

“We are cutting back subsidies for the oil and gas industry and using that money to finance the development of new and cleaner sources of energy,” said Mr. Bingaman, who plans to attach the entire tax package to the energy bill on the Senate floor next week.

( this is way mature and sensible, I'm sure the oilcos will throw 10s of $Ms at Congress to buy them off. Buying Congressmen for a few $Ms is a of a lot cheaper than losing 10 of $Bs )

It is unclear how much President Bush or Republicans in Congress will fight the proposed tax shift. The ranking Republican on the Senate Finance Committee, Senator Charles Grassley of Iowa, has already endorsed the $14 billion package.

But the plan could easily founder because of opposition to any one of many hotly disputed provisions in the broader energy bill. Just last week, a threatened filibuster by Republicans forced Democrats to postpone a floor vote on requiring electric utilities to produce 15 percent of their power from renewable fuels.

( now, why would the Repugs be against that? )

The White House, meanwhile, has threatened to veto the bill if lawmakers do not drop a provision intended to prosecute what Democrats call “unconscionably excessive” gasoline prices.

Senator Charles E. Schumer of New York has proposed that oil companies be prohibited from using an accounting method called “last in, first out” for inventories that saves them as much as $5 billion in taxes a year.

( wow, can I used LIFO accounting for MY IRS declarations? )

Because Senate Democrats want to offset the cost of any new tax breaks with tax increases elsewhere, many lawmakers are pushing for even more tax raises from oil companies.

Oil executives are protesting loudly, saying that the proposed changes would take money away from exploring and drilling in the United States and increase the nation’s dependence on imported foreign oil.

“They talk about our companies as if they’re owned by space aliens,” said John Felmy, chief economist at the American Petroleum Ins ute, a trade association. “They talk about energy security, but these provisions could have the opposite effect in terms of reducing our production here and increasing our imports.”

The oil industry has ample reason to worry. With consumers seething about gasoline prices increasing to more than $3 a gallon and oil profits reaching record highs, oil companies would be short of friends in Congress regardless of the party in power.

( why do obscenely wealthy oilcos need our subsidizing tax $$$ to look for oil? why are they allowed to pump oil and gas on US govt property while escaping royalties? )

Beyond the immediate jockeying, however, lies a bigger question: Is Congress putting taxpayers at risk by funneling billions of dollars in subsidies into alternative fuels that are still a long way from being profitable?

Indeed, industry experts said the Senate bill greatly understated the true cost of incentives for renewable fuels. Most of the incentives are set to expire at the end of 2009 or 2010, but Democrats in both the House and Senate have called for an increase in the production of such fuels by 2022. As a practical matter, the vast majority of “temporary” tax breaks are routinely extended once they are passed for the first time.

In addition to higher taxes for oil companies, House and Senate Democrats are hitting at the oil industry in other ways. The Senate bill would give the federal government more power to prosecute companies that engage in “price gouging” on gasoline prices, which is broadly defined in the bill as charging “unconscionably excessive” prices that reflect “unfair leverage.” A similar measure is moving through the House.

Separately, the House Natural Resources Committee passed a bill last week that would, among other things, crack down on companies that cheat on royalties they pay for oil and gas pumped on publicly owned land.

In effect, the various bills would transfer billions of dollars from oil companies to producers of renewable fuels.

The Senate bill would offer $5.6 billion in tax credits over the next three years for companies that produce electricity from renewable fuels like wind and geothermal power. It would offer tax-free bonds for new power plants with renewable or clean energy. It would offer tax credits totaling about a dollar a gallon to producers of cellulosic ethanol, and even bigger tax credits for “biodiesel” fuel. It would extend and expand tax breaks for plug-in electric cars and other vehicles that use alternative energy sources, and it would provide tax breaks for gas stations that offer renewable fuels.

In a nod to the politically powerful coal industry, the bill would also provide $1.5 billion in tax-free “clean coal bonds” for advanced coal-fired electricity plants and $332 million in tax credits for plants that make diesel fuel from coal.

