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US energy bill blocked in Senate, but not dead

WASHINGTON, Nov 21 (Reuters) -In a setback for the Bush administration, the U.S. Senate on Friday refused to end debate on a broad energy bill offering nearly $24 billion in tax breaks, but the legislation may get a second chance.

The bill faced stiff opposition in the Senate from Democrats and moderate Republicans, who complained it would protect petrochemical companies from lawsuits for contaminating water with MTBE, a gasoline fuel additive.

The energy bill was overwhelmingly passed earlier this week by the Republican-led House. In a procedural vote of 57-40, Senate Republicans failed by three votes to end a filibuster and proceed to a final vote.

Republicans control the 100-member Senate with 51 seats.

To resuscitate the energy package, Senate Democratic Leader Tom Daschle proposed deleting the MTBE measures and folding the rest into a must-pass spending bill to fund the government.

"The American people deserve much better from us in the future," said Daschle, who nonetheless voted to end the filibuster because he backs the bill's boost in ethanol use.

Intensive lobbying and arm-twisting continued until the final minutes of the vote to win support from a few Midwestern lawmakers who were still undecided.

Democratic aides said Republicans tried to woo votes by offering to insert funding for pet projects in a separate government spending bill.

The procedural vote raised doubts about the passage of the energy bill. Still, Senate Republican Leader Bill Frist of Tennessee said he would hold "at least one more vote," possibly early next week, to try to end the filibuster before Congress adjourns for the Thanksgiving holiday.

The energy bill includes $23.5 billion in tax breaks, with a total cost of about $31 billion over 10 years due to new funding, grants and production incentives. The White House had sought about $8 billion in energy tax breaks.

But the Senate debate over the bill boiled down to a fight over two kinds of gasoline additives.

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