The Senate abandoned the legislation after it became clear a dispute over a gasoline additive, MTBE, was not going to be resolved and efforts to find two additional Senate votes needed to overcome a filibuster by opponents would not bear fruit.
Senate Majority Leader Bill Frist, R-Tenn., concluded there was not enough time before the Senate's scheduled holiday ecess to reach a compromise that would be accepted in both the chambers of Congress. Senators were expected to begin leaving town Tuesday and not return until January.
Frist remained committed to the energy bill, spokeswoman Amy Call said.
"We will continue to work over the recess period to bring all sides to an agreement," she said.
The bill passed the House easily last week, but an attempt Friday to shut off debate in the Senate and bring the measure up for a final vote fell two senators short of the 60 needed. Repeated attempts failed over the weekend to find two lawmakers willing to change votes, GOP sources said.
Failure to get a bill was a disappointment to the White House. President Bush repeatedly had demanded that Congress finish work on energy legislation, saying a new energy agenda was needed "for the sake of our national security and economic security."
Republican supporters of the bill said it would produce 800,000 jobs and assure more diverse energy choices by boosting production of coal, oil, natural gas, nuclear power and renewable energy.
But the legislation encountered fierce opposition in the Senate, not only from Democrats but also from a handful of Republicans who objected to its cost and hundreds of provisions characterized by critics as giveaways at taxpayer expense.
Sen. John McCain, R-Ariz., called it a "1,200-page monstrosity that is chock full of special interest giveaways" from subsidizing corn farmers by doubling the use of ethanol in gasoline to providing favorable financing to a shopping center that will contain a Hooters' restaurant.
But none of the issues caught the attention of opponents as much as the dispute over MTBE.
At the insistence of House Majority Leader Tom DeLay and Rep. Joe Barton, both of Texas where much of MTBE is made, the bill would protect manufacturers of the additive from product liability lawsuits stemming from contamination of drinking water supplies. Such contamination has been found in at least 28 states and potential cleanup costs have been put as high as $29 billion.
Sen. Barbara Boxer, D-Calif., characterized it as a "get out of jail free card" for MTBE producers.
On Monday, the White House stepped up pressure on House Republican leaders to take the MTBE provisions out of the bill, but still met resistance from DeLay and Barton. House Speaker Dennis Hastert, R-Ill., was willing to press the issue and force a settlement if necessary, but he wanted first to see a vote-count in the Senate showing the bill would pass.
A GOP official close to the negotiations said several Senate Democrats had expressed a willingness to change their votes and support the bill if the MTBE liability provision were taken out, but backed away from the idea after Republicans won a key vote Monday on a Medicare prescription drug bill.
"It was like a door slamming shut," said this official, who spoke on condition of anonymity. With the president assured of a victory over Medicare, there was a belief that Democrats didn't want to hand the president another triumph on a marquee piece of legislation, the official said.
Sen. Pete Domenici, R-N.M., chairman of a House-Senate negotiating panel on the bill, had struggled since early September to cobble together an agreement, repeatedly insisting that it not contain provisions that would expose the bill to a Senate filibuster.
He insisted that it not include a House-passed provision for drilling in Alaska's Arctic National Wildlife Refuge, a sure bet to kill the bill in the Senate. And he felt the requirement to double the use of ethanol, an economic boon to farmers, would sway enough senators to overcome those opposing the bill.
As opponents built momentum, Domenici accused Democrats of "leading a parade to kill the most important provision ever thought up for farmers."
Republican leaders vowed to pick up the bill in January. Discussions to finding ways to defuse the MTBE liability issue — possibly stripping it from the bill — will be at the top of the agenda, according to congressional and administration sources.
The bill contains hundreds of items sought by energy lobbyists, including tax breaks for oil, gas, coal and nuclear industries, plus tax credits for renewable energy and conservation.
Among the bill's major provisions: