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Last Updated: Tuesday, 18 December 2007, 23:16 GMT
US Congress approves energy bill
Ethanol refinery being built in Portland, Indiana
Ethanol production is predicted to increase five-fold by 2020
The US House of Representatives has approved what lawmakers have described as a "historic" energy bill to improve fuel economy and reduce demand for oil.

The legislation, passed by the Senate last week, is due to be signed into law by President George W Bush.

It will mandate the first increase in vehicle fuel economy since 1975 while boosting ethanol production and making electrical appliances more efficient.

Plans to raise taxes on oil firms and set renewable targets were dropped.

Oil dependence

Environmental campaigners have broadly welcomed the bill, which attempts to address what President Bush has called the country's "chronic" dependence on oil.

The US seeks to reduce its reliance on foreign oil imports, amid concerns about global energy security and the soaring cost of crude imports.

The bill will not lead to an increase in either domestic oil or gas production, a situation which one Republican opponent of the legislation described as "lousy".

The main measure in the bill is a 40% increase in the standard fuel efficiency of cars and lorries to 35 miles per gallon by 2020.

Nancy Pelosi, Speaker of the House of Representatives
It is groundbreaking in what it will do
Nancy Pelosi, House Speaker

This is expected to reduce oil demand by up to four million barrels a day by 2030 and, its supporters claim, lower motorists' costs by up to $1,000 (500) a year.

The pursuit of alternative energy sources will focus on ethanol, with production set to increase fivefold to 36 billion gallons a year by 2020.

In future, the emphasis will be on developing ethanol from non-food sources such as wood chips and agricultural waste.

The legislation foresees annual savings of $13bn (6.5) from the phasing out of energy-intensive light bulbs by 2014 while dishwashers, freezers and washing machines will all be required to consume less energy.

"It is groundbreaking in what it will do," Nancy Pelosi, Speaker of the House of Representatives.

More than 90 Republicans supported the bill, giving it an easy passage in the Democratic-dominated House in a 314 to 100 vote.

But critics argue that its fuel conservation and production targets are not realistic and that energy costs will rise, Congressman Joe Barton describing it as a "recipe for recession".

Initial efforts to include commitments on the amount of renewable energy power firms must generate were dropped after opposition from Republican members and the White House.

Nevertheless the Sierra Club, an environmental group, said the bill marked a "clean break with the failed energy policies of the past".



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