Senate passes energy bill by 65 to 27 vote

The U.S. Senate late on Thursday, June 21, passed 65 to 27 energy-related legislation (H.R. 6) that would require a study and rulemaking on fuel economy improvements in medium- and heavy-duty trucks. The Senate bill includes other measures of interest to the trucking industry, including a loan program to encourage truck stop electrification.

H.R. 6 includes compromise versions automotive fuel economy provisions that were adopted by the Senate Commerce Committee on May 8. The legislation approved by the Commerce Committee would have mandated fuel economy improvements on medium- and heavy-duty trucks of 4 percent per year between 2020 and 2030. The revised legislation simply requires a rulemaking in response to a study.

One amendment to H.R. 6 that was approved would encourage electrification for hybrid vehicles at transportation facilities such as truck stops, airports and ports. The legislation directs the Energy and Transportation departments and the Environmental Protection Agency to establish a revolving loan and grant program to support such electrification.

One controversial amendment that was narrowly rejected would have disallowed a tax credit for renewable diesel based on adding animal fat to regular diesel. The Energy Policy Act of 2005 provided a $1 per gallon credit for renewable diesel. “The idea was primarily to try to get products, such as cellulosic products, that could eventually be added to or be turned into a fuel that could be burned as diesel fuel,” said Sen. Jon Kyl (R-Ariz.) in the debate on the bill.

The problem, Kyl argued, is that the Internal Revenue Service has allowed oil companies to obtain the renewable diesel tax credit by combining petroleum-based diesel with animal fat. “That was never the intent,” Kyl said. “The intent was to find some new kinds of biomass processes that could be converted to a diesel fuel and have it be a renewable diesel fuel – something truly new.”

But Senate Finance Committee Chairman Max Baucus (D-Mont.) suggested that Congress should be less concerned about how the renewable fuel is made than about the fact it is, indeed, renewable.

“There are a lot of offsetting interests here, to be honest about it, from different parts of the country,” Baucus said on the Senate floor. “Some are more concerned about biodiesel produced from products such as soybeans; others are much more concerned about renewable diesel produced by other products that could be organic products. In trying to get that balance put together, the goal is the same, which is to displace foreign oil.”

Kyl’s amendment to block the tax credit for fuel such as that being developed by ConocoPhillips failed by a 45 to 49 vote.

The Senate-passed version of H.R. 6 still must be reconciled with the much simpler version of H.R. 6 that was passed by the House in January as part of the new Democratic leadership’s “first 100 hours” legislative frenzy.