Democrats in the House are moving with similar legislation. The House passed a bill earlier this year that would raise about $14 billion over 10 years from oil companies, and the House Ways and Means Committee is expected to mark up a new tax bill that would offer rich incentives for alternative fuels and increased efficiency.

( that. Pass a law that forces the coal plants to scrub every single smoke stack, and forces all new coal-fired plants to be totally clean. cheap coal is addictive as cheap oil. "cheap" always means " the environment" )

The Democratic bill contrasts sharply with the energy bill that the Republican-led Congress passed in 2005. The Senate bill offers less than $1 billion in incentives for coal, no tax breaks for nuclear power and tax hikes for oil. But two years ago, Congress approved $11 billion in additional tax breaks, of which $7 billion went to oil, coal and nuclear power.

“It is a dramatic change in policy, targeted at the big oil companies,” said Senator Ron Wyden, Democrat of Oregon. “It will show the country the kind of things we can do by taking away subsidies for fossil fuels and putting the money into new sources of energy.”

Privately, some Democrats say it is payback time: the oil industry’s political contributions have overwhelmingly gone to Republican lawmakers and President Bush, and many Democrats say they have little sympathy for the industry now.

It is unclear whether Republicans or Mr. Bush plan to protect the industry.

( GMAFB it's clear to anybody that the Repugs will protect their oilco owners)

In stinging criticism earlier this month, the White House Office of Management and Budget said the proposed price-gouging measure amounted to price regulation that would jeopardize investment in oil production and ultimately hurt consumers.

( .. yeah, right. What would you expect from dubya's OMB? )

In 2005, Mr. Bush threatened to veto a one-year measure that blocked oil companies from using the “last in, first out” accounting method for inventories. The Bush administration, echoing charges by the oil industry, said the measure amounted to a one-year windfall profits tax that would frighten investors by raising the prospect of further tax raises whenever oil prices jumped sharply.

Mr. Schumer’s proposal is similar to the 2005 proposal, except that his measure would be permanent.

The oil industry still has persuasive clout in Washington. Exxon, S and trade groups like the American Petroleum Ins ute have hired former Democratic lawmakers and Democratic lobbyists to help press their case.

They have carefully positioned themselves, picking their fights on selected issues that attract fairly little popular interest but affect potentially large amounts of money.

The effort is mostly defensive — fending off tax increases — but also has offensive elements. Royal Dutch S and other big companies hope to be big players in coal-based liquid fuels. And the industry in general is still pushing for Congress to open up more areas on the outer continental shelf for deepwater drilling.

But industry executives hold out little hope for emerging unscathed.

==============

Here's a classic situation where federal govt MUST intervene on behalf of the people to protect them and the environment from predatary corps, who, by definition, don't give about people or the environment.

[Wild Cobra]

June 18, 2007

Democrats Press Plan to Channel Billions in Oil Subsidies to Renewable Fuels

By EDMUND L. ANDREWS

Sounds like it draws conclusions from H.R.6. I posted the link I to that bill about 38 hours ago. Looks like I beat The New York Times on this one.

Thread link

HR6, Clean Energy Act of 2007

Bill Summary and Status HR6, Clean Energy Act of 2007

The tax increases would reverse incentives passed as recently as three years ago to increase domestic exploration and production of oil and gas. The change reflects a shift from the Republican focus on expanding oil production to the Democratic concern about reducing global warming.

I though we were more concerned about energy dependence first. This will be a setback, won't it?

On Tuesday, the Senate Finance Committee will take up a bill that would raise about $14 billion from oil companies over 10 years and would give about the same amount of money on new incentives for solar power, wind power, cellulosic ethanol and numerous other renewable energy sources. The bill is one of the signature issues this year for Democrats, along with immigration and the war in Iraq, and one in which they hope to clearly distinguish themselves from the Republicans.

Fine, it takes money from profitable industry which will increase gas prices first of all. It then sets aside money for unprofitable ventures. If these methods were profitable, the free market would make more use of them.

But Senate Democrats are expected to go beyond the $14 billion in tax changes in the draft bill. Democratic officials said the committee is all but certain to adopt a proposal by Senator Jeff Bingaman of New Mexico that would raise $10 billion from companies that drill for oil and gas in federal waters but do not currently pay royalties to the government.

