WASHINGTON (AP) — Republicans blocked a proposal Thursday to tax the oil industry an additional $29 billion, while the Senate moved closer to an agreement on raising automobile fuel economy for the first time in nearly 20 years.

The tax package was aimed at channeling billions of dollars to subsidize windmills, hybrid cars and other alternative energy resources. But many Republicans said it was too harsh on the oil industry and could lead to less production and higher gasoline prices.

The struggle over the tax provision signaled that Democrats may have a hard time pushing through the broader energy bill, which tilts heavily toward promoting energy conservation and renewable fuels and away from support for traditional fossil fuels.

As the debate over taxes reflected the Senate’s division, senators were said to be close to completing work on a compromise on automobile fuel economy that would garner enough votes to overcome strong auto industry opposition.

Senate Majority Leader Harry Reid, D-Nev., chastised Republicans for caving into pressure from oil companies in blocking the tax provisions, but said he planned to press forward with the overall energy legislation, hoping to finish late Friday.

‘‘We have (auto fuel economy) standards in this bill. This is a good bill. There’s a lot of good stuff in this bill,’’ said Reid. He said work was under way on a compromise aimed at gaining wider support.

‘‘I can live with either one of them,’’ Reid told reporters.

The talks were believed to be close to an agreement that would require automakers to increase the fuel efficiency of new vehicles to 35 miles per gallon by 2020, but abandon a provision that would have required 4 percent annual efficiency improvements after that. The automakers had complained vigorously about the 4 percent increase, saying they would be required to meet 52 mpg for cars and SUVs by 2030, a mandate they said they couldn’t meet.

A group of senators, including Michigan Democrats Carl Levin and Debbie Stabenow, have pressed for consideration of an even less stringent proposal that would let SUVs and small trucks achieve just 30 mpg and postpone the mandate to 2025.

On taxes, Democrats came three votes shy, 57-36, of the 60 votes needed to overcome a threatened GOP filibuster and add the massive tax package to the energy bill. It called for $32 billion in tax breaks for renewable and clean energy programs and energy conservation, all but about $3 billion paid for by oil taxes.