New climate bill offers changes, compromises

McClatchy NewspapersMay 12, 2010 

WASHINGTON — Two U.S. senators Wednesday unveiled a new climate and energy bill that makes some concessions to business and would change the way that the nation produces and uses electricity in a global drive for cleaner energy and to end climate-damaging emissions.

Sens. John Kerry, D-Mass., and Joe Lieberman, I-Conn., said their "American Power Act" would protect the environment, add millions of jobs and reduce dependence on foreign oil.

The measure arrives as the oil spill in the Gulf of Mexico is revealing a hidden cost of the nation's dependency on oil and after President Barack Obama ordered a temporary halt in offshore drilling pending an inquiry into the causes of the drill rig explosion and spill.

The proposed legislation would give states the right to veto drilling within 75 miles of their coastline and would give a separate veto to neighboring states with a high risk of damage from a spill. In addition, coastal states would share in the royalties from oil companies if they approve offshore drilling.

Supporters will have a tough fight to get the 60 votes needed in the Senate. Energy touches on so many parts of the economy that many senators, including Democrats, worry about support for changing the nation's current energy mix. Obama said Wednesday he wants the bill passed this year. However, Democrats can't do it without some Republican votes.

Supporters point to the Gulf oil spill as proof that the country needs safer, cleaner sources of energy.

"Americans know what's at stake by continuing our dependence on fossil fuels. But the challenges we face — underscored by the immense tragedy in the Gulf of Mexico — are reason to redouble our efforts to reform our nation's energy policies," Obama said. "For too long, Washington has kicked this challenge to the next generation. This time, the status quo is no longer acceptable to Americans."

Many environmental groups said the draft was a good step in the right direction, but several warned it was weak on such things as incentives for energy efficiency and protections for forests from excessive harvests for energy.

Friends of the Earth criticized it for allowing offshore oil drilling and for what it called "billions in giveaways to corporate polluters," "myriad loopholes" and a weak emissions reduction goal.

"Without dramatic improvements this bill should not be passed, and senators should consider alternatives," said Friends of the Earth president Erich Pica.

Kerry said it was possible to get the bill passed this year, though time for debate will be limited, given the Senate's crowded agenda and November's congressional elections. The costs won't be known for another month.

The House of Representatives narrowly passed a bill last June that would reduce emissions. Its sponsor, Rep. Ed Markey, D-Mass., said that while there are differences in approach, both bills share the same emissions reduction goal and both would create jobs and cut dependence on oil. If the Senate passes the legislation, the House and Senate would have to work out differences.

"We're going to fight for 60 votes to make America more competitive, safer and stronger," Kerry said, adding that several Republicans had told him they were "encouraged" by parts of the draft.

Initially, South Carolina Republican Sen. Lindsey Graham was working with Kerry and Lieberman on a compromise bill, but he dropped out. Wednesday he said the oil spill and "the uncertainty of immigration politics" would make it "extremely difficult" to get bipartisan support for the bill now.

Kerry said the bill's approