New Energy Bill Could Mean Potential Tax Credits, but also Increased Gas Prices
On July 29 Congress passed what said Sen. Pete V. Domenici, chairperson of the Energy and Natural Resources committee called "a bipartisan energy bill that will make a real difference to every American." President Bush will sign the bill in Albuquerque on August 8 at Sandia National Laboratories.
The bill, which spent five years in Congress, offers numerous incentives for consumers who use energy-efficient products in their homes. Consumers can earn a tax credit of 10-percent for upgrading their homes with energy-efficient products, including windows. In order to keep the cost of the provision low, there is a $200 limit on the credit for replacing windows; the credit is expected to go into effect January 1, 2006.
However, despite the savings for using energy-efficient products, we can also expect to see the cost of gas continue to increase. The new provision removes the Congressional mandate that supports adding methyl tertiary butyl ether (MTBE) to gasoline. While MTBE reduces smog caused by automobiles, it has also contaminated well water all over the country.
Now, refiners will have to reconfigure their plants for alternatives to MTBE.
Gene Edwards, senior vice president of Valero Energy Corp., said in a Wall Street
Journal article he estimates his company to lose about 60,000 barrels a day of
gasoline production next spring, as it will take as long as two years to reconfigure
the refineries. He says he expects the cost of gasoline to definitely increase,
estimating the increase to be about 8 cents per gallon.
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