“We are cutting back subsidies for the oil and gas industry and using that money to finance the development of new and cleaner sources of energy,” said Mr. Bingaman, who plans to attach the entire tax package to the energy bill on the Senate floor next week.

Yep, the bill will increase the barrel price from these domestic offshore from zero to a rate of $9.00 per barrel. I though the democrats blamed the 'evil oil companies' for gas prices. How much more will this not only increase gas prices, but reduce such operations if favor of foreign oil?

It is unclear how much President Bush or Republicans in Congress will fight the proposed tax shift. The ranking Republican on the Senate Finance Committee, Senator Charles Grassley of Iowa, has already endorsed the $14 billion package.

Well, the initial vote on 1/18/07 was yes 228 democrats and no 193 republicans. Link:

Roll Call 37

The last action till recently was 1/18 when it was placed on the June calendar, and is now being actively debated in the senate since the 6th. Latest actions are several amendments being read.

But the plan could easily founder because of opposition to any one of many hotly disputed provisions in the broader energy bill. Just last week, a threatened filibuster by Republicans forced Democrats to postpone a floor vote on requiring electric utilities to produce 15 percent of their power from renewable fuels.

( now, why would the Repugs be against that? )

Maybe it has something to do with REQUIRING electricity be generated from FUEL? Fuel that at 15% would displace clean burning coal being used. Why not require 15% or more be a green source instead? Isn't that the purpose of the bill? Bio-fuel is not green!

The White House, meanwhile, has threatened to veto the bill if lawmakers do not drop a provision intended to prosecute what Democrats call “unconscionably excessive” gasoline prices.

Any sane person would without a very clear definition. Otherwise, the lawyers will be the ones making the billions!

Senator Charles E. Schumer of New York has proposed that oil companies be prohibited from using an accounting method called “last in, first out” for inventories that saves them as much as $5 billion in taxes a year.

( wow, can I used LIFO accounting for MY IRS declarations? )

But would yours be real commodities? This only changes short term numbers and has no real effect in the long term. Technically anyway, they have their reserves tank. If they use freshly shipped oil, take it directly to the refinery, then the last in is the first used. I could see possible legal ramifications that would make it more costly. If they had to account first in-first out, are they legally obligated to use first in-first of, which would increase the cost because of the extra movement involved?

Because Senate Democrats want to offset the cost of any new tax breaks with tax increases elsewhere, many lawmakers are pushing for even more tax raises from oil companies.

Oil executives are protesting loudly, saying that the proposed changes would take money away from exploring and drilling in the United States and increase the nation’s dependence on imported foreign oil.

That's how I see it.

“They talk about our companies as if they’re owned by space aliens,” said John Felmy, chief economist at the American Petroleum Ins ute, a trade association. “They talk about energy security, but these provisions could have the opposite effect in terms of reducing our production here and increasing our imports.”

The oil industry has ample reason to worry. With consumers seething about gasoline prices increasing to more than $3 a gallon and oil profits reaching record highs, oil companies would be short of friends in Congress regardless of the party in power.

( why do obscenely wealthy oilcos need our subsidizing tax $$$ to look for oil? why are they allowed to pump oil and gas on US govt property while escaping royalties? )

The only subsidies I am aware of is in biofuels. Royalties are based on location and I believe most locations do have royalties. Now people like to call tax breaks a subsidy, but it isn't.

Beyond the immediate jockeying, however, lies a bigger question: Is Congress putting taxpayers at risk by funneling billions of dollars in subsidies into alternative fuels that are still a long way from being profitable?

I am one who is sick and tired of these elitists thinking they know better than the free market. The market knows there is a growing sentiment for green energy, and are working on it already. I wonder if new green companies are contributing the dems?

Indeed, industry experts said the Senate bill greatly understated the true cost of incentives for renewable fuels. Most of the incentives are set to expire at the end of 2009 or 2010, but Democrats in both the House and Senate have called for an increase in the production of such fuels by 2022. As a practical matter, the vast majority of “temporary” tax breaks are routinely extended once they are passed for the first time.

