While the House and Senate swiftly approved differing versions of an "energy independence" bill earlier this summer, reconciling differences in the bills may be more difficult than initially anticipated. There are both procedural and substantive differences that will prove contentious, and given the number of issues on the Congressional schedule for the next five weeks, it is unclear when a House-Senate conference committee would complete its work.
Procedurally, before a conference committee can be convened, both chambers must formally consider the same legislation. Therefore, the Senate will have to take up the House passed bill (H.R. 3221), amend it with their bill (H.R 6) and officially request a conference.
Since the Senate failed to get the votes needed to include the Finance Committee-approved energy tax title as part of its overall bill, we anticipate that Finance Committee leaders will make another run at adding a revised tax title to the energy bill before requesting a conference. In fact, Finance Committee Chairman Max Baucus (D-MT) has indicated he is currently looking to modify the $29 billion tax package - possibly by adding some coal-to-liquids incentives and making other changes-- to garner the 60 votes needed to add a tax title to the Senate energy bill.
According to Senate sources, Sen. Jim Bunning (R-KY) is working to add favorable coal-related provisions if the opportunity presents itself in the Senate.
Once the conference is begun, conferees will have to reconcile a number of thorny substantive differences between the House and Senate bills. For example, the Senate bill would increase auto efficiency standards to 36 mpg, and expand the mandate for production of ethanol and other alternative transportation fuels mandate, while the House bill does neither. On the other hand, the House-passed bill would mandate a 15% national renewable portfolio standard, which is not part of the Senate bill. In addition, the House bill contains $16 billion in renewable, energy efficiency and conservation incentives, which, at the moment, do not have counterparts in the Senate bill.
In addition, the White House has threatened to veto the legislation if certain provisions that "lead to less domestic oil and gas production" are in the final conference bill. Both the House and Senate bills would roll back certain oil and gas tax incentives in order to pay for incentives for renewables and other measures.
For all these reasons, what was once considered a bill that addressed only "low hanging fruit" has escalated into a more controversial measure and it is unclear if the leadership can get the energy bill over the finish line as quickly as hoped.