WASHINGTON, D.C. --- The U.S. Senate on Dec. 13 passed a pared-down energy bill that includes a landmark increase in fuel-economy standards for vehicles and a major boost for alternative fuels. The Senate passed the bill 86 to 8, after Democratic leaders agreed to a White House demand that oil industry tax breaks be left intact. The compromise reached between Democratic and Republican leaders also included dropping an earlier provision mandating that utilities generate more electricity from cleaner sources, the Los Angeles Times reported. The bill now goes to the House, which is expected to approve it this week. The White House has said President Bush will sign the legislation, in light of the compromise reached. The bill mandates a 40 percent increase in fuel efficiency for new cars and light trucks by 2020, for a fleet-wide average of 35 miles per gallon, and a fivefold increase in the amount of alternative home-grown fuels, such as ethanol, that must be added to the nation's gasoline supply by 2022. Of the 36 billion gallons of renewable fuels mandated for vehicles by 2022, 21 billion would be produced from biomass diesel and cellulosic sources still under development.

Originally posted on Fleet Financials