Energy Bill: An Industry Windfall?

Congress last week passed energy legislation costing $14.5 billion in tax credits and spending. Republicans hailed the bill for its free-market principles and support of less polluting energy sources. Democrats called it corporate welfare for the unclean and well-off fossil-fuel industries.

What does the bill do?

Basically it’s a vast mosaic of tax breaks. Among the big winners: electric utilities (they’ll save $3.1 billion over 10 years), the coal industry ($2.9 billion) and the oil-and-gas business ($2.7 billion). Consumers get tax credits for rooftop solar panels, $500 for home energy improvements and from $500 to $3,400 in credits for the purchase of hybrid gasoline-electric cars or other “cleaner” vehicles.

Will it lower gas prices?

Even Bush acknowledged that it will have little or no impact here. The bill calls for nearly doubling production of the fuel additive ethanol by 2012 but does little else to reduce U.S. dependence on foreign oil.

Will it help prevent another blackout?

Not necessarily, though it makes utilities more accountable and encourages investments in nuclear energy, including construction of power plants, like the one above. The last time a new plant was ordered was in 1978.

What took Congress so long?

After six years, Republicans gave up on trying to win liability protection for makers of MTBE, a gasoline additive that has contaminated groundwater in some areas. Plus a $1.5 billion research fund was added at the 11th hour to aid oil and gas companies in the Texas district of House majority leader Tom DeLay. –By Eric Roston and Melissa August