These fuels will increase with normal market forces. They need no political help.

Running low on time. That's enough for now.

[Nbadan]

Don't hold your breath waiting for more fuel efficient cars to come from Detroit...

Fuel Economy Proposal Meets Resistance in Detroit

All Things Considered, June 18, 2007 · Proposed legislation would raise the requirement for Corporate Average Fuel Economy to 35 miles per gallon over 10 years.

Automakers recently have said it's impossible for them to meet tougher fuel efficiency standards, but New York Times Detroit Bureau Chief Micheline Maynard says carmakers in Japan and Europe already have to meet higher standards.

[xrayzebra]

Well there is always someone working on something. Look at
this video.

http://www.wkyc.com/video/player.asp...27&bw=hi&cat=2

[gtownspur]

Don't hold your breath waiting for more fuel efficient cars to come from Detroit...

Fuel Economy Proposal Meets Resistance in Detroit

All Things Considered, June 18, 2007 · Proposed legislation would raise the requirement for Corporate Average Fuel Economy to 35 miles per gallon over 10 years.

Automakers recently have said it's impossible for them to meet tougher fuel efficiency standards, but New York Times Detroit Bureau Chief Micheline Maynard says carmakers in Japan and Europe already have to meet higher standards.

Oddly enough, NbaDan forgot about the "New Thread" feature exclusive to ST users.

[Wild Cobra]

We are pretty much at the limits for fuel economy in vehicles. So little more can be achieved and the design cost becomes prohibitive to extract so little more. The science is simple, and we are almost at the limit of extracting power from fuel. Other countries achieve their high mileage by limiting the mass and size of the vehicles. We have higher crash test standards. To require high mileage standards would both reduce the safety of cars and reduce their size, limiting what we consider freedoms.

There are a few possibilities for the future, but they are not yet verified;

Most of the lost power is in heat. There is an engine design that may prove useful if anyone develops it. A six stroke engine. It has the conventional four cycles, intake, compression, power, and exhaust. Cycles of one design:

1) Intake air/fuel
2) compression
3) power
4) exhaust, injecting water at end of cycle
5) power, captures some engine heat, now steam power
6) exhaust

Links:

Wikipedia; Six stroke engine
Inside Bruce Crower’s Six-Stroke Engine
The Six-Stroke Engine
Beare Technology
Theory

Another solution is a fuel cell car that uses fuel instead of hydrogen, converting it to power at near room temperature. Yes, it can be done. This would be very efficient, but still has the problems associated with the fuel cell membranes.

As for conventional engines and high mileage standards. Forget it. Just not practical for the US consumer. We like our big toys.

[boutons_]

"We are pretty much at the limits for fuel economy in vehicles"

Total bull . You dumbuck right-wingers are all "Can't Do", like with fuel efficiency or pollution control, when your benighted ideology dictates.

You want less road deaths?

How about a federal law limiting blood alchohol in drivers to 0.05% or less, like countries serious about drunk driving, like "Countries with a 0.05% limit include Argentina, Australia (the limit for learner drivers and provisional/probationary drivers is 0.00%, or 0.02% in Western Australia), Austria, Belgium, Bulgaria, Croatia, Denmark, Finland, France[7], Germany, Greece, Iceland, Israel, Italy, Macedonia, the Netherlands, Portugal, Serbia, Slovenia, Switzerland, and Turkey." and whose legislators haven't been purchased by the Big Alcohol?

There's plenty technology left to improve engine efficiency but Detroit refuses to do the research, while the Japs and small companies are working on it. Same with lightening cars while maintaining crash resistance.

[boutons_]

"We are pretty much at the limits for fuel economy in vehicles"

right-wing dum ideologues say "Can't Do", while the Japs say "We're Doing It" (and outselling US mfrs):





Facts always trump knee-jerk ideology.

[xrayzebra]

boutons, you really do make me laugh. If the government tells
the big three to increase fuel economy, well, some magic wand
will be waved and it will happen. If the government lowers the
blood alcohol legal level to .0001, why everyone will just quit
driving drunk.

