Critics of the bill, which is scheduled for a House of Representatives vote on Friday, say it is exploiting the hurricane tragedy to lift environmental rules that the energy industry has long sought to overturn.

In its analysis of the legislation, the CBO estimated it would boost direct federal spending by $1.5 billion over five years.

The biggest expenses would be funding to study and eventually build a new refinery for the US military, and money to more than double the size of the Northeast Heating Oil Reserve, the budget analysis office said.

"Petroleum refineries are expensive facilities, with capital costs ranging from about $2 billion to $4 billion, depending on their size, capabilities, and location," the CBO report said. It estimated the military refinery project would cost about $275 million in 2006-2010 for planning work before any construction began.

The legislation written by Republican Joe Barton of Texas also aims to add 2 million barrels per day of US refining capacity by offering abandoned military bases and federal land as construction sites. Its most controversial item would gut a portion of the Clean Air Act known as "new source review" that requires costly new equipment to cut emissions when refineries and coal-fired power plants are expanded.

No new US refinery has been built since 1976, despite a steady increase in gasoline consumption.

US energy companies say it is cheaper and more efficient to expand existing refineries, especially if environmental regulations could be lifted to speed up permitting work.

The CBO cautioned that another provision of the bill offering federal insurance for refinery construction delays could carry a "significant" cost.

The CBO said there is a "relatively low" chance of new refineries being built in the next few years, but any project that did happen could face delays for siting and financing.

"Standby support for such multibillion dollar projects could be very costly over a longer period," it said. "Such large projects commonly experience some regulatory or litigation delays in the course of their development."

The bill would also offer emergency support to refineries, pipelines or other companies that "operate critical energy infrastructure" during a federally declared disaster. The CBO said it could not estimate the cost of such assistance because disasters cannot be predicted.

The CBO estimated the cost of expanding the Northeast Heating Oil Reserve from its current 2 million barrels to 5 million barrels could top $242 million if prices remain high.

In March, the CBO estimated that adding 3 million barrels would cost about $167 million in 2006-2010. "However, current prices far exceed those assumed in the March baseline," and the cost could be an extra $75 million or more, it said.

Other measures with little or no budget impact would cut the number of anti-pollution gasoline blends to six and require the Federal Trade Commission to define fuel price profiteering.