The bill, approved by a vote of 85 to 12, also makes several key amendments on the environment to a version submitted by President George W. Bush's administration.

Republicans and Democrats came together to pass the legislation, which can only become law if the Senate reconciles a final version with the House of Representatives. Several previous attempts have failed.

The Congressional Budget Office estimates that the bill would cost 5.1 billion dollars in 2006. The legislation would give an additional 18 billion dollars in tax incentives to energy producers and users over the next decade

According to Senate Energy Committee chairman, Senator Pete Domenici, the reform should allow the United States to cut its consumption of oil by one million barrels a day by 2015.

The legislation would significantly expand the use of renewable fuels such as ethanol and biodiesel -- environmentally safer alternatives that use US corn and soybeans as part of the fuel blend.

It provides tax incentives to the oil, gas and nuclear industries, and also would create nearly a half million new jobs in the manufacturing, construction, agriculture and technology sectors.

The public interest group Taxpayers for Common Sense estimates that the tax credits for the nuclear energy industrty will total some 278 million dollars over the next 10 years, while the coal industry will garner some 2.25 billion dollars.

Consumers also benefit from some provisions, such as a tax credit to those who purchase hybrid vehicles.

Senate Majority Leader Bill Frist, hailed the legislation. "This bill thoughtfully and thoroughly tackles our energy challenges now and into the future," he said.

"In the development of alternative energy sources and the importance of conservation, this legislation will ensure a reliable supply of clean, affordable energy for years to come."

The White House has appealed for action to reduce US dependence on oil imports: improving conservation and efficiency; producing and refining more crude oil in the United States; developing alternative energy and helping fast-growing nations such as China and India to be more energy efficient.

The president has also called for lawmakers to allow drilling for oil in the Alaska National Wildlife Refuse (ANWR), a controversial proposal frequently decried by opponents of the legislation he proposed in 2001.

No such provision for drilling in ANWR was contained in the Senate bill, though it was approved in legislation approved earlier in the year.

The environmental group, the Sierra Club, expressed disappointment at the bill.

"Today America missed the opportunity to adopt an energy policy that will give Americans relief at the gas pump and put our nation on the path to a cleaner, cheaper and safer energy future.

"The US Senate passed a bill that does virtually nothing to lower our dependence on oil, funnels billions of dollars to polluting energy industries and opens up our coastlines and wildlands to destructive oil and gas activities, the group said.

But Democratic Senator Dianne Feinstein, who voted for the legislation, praised its efforts to encourage conservation by increasing some tax incentives for renewable energy.

"America cannot solve its energy challenges by simply adding more supplies. We must find ways to reduce demand for energy and create more effecient technologies," she said.

All rights reserved. � 2005 Agence France-Presse. Sections of the information displayed on this page (dispatches, photographs, logos) are protected by intellectual property rights owned by Agence France-Presse. As a consequence, you may not copy, reproduce, modify, transmit, publish, display or in any way commercially exploit any of the content of this section without the prior written consent of Agence France-Presse.

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