Who has the knee-ideology.....I would say you have. Did you
look at the video I posted. I should have told you look at the
whole thing, the first part is about cancer and second about
hydrogen.

[boutons_]

June 20, 2007

Politics Forcing Detroit to Back New Fuel Rules

By MICHELINE MAYNARD

WASHINGTON, June 19 — For a quarter-century, American automakers and their allies argued that any legislation to increase fuel economy standards would rob them of profits, force them to lay off workers and deprive consumers of the vehicles they wanted to buy.

Even as recently as last weekend, a lobbying group financed by auto companies was still running radio ads in 11 states, raising the prospect that soccer moms might lose the opportunity to buy big sport utility vehicles if they did not urge Congress to reject legislation calling for higher mileage.

“Why can’t they let me make the choice?” one of the ads said. “I’m all for better fuel economy, but for me safety is my top concern.”

( all scare-mongering, all the time, just like Bible-thumpers and the End Times bull , and the Repugs and their terrorist bull . )

But this week, with a vote possible in the Senate on an energy plan, Detroit blinked, and the car companies retreated from their longstanding argument. They are now lobbying for a modest increase in mileage standards, a position already adopted by Toyota, in the hopes of silencing calls for even tougher targets.

Auto executives say they changed strategy partly because longtime backers in Washington, who helped them defeat previous pushes to raise fuel economy standards, made it clear that the political climate had changed. If they did not back a proposal they could live with, lawmakers told the automakers, they might face even more stringent regulations.

( the legislators will wimp out and throw the voters a bone of slightly increased CAFE, rather than forcing their campaign donors to really go after efficiency with maximum effort. The legislators follow the $$$ rather than lead the country )

Consumers played a role, too, since they are no longer clamoring for those S.U.V.’s and trucks that Detroit had suggested they could not give up.

Environmentalists also found new support from surprising quarters, including a coalition of top corporate and former military leaders called SAFE, for Securing America’s Future Energy.

The group, led by Frederick Smith, the chief of FedEx, and Gen. P. X. Kelley, a former Marine Corps commandant, argues that higher fuel economy is among the steps needed to reduce the nation’s dependence on foreign oil.

“The world now has shifted dramatically from where we thought we could take care of our own issues to having to worry about all kinds of things,” said Gen. Charles E. Wald, a member of the group’s board and former deputy commander of the United States European Command.

With gasoline above $3 a gallon in much of the country, presidential candidates from both parties are also pushing for increases in fuel economy standards that could be even harder to meet than the plan the automakers are now backing. The Bush administration wants higher standards, too, under a plan Mr. Bush introduced during the State of the Union address in January.

Some of Detroit’s most loyal supporters, like Senator Carl Levin and Representative John D. Dingell, both Democrats from Michigan, have bluntly told the auto companies that there is little chance of escaping an increase — and that it is better to propose one than to have one imposed on them.

( what gutless bas s! IMPOSE an aggressive increase that will make a difference, since the automakers will never propose any pain for themselves )
Mr. Levin, joined by a number of other senators, proposed last week that automakers increase the fuel economy of their cars and trucks in the next decade, but with easier targets than the original bill, which may go before the Senate in the next few days.

The fuel economy standard for cars, 27.5 miles a gallon, has not changed since 1983. Light trucks, including S.U.V.’s, pickups and minivans, must achieve a minimum average of 21.3 miles a gallon over each carmaker’s entire fleet.

Under compromise legislation drafted by Mr. Levin, cars would have to achieve an average fuel economy of 36 miles a gallon by 2022, while trucks would have to reach 30 miles a gallon by 2025.

( 15 years to get from 28 today to 36 then? vomit! )

The original bill would require cars and trucks to reach 35 miles a gallon by 2020.

As recently as two years ago, auto companies turned back a Congressional effort to set fuel economy standards much higher, warning that such a move would wipe out jobs and profits, and limit their offerings of S.U.V.’s and pickups.

But the Detroit companies have lost billions of dollars and have cut tens of thousands of jobs anyway. And sales of smaller S.U.V.’s and cars have climbed.

