(New throughout; adds Senate votes, lawmakers' comments)
By Tom Doggett
WASHINGTON, July 29 (Reuters) - The Senate voted on Tuesday against boosting mileage standards for gasoline-guzzling sport utility vehicles, leaving it up to a federal agency to set fuel economy requirements after first reviewing their impact on U.S. auto manufacturing jobs and vehicle safety.
The language was added to a broad energy bill that the Senate is trying to finish this week before adjourning for its month-long August recess. The energy legislation aims to offer billions in tax incentives to promote more domestic oil and gas drilling, restructure the U.S. electricity market and promote more coal and renewable energy.
Under current law, the U.S. passenger car fleet must average 27.5 miles per gallon (mpg) (8.55 liters per 100 km). However, SUVs, mini-vans and other light trucks -- which account for more than half of all new vehicles sold -- must average 22.2 mpg (10.6 l/100 km) by 2007.
Lawmakers rejected 65 to 32 a proposal by Sen. Richard Durbin, an Illinois Democrat, that would have required cars and SUVs to average 40 mpg (5.9 l/100 km) by 2015.
"Detroit is falling further and further behind when it comes to new and responsible technology to deal with fuel efficiency and the environment," Durbin said. "This energy bill before us doesn't challenge the automobile industry to do better."
Instead, the Senate approved 66 to 30 a rival plan by lawmakers from auto manufacturing states that would give the federal government years to set new mileage standards after analyzing the impact on auto jobs and vehicle safety.
Republican Sen. Kit Bond of Missouri and Democrat Carl Levin of Michigan said their plan has the Transportation Department -- not Congress -- decide if the fuel economy of cars, minivans and SUVs should be increased, and by how much.
JOBS, SAFETY EFFECTS
Under their proposal, the department's National Highway Traffic Safety Administration would first consider the impact of new mileage requirements on the safety of vehicles that may have to be built smaller, the competitiveness of U.S. automakers and the loss of autoworker jobs.
"Setting fuel economy standards is complicated," Bond said. "They should not be based on politically set numbers."
Tuesday's vote was a disappointment to environmental groups, who want a boost in fuel standards to slash gasoline use and reduce U.S. dependence on foreign oil imports.
The Sierra Club this week launched a campaign attacking General Motors' Hummer H2 sport utility vehicle. At an average 10 mpg (23.5 l/100 km), the H2 guzzles more gas than any other passenger vehicle on the road, the group said.
Separately, Sen. Dianne Feinstein, a California Democrat, and Sen. Olympia Snowe, a Maine Republican, plan to offer an amendment to require SUVs and light trucks to get the same fuel economy as passenger cars. They would close the SUV loophole by 2011, saving an estimated 1 million barrels of oil each day.
U.S. President George W. Bush met at the White House on Tuesday afternoon with Republicans and Democrats to lobby for the energy bill. "There was a great unanimity (in the meeting with Bush) that we want to get a bill, get it as fast as possible," New Mexico Republican Pete Domenici told reporters afterwords.
During the energy bill debate, Senate Republicans accused Democrats of deliberately delaying the legislation.
Majority Leader Bill Frist has vowed to keep the Senate in session until the energy bill is completed -- even if it means delaying the chamber's August vacation. "We can go into Saturday (debating this bill) if necessary," he said.
Democrat Harry Reid, the assistant minority leader, said the bill had many complex and important issues left to debate. "The question is, is this bill as good as it should be? I think the answer is a glaring 'no' at this stage," he said.
If the Senate passes an energy bill, it must still be reconciled with energy legislation passed by the House of Representatives.