Bush energy bill boosts nuclear power and coal

After more than four years of trying, President George Bush will sign a comprehensive $13.9bn (£7.9bn) energy bill early next week with new incentives for the nuclear and coal industry, a boost for ethanol production, and even an extension of daylight saving time.

The House of Representatives passed the measure by 275-156, and the Senate was expected to follow suit last night. The White House hailed the legislation as a monument to bi-partisan co-operation. Critics, mostly Democrats, said it lavished money on oil companies that are already enjoying a surge in profits thanks to soaring energy prices.

In fact, the incentives for boosting domestic oil and gas production are smaller than expected. The sectors that will benefit most are the nuclear industry - the recipient of tax credits and loan guarantees to build the first new plants in the US since the 1979 Three Mile Island accident in Pennsylvania. Coal producers will benefit from incentives for improved clean-burning technology for new coal-fired power stations.

Ethanol producers, mainly in the Midwest, will also gain. The bill has plans for 7.5 billion gallons of the corn-derived additive to go into the total US petrol supply. This is expected to generate 200,000 new jobs.

With effect from 2006, there will also be an increase in daylight savings time for an extra month on an annual basis. DST will now start on the second Sunday in March, and run through to the first Sunday in November. The provision was adopted over the objections of airlines, which complained it would play havoc with some international schedules.

But what the bill omits is as striking as what it contains. Though conservationists are unimpressed by the bill, it has no provision for opening up the Arctic Wild Life Refuge for drilling. That will be addressed in separate legislation later in 2005. Nor does it provide for any increase in required minimum mileage standards for new car models. Once again, Detroit's car lobby has beaten off attempts to do so. Thanks to the popularity of SUVs and other "gas-guzzlers", fuel efficiency today is no better than it was in 1981.

Most experts say that only in the long term will the measure have any impact on reducing the country's reliance on imported oil, which account for 58 per cent of the US's 20 million bpd. The bill will also do little to reduce petrol prices, hovering at near-record levels across the country.