( so Detroit was outright lying with their scare-mongering. Det is going to kill 1000s of jobs anyway, it's only way they can make a profit)

Mr. Levin has used Toyota’s reputation for building fuel-efficient cars as a selling point for his proposal, pointing out that it is a member of the Alliance for Automobile Manufacturers, the industry group that has been most vocal against fuel economy increases. “Toyota is known as a green car company,” Mr. Levin said at a news conference last week.

But officials at Toyota, which edged past General Motors as the world’s No. 1 automaker for the first time in the last quarter, were alarmed by the group’s negative lobbying strategy, people familiar with their thinking said. It started running new ads that seek support for Mr. Levin’s proposal.

Capitol Hill was crowded on Tuesday with dealers from General Motors, Ford Motor and DaimlerChrysler’s Chrysler Group, along with Ford’s president for the Americas, Mark Fields.

Mr. Fields visited six members of Congress, including Senator Evan Bayh of Indiana, to push for Mr. Levin’s version of the legislation, saying Ford sought “to advance aggressive — yet economically feasible — fuel economy increases” as part of the energy bill, according to a Ford statement. Debate could begin on Wednesday.

Environmentalists say the Levin proposal is so weak that it will do little good. The Sierra Club has referred to it as a “poison pill.”

Carmakers say the plan will probably cost the industry tens of billions of dollars in development costs for new vehicles and technology over the next decade. The United Automobile Workers union is pushing Congress for tax breaks and job protections while automakers retool their factories to produce higher-efficiency vehicles.

Martha Voss, a spokeswoman for Toyota, said Mr. Levin’s proposal would still be challenging for the industry. “But we think it’s a more reasonable approach,” she said.

House and Senate Democrats from Michigan have been telling automobile executives for months that they would have to accept some increase in mileage requirements.

"My message to them was that they should not be saying no, but should be saying yes to what they could achieve,” said Senator Debbie Stabenow, Democrat of Michigan.

Two weeks ago, Senator Byron Dorgan, a Democrat from North Dakota, told executives the discussion essentially was over. In what is viewed by the carmakers as a political tipping point, Mr. Dorgan declared at a hearing, “You’ve lost on this issue.”

The debate also went beyond the usual environmental groups that have fought for higher fuel standards for years. Members of the SAFE coalition, an offshoot of the bi-partisan Energy Security Leadership Council, realized they could use their corporate and military influence with members of Congress who might otherwise turn a deaf ear to environmentalists or individual companies.

“We concluded that the overall dependence of the United States on oil was a great vulnerability, and by continuing it, that we were helping the people who opposed us,” said Herbert D. Kelleher, Jr., executive chairman of Southwest Airlines.

“The place we could make the greatest advances in the shortest period of time was fuel economy.”

( 70% of oil goes to transport, so yes, greatly increasing transport efficiency is the obvious target, duh. I'm sure the oilcos will spend 10s of $Ms to undermine increased fuel economy. They do what's best for the oilcos, not for the country, even after the Repugs started the Iraq war so the oilcos could grab Iraqi oil )

Known for his political a en, Mr. Kelleher expressed surprise that Detroit companies initially did not sense a shift in public and political opinion. But, he said, he believed that they got the message.

“I think they recognize, too, that there is a problem and something needs to be done about it,” Mr. Kelleher said. “The debate is over about what needs to be done. Now the issue is the legislation.”

Edmund L. Andrews contributed reporting from Washington and Nick Bunkley from Detroit.

[Sportcamper]

[Wild Cobra]

Hmmmm.... I already made a reply to Boutons chart. Did I post it in the wrong forum, or fail to post it?

Boutons, you give us a nice pretty graph, but it doesn't say much. I'll bet if you look at three factors of the USA makers vs. others, you will find three factors larger, and because consumers want it that way.

1) Mass. People want to feel safe in their cars, SUV's etc. The larger mass takes more power to accelerate it from stopped positions. Many people look at crash test standards, and the heavier vehicles nearly always have better ratings.

