Washington, D.C. - After weeks of intense deal-making, the House of Representatives on Thursday approved a landmark energy bill boosting subsidized biofuel production and raising vehicle fuel economy standards by 40%. Now only two things that stand to prevent it from becoming law: the Senate and President Bush.

The House's energy bill, passed by a vote of 235-181, is an extremely ambitious effort to boost clean energy production and reduce the nation's dependence on foreign oil. That ambition may be its downfall.

“Unfortunately, the bill contains several highly objectionable provisions that would impose higher costs on American taxpayers, electricity consumers and businesses,” the White House said in a statement threatening a veto. "Specifically, the bill raises taxes in a way that will increase energy costs facing consumers.”

The House measure has four main components. First, it increases vehicle fuel efficiency to a fleetwide average of 35 miles per gallon by 2020, up from the current level of 25 mpg. Second, it dramatically boosts production of ethanol and other biofuels, which the president has encouraged. Third, it requires utilities to obtain at least 15% of their electricity from renewable resources, such as wind and solar power. Finally, it includes a $21 billion tax package providing incentives for renewable energy production, paid for largely by taxes on Big Oil.

Those last two components create problems in the Senate and at the White House. Many Senate Republicans--especially in the Southeast where wind power is scarce--aren't comfortable with the "renewable portfolio standard" mandating utilities provide a minimum amount of clean energy production. They're not trying to be anti-green; they simply fear a mandate will raise electricity rates on their constituents and allies in the corporate world.

Earlier this week, the Edison Electric Institute, the industry group for investor-owned utilities, circulated a letter in the House urging lawmakers not to vote for the RPS. Corporations such as Atlanta-based Southern Company and Charlotte-based Duke Energy (nyse: DUK - news - people ) hold firm that a renewable mandate is a state issue, not a federal one. Currently, 26 states and the District of Columbia have some sort of renewable portfolio standard.

Senate Republicans also aren’t happy that they didn’t get enough say in drafting the bill, which will now head to the Senate sometime within the next week. “The Senate should not be forced to accept a bill written by Speaker Pelosi behind closed doors with no input from the Senate,” says Sen. Pete Domenici, R-N.M., the top Republican on the Senate’s Energy Committee. Domenici says he will do “everything in [his] power” to defeat the current energy bill.

President Bush also opposes the RPS, but he has additional concerns about taxes on the oil and gas industries. The $21 billion tax package proposed by Democratic leaders Wednesday would extend the production tax credit on wind energy four years, extend investment tax credits on solar energy until 2016 (though at only about one-third of current levels) and include $2 billion in clean coal credits. But it also includes $10 billion in taxes over 10 years on BP (nyse: BP - news - people ), ConocoPhillips (nyse: COP - news - people ), Chevron (nyse: CVX - news - people ), Royal Dutch Shell (nyse: RDSA - news - people ) and Exxon Mobil (nyse: XOM - news - people ).

Democratic leaders say the tax measure will not increase energy prices for consumers, but Bush has promised to veto any legislation raising taxes on Big Oil. And there's probably not enough support in either chamber to override a veto.

Some sort of energy bill will make it to the president's desk in the next several months, but it won't be this one. More likely, it will be a bill to raise fuel economy standards and biofuel production. Democrats finally got the auto industry to agree to the fuel economy increase, and enough lawmakers on both sides of the aisle support ethanol subsidies for that provision to pass.

Perhaps the most telling thing about the current bill is what investment firms are telling their clients. In a research note issued Wednesday, Kevin Book, an energy analyst with Friedman, Billings, Ramsey, predicted that the bill would pass the House. Period.

"We urge investors not to bet on this outcome," he said.