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Last Updated: Wednesday, 19 December 2007, 19:04 GMT
Bush signs energy bill into law
President Bush signs the Energy Independence and Security Act surrounded by Congressional leaders
President Bush has called for the US to reduce its reliance on oil

President George W. Bush has signed a wide-ranging energy bill, designed to increase fuel efficiency and reduce US dependence on foreign oil, into law.

The Energy Independence and Security Act has been labelled "historic" by Democrat lawmakers although some Congressional Republicans oppose it.

It will mandate the first increase in vehicle fuel economy since 1975 while also boosting ethanol production.

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

Oil dependence

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

Enacting the bill, Mr Bush said it would go a long way to making the country "stronger, cleaner and more secure".

Truck in gasoline station
Changes to fuel economy could save motorists money

"I firmly believe this country needs to have a comprehensive energy strategy," he said.

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 act will not lead to an increase in either domestic oil or gas production, a situation one Republican opponent of the legislation called "lousy".

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

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.

Ethanol pursuit

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 (6.5bn) 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.

More than 90 Republican Congressmen supported the bill, giving it an easy passage in the Democratic-dominated House on Tuesday. It passed the Senate last week.

Critics argue its fuel conservation and production targets are not realistic and that energy costs will rise as a result.

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