2) Frontal Area. The larger the vehicle, the more of a cross section it has when driving. This increased wind resistance decreases freeway mileage because more power is required to push the vehicle through the air.

3) Proven systems. Many people like to not only stick to US makers, but don't trust the new hybrid systems. How ling do the batteries last? Who gets stuck with the disposal charges? The primary advantage a hybrid has is the regenerative braking systems. Since it had an electric drive motor, the motor can also be used in braking. Instead of wasting the braking force into heat, it is recharging the battery.

Now lets consider something serious about the weight. For better economy, auto makers have reduced the weigh of vehicles dramatically over the years. For a few MPG better ratings, more than 1,500 people are killed annually that would have survived in cars heavier by just 100 pounds.

Other things to consider. Many countries do have fleets of cars that have better mileage than us. However, when you look at what the people are driving, they are a fleet of smaller cars. That will affect the averages.

Let's also consider the Skyline, Evolution, and WRX. Skylines are not available for purchase in the USA. They do not meet the crash test standards. The release of the Evolution into the USA market was delayed by a year because it didn't meet the crash test standards. The WRX also wasn't available in the USA until it changed it's design, for crash test standards. How many of these high mileage vehicles sold in the Japan, Korean, and other markets cannot be sold in the states for failing USA crash test standards?

Back to the Evolution and WRX. Both these cars probably would have never been sold in the states until Rally Racing rules changed. To race in a USA rally race, so many vehicles must be sold in the USA market.

I also heard that a battery manufacturing company in Canada, that makes batteries for the Hybrids, is having a serious environmental impact around the factories also! In the name of being green, let’s pollute the earth with battery materials so we can save a few gallons of fuel, right?

[Nbadan]

Toyota recently announced that it's new hybrid2 vehicles could get between 100-125 MPG. American auto-makers jumped into the fuel-economy vehicle game to late and the first production run of Prius will lead to even more efficiency in production of future hybrid lines for Toyota. forget that Toyota had 2 million vehicle recalls, the most of any auto-maker. People trust Toyota.

[boutons_]

June 22, 2007

Senate Adopts an Energy Bill Raising Mileage for Cars

By EDMUND L. ANDREWS, NY Times


WASHINGTON, June 21 — The Senate passed a broad energy bill late Thursday that would, among other things, require the first big increase in fuel mileage requirements for passenger cars in more than two decades.

The vote, 65 to 27, was a major defeat for car manufacturers, which had fought for a much smaller increase in fuel economy standards and is expected to keep fighting as the House takes up the issue.

But Senate Democrats also fell short of their own goals. In a victory for the oil industry, Republican lawmakers successfully blocked a crucial component of the Democratic plan that would have raised taxes on oil companies by about $32 billion and used the money on tax breaks for wind power, solar power, ethanol and other renewable fuels.

( Repugs kow-towing to their owners and campaign contributors, enriching and protecting the super-rich and corps, yawn )
Republicans also blocked a provision of the legislation that would have required electric utilities to greatly increase the share of power they get from renewable sources of energy.

As a result, Senate Democrats had to settle for a bill that calls for a vast expansion of renewable fuels over the next decade — to 36 billion gallons a year of alternatives to gasoline — but does little to actually promote those fuels through tax breaks or other subsidies.

( however, the oilcos get $Bs in tax breaks and subsidies and low/non-collected royalties )

The combination of breakthroughs and setbacks highlighted the blocking power of the entrenched industry groups, from oil companies and electric utilities to car manufacturers, that had blanketed Congress in recent days to defend their interests.

The clashes and impasses also provided a harbinger of potentially bigger obstacles when Democrats try to pass legislation this fall to reduce emissions of greenhouse gases tied to global warming.

Democrats conceded that they had had won only a partial victory, but said they would have additional opportunities to push their agenda when the House takes up similar legislation, with the goal of passing it before the Fourth of July recess.

“This bill starts America on a path toward reducing our reliance on oil by increasing the nation’s use of renewable fuels,” said Senator Harry Reid of Nevada, the Senate majority leader.

Environmental groups, though disappointed by the setbacks on renewable fuels, nevertheless hailed the vote on higher mileage requirements as a long-sought victory that could eventually reduce American gasoline consumption by more than 1 million gallons of gasoline a day.

If the Senate bill becomes law, car manufacturers would have to increase the average mileage of new cars and light trucks to 35 miles per gallon by 2020, compared with roughly 25 miles per gallon today.

( wow, the high-tech, can-do America needs 13 years to move from 28 to 35 MPG. impressive! )

Car companies had lobbied ferociously for a much weaker requirement of 30 miles per gallon for light trucks and sport-utility vehicles. To muster enough votes to prevent a filibuster, about a dozen lawmakers from both parties hammered out a deal that included the higher standard but omitted explicit requirements for further increases in efficiency after 2020.

“We are thrilled,” said Kevin Curtis, a lobbyist for the Pew Campaign for Fuel Efficiency. “This is the first time in decades that the Senate has passed a significant increase in fuel economy standards.”

The car industry’s main trade association, the Alliance of Automobile Manufacturers, appeared stunned by the sudden compromise and refused to comment publicly on the bill Thursday night.

With a vote of 57 to 38, the Senate came three votes short of the number needed to cut off a filibuster on the tax package. Republican opponents argued that tax increases on oil companies would reduce exploration for oil and lead to higher prices on gasoline.

( that's EXACTLY the objective, which in turn will reduce consumption. the gutless, chicken , corrupt Repugs )

Republicans also blocked another central goal, known as the Renewable Portfolio Standard, that would have required electric utilities to produce at least 15 percent of their power from renewable fuels by the year 2020.

“Republicans continue to pander to the big oil and energy companies,” Mr. Reid complained after conceding defeat on those issues. “Republicans repeatedly demonstrate that they do not care about the priorities of the American people, throwing up roadblocks at every turn instead of working with us to reduce skyrocketing gas prices.”

Earlier in the day, President Bush had urged Congress to pass an energy bill, though he said the Senate measure fell far short of his goals.

Oil executives and their lobbyists had fanned out across Congress in recent days and run frequent ads in newspapers, all delivering a carefully coordinated message: higher taxes on oil production would lead to higher gasoline prices.

The oil industry has also fielded former lawmakers, including Bennett Johnston, former Democratic senator from Louisiana, and Don Nickles, former Republican senator from Oklahoma. And it circulated a study by the Heritage Foundation, a conservative think tank, on how higher taxes could lead to higher gasoline prices.

Senator Reid quickly accused Republicans of doing the bidding of oil companies at a time when they are earning record profits.

Republican opponents of the tax package said it was unfair to oil companies, would reduce investment in exploration and would ultimately increase American dependence on foreign oil.

“Instead of reducing gasoline prices, this is going to add to add to the cost of gasoline,” said Senator Jon Kyl, Republican of Arizona.

Republicans were themselves divided, with ten voting alongside Democrats to limit debate and prevent a filibuster. Only one Democrat, Senator Mary L. Landrieu of Louisiana, a major oil-producing state, voted to allow the filibuster.

The bill was particularly alluring to lawmakers from farm states, which already benefit from government supports for corn-based ethanol and stood to gain even more from additional incentives for wind power and cellulosic ethanol made from plants like switch grass.

Senator Charles E. Grassley of Iowa, the ranking Republican on the Senate Finance Committee, pleaded with members of his party to drop their opposition.

“We’re taxing the oil industry to get a renewable energy industry started,” Mr. Grassley said on the Senate floor. “I hope you’ll understand that God only made so much fossil fuel and that there’s got to be a follow-on if we’re going to have growth in our economy.”

The Union of Concerned Scientists, a nonprofit group that has pushed for higher standards, estimated that the Senate requirements would eventually reduce American oil consumption by 1.2 million barrels a day and reduce emissions of heat-trapping greenhouse gases by an amount equivalent to removing 30 million of today’s cars from the road.

“Today, the Senate roundly rejected the automobile industry’s scare tactics,” said Mic e Robinson, director of the Union of Concerned Scientists’ clean vehicle program.

Sheryl Gay Stolberg contributed reporting.