The U.S. Senate Republicans Thursday blocked a new comprehensive energy bill that would change the way the country is fueled.
The bill, passed in the House of Representatives last week, was blocked by 59-40 in Senate, only one vote short in getting the 60 votes needed.
The Republicans said they turned against the bill for it included tax increases for the oil companies.
Under a 21 billion dollar tax package, some 13.5 billion dollars in tax breaks for the five largest oil companies would be repealed to be used for tax incentives to promote renewable fuels and energy efficiency, according to the new energy bill.
Analysts said that the "Five Oil Bigs," namely Exxon Mobile, Chevron, Conoco Philips, Royal Dutch Shell PLC and BP PLC would be the hardest hit by the tax repeals.
Republican leader Mitch McConnell said the Democrats knew the bill with the tax package would never be signed into law because of the president's opposition.
The White House has voiced a veto threat. "Their proposal would raise taxes and increase energy prices for Americans," said the White House in a statement issued last week.
"That is a misguided approach and if it made it to the President's desk, he would veto it," it added.
The American Petroleum Institute, which represents the major oil companies, has also dismiss that the new oil taxes would cause companies to cut back on investments for producing oil and expanding refineries.
"The House ducked the opportunity to craft balanced energy legislation that would ensure reliable energy supplies for American consumers," said a statement released by the API last week.
"The tax provisions are counterproductive, making it more difficult to expand domestic oil and natural gas production and refining capacity while costing American jobs," it added.
Senate Majority leader Harry Reid said he was disappointed by the result, but added that he would strip the controversial tax package from the bill and seek to pass it later in the day.
"I'm disappointed we didn't pick up one more vote," said Reid in a floor statement immediately after the vote, "We're going to push the bill today if at all possible."
Dropping the tax package, he said would still leave a bill that would lift fuel efficiency standards by requiring an automaker's fleet to higher standards.
"What we're going to wind up with is still historic," he added.
According to the bill, U.S. automobile fuel economy should be boosted by 40 percent to an industry average of 35 miles per gallon by 2020. It would be the first increase in the federal vehicle standard for cars in 32 years.
It also would require a sevenfold increase in the use of ethanol as a motor fuel to 36 billion gallons a year by 2022, with two-thirds to be cellulosic ethanol from such feedstock as prairie grass and wood chips.
Source: Xinhua
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