US President George W. Bush signed into law a major energy bill that raises auto fuel economy standards for the first time in more than three decades and requires a quadrupling of biofuel production. The Energy Independence and Security Act -- aimed to fundamentally change the way the country uses energy -- sets a rising mandate for renewable energy up to 36 bn gallons a year by 2022 and establishes higher fuel economy standards for passenger cars and light trucks.
"Today we make a major step toward reducing our dependence on oil use, (and) confronting global climate change," Bush said at the signing ceremony.

The bill is an amalgam of House and Senate proposals designed to reduce dependence on foreign crude supplies from unstable areas of the world, and cut greenhouse gases that contribute to global warming. It has some similarity to Bush's 20-in-10 plan, which called for reducing gasoline consumption over the next decade through an alternative fuels mandate -- which would have included non-renewable fuels such as coal-to-liquids -- and increased fuel economy standards.
Bush said the new law addresses the country's vulnerabilities, especially reliance "on oil from foreign lands." More than 60 % of the nation's crude is imported. The President said the law would also "lead to some of the largest carbon dioxide emission cuts in our nation's history."

Cars and light trucks -- minivans and sport utility vehicles -- will have to average 35 miles per gallon by 2020, a 40 % increase from current levels. The new standard likely will mean auto makers will have to spend billions for new fuel-saving technologies and to overhaul plants to build new models, with some estimates putting the tab over time at about $ 100 bn for US and foreign auto makers.
It also establishes energy efficiency standards for appliances, the federal government and commercial buildings, requires light bulbs to become 70 % more efficient, and accelerates research into carbon dioxide management and storage.

The House approved final passage of the bill by a 314-100 vote after a several-month and hard-fought legislative battle. After repeated veto threats from the White House and Republican blocking in the Senate, Democrat leaders were forced to abandon a renewable electricity standard that would have required utilities to produce up to 15 % of their power from renewable sources such as wind and solar.
Also victim was a $ 21 bn energy tax package that would have cut tax breaks to major oil companies to fund renewable energy.

Democratic leaders, however, have vowed to take up the failed legislation in the new year. The National Commission on Energy Policy says the bill's increase in Corporate Average Fuel Economy levels and the Renewable Fuels Standard could reduce oil consumption by 5 mm bpd over the next two decades and save consumers as much as $ 161 bn in fuel costs. The American Council for an Energy Efficient Economy estimates it will save consumers more than $ 400 bn by 2030 and cut carbondioxide emissions by 9 % in the same time.
Bush reiterated his call for Congress to expand access for oil and gas development on the Outer Continental Shelf, and to encourage a nuclear-energy renaissance.

Source: www.downstream.com  / Dow Jones & Company, Inc.