With the fate of our nation's energy policy hanging in the balance, the latest iteration of the 2007 energy bill presses on through Capitol Hill. With an overwhelming vote of 85-12, the Senate passed their version of the bill last Thursday night and, as of Tuesday, the House approved it with a 314-100 vote. Now all that needs to happen is for the President to sign it into law. The White House has already verbally indicated that it will accept the current version, so it appears we just need to go through the motions to have an updated energy policy before the year is out.

Photo:Ariwriter, Creative Commons, Flickr

It is encouraging to see that we will have an update to the 2005 version that featured generous tax breaks for oil and gas drilling, though the effectiveness of this year's version can be debated. The House's original version that passed at the begining of the month featured forward-thinking provisions such as:

• Corporate Average Fuel Economy (CAFE) standards raised from 25 mpg to 35 mpg
• The requirement that 36 billion gallons of biofuels be produced domestically, on an annual basis, by 2022. This is equivalent to an estimated 20-25% of our annual gasoline requirements at that time. Of the 36 billion gallons, 15 billion must be corn-based.
• A federal Renewable Portfolio Standard, where 15% of our grid-generated electricity must come from renewable resources by 2020.
• An eight-year extension (for businesses) and a six-year extension (for residences) of the 30% Investment Tax Credit (ITC) for solar and fuel cells.
• $21 billion in new taxes for the oil industry, of which 100% of the proceeds would be used to fund the advancement of alternative energy.

With a more conservative Senate, however, it was a foregone conclusion that much of the renewables-friendly bill would have to be stripped if it was going to become law. Indeed, only the first two of the aforementioned bullet points actually survived the Senate vote. What we are left with is just a watered-down version of a bill that really doesn't accelerate energy technology or allow the private sector to fully maximize its potential. Furthermore, while the White House has championed biofuels as an eventual replacement for petroleum-based gasoline, this bill does nothing to advance the development of cellulosic ethanol or the much needed ethanol pipeline — and the industry will still face the same problems it does today. The opportunity to produce a comprehensive, modern day bill could have made a real statement with the way we, as a nation, wanted to lead the clean technology wave, and I am sorry to see that we do not appear willing to take the next step forward.

Instead, we will be doing little more than simply maintaining the status quo. True, the CAFE standards have not been updated in 30 years, and now we will get to see how the auto industry will react in the age of energy efficiency. We will likely see ad campaigns from the auto industry opining fuel efficiency instead of power and speed. Five years ago, I never would have thought this day would come. But we will likely have to wait awhile to see real change in our energy policy. While we wait, our investment opportunities in the sector will become less profuse.