House of Representatives pass new energy bill

by Tracie Potts
NBC News

Oil approaching $100 a barrel and heating bills expected to soar 30 percent this winter have made energy a top priority in Washington.

The newly passed House bill would raise fuel standards to 35 miles a gallon by 2020, the first change in over 30 years.

The automotive lobby isn't pleased.

"These aggressive standards will cost the domestic industry, by the estimates from the administration, nearly 100 billion dollars. So there are potential cost increases in the vehicles. But I believe that there will be performance enhancements as well," warned Dave McCurdy of the Alliance of Automobile Manufacturers.

The bill also includes a huge increase in ethanol use, requires 15 percent of electric power come from renewable sources and offers tax credits to Americans who conserve.

Who pays for these changes?

Most of the 21 billion dollars comes from rolling back tax breaks on big oil companies.

They say it'll backfire.

Still, Democrats insist the bill would make Americans less dependent on foreign oil.

"We are not going to stand by and allow them to be tipped upside down, and have money shaken out of their pocket by OPEC," said Massachusetts Representative Edward Markey.

Senate Republicans oppose the bill, and have threatened to block it.

The White House is advising President Bush to veto.