The US Senate refused to allow a vote on a proposed $31bn (£18.19bn) energy bill after concerns over alleged water contamination by a petrol additive.
The energy bill, covering the oil, natural gas, coal, electricity and nuclear power industries, offered nearly $24 billion in tax breaks.
But a clause that would protect petrochemical companies from water contamination lawsuits proved a sticking point that sidelined the bill for now.
Democratic-led senators refused to end the debate and allow the
wide-ranging bill to go to a vote.
They were unhappy with a provision that would exempt methyl tertiary butyl ether (MTBE), a gasoline additive, from product liability lawsuits.
It was blended into gasoline during the 1990s to make it burn cleaner, but is now blamed for affecting water supplies in more than 1,500
communities, with clean-up costs in the billions of dollars.
And environmentalists claimed the proposed waiver was to favor to a few
petrochemical companies in Texas and Louisiana.
The Republican-written energy bill was overwhelmingly passed earlier this week by the Republican-dominated House.
To get the energy package back on the track, Senate Democratic Leader Tom Daschle has now proposed removing the controversial MTBE provisions.
The energy bill would cost about $31bn over 10 years due to new funding, grants and production incentives.
Republicans said they would try to drum up votes to pass the bill in the next few days.
Shortly after the vote, the city of Santa Monica announced
it settled an MTBE water contamination lawsuit with several oil
companies for $92.5m.
The companies must also pay unspecified clean-up costs.
In August the worst blackout in North American history affected
some 50 million people in the US and Canada, with the cities of New York, Detroit, Cleveland, Toronto and Ottawa all hit.