The bill was stiffly opposed in the Senate by Democrats and moderate Republicans, who claim it will protect petrochemical companies from lawsuits for contaminating water with MTBE, a petroleum fuel additive.
The energy bill was overwhelmingly passed earlier this week in the House of Representatives.
In the procedural vote of 57-40 on Friday, Senate Republicans lacked the three votes needed to proceed to a final vote. Republicans control the 100-member Senate with 51 seats.
In a bid to breath new life back into 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 voted to end the filibuster because he backs the bill's boost in ethanol use.
Intensive lobbying continued right up 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.
“At a time when America demands a thoughtful and far-reaching energy policy, this proposal instead delivered little bags of goodies to some individuals, not others, and says that is a substitute for policy”
Democrat Charles Schumer
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.
Democrats - and some Republicans - were incensed at a provision that would protect Texas makers of MTBE from product liability lawsuits, retroactive to 5 September, 2003. More than 1500 cities say they face costly cleanups because water supplies were tainted by MTBE, a suspected carcinogen.
The bill would ban MTBE by 2015 and give the makers more than $1 billion to convert to other businesses.
“At a time when America demands a thoughtful and far-reaching energy policy, this proposal instead delivered little bags of goodies to some individuals, not others, and says that is a substitute for policy,” said Democrat Charles Schumer of New York.