U.S. Senate guts energy bill

A trimmed down version of the U.S. energy bill got a step closer to becoming law, but moves by the U.S. Senate cut many of the planned benefits for renewable energy companies.

Senators dropped a controversial $21 billion package of tax breaks for cleantech, which would have been paid for mostly by repealing tax breaks for Big Oil.

The White House had threatened to veto the bill over the tax package, saying it would impede the development of domestic oil and gas production (see House approves energy bill).

The latest moves by the Senate appear to have appeased the Oval Office

"By addressing the concerns of the administration and moving forward with a bipartisan approach, senators have taken steps to improve our economic and energy security," said a statement from the White House.

"If this legislation makes it to the president's desk, he will sign it into law."

The bill still includes the first increase in automobile fuel efficiency in over 30 years, as well as a boost in the use of ethanol.

Car companies will have to reach a fleet average of 35 miles per gallon for cars and light trucks by 2020, a 40 percent reduction from current standards.

The legislation also expands the Renewable Fuels Standard by requiring that 36 billion gallons of biofuel be used by 2022.

The bill, which also includes some requirements to promote efficiency in appliances, lighting and buildings, is expected to be voted on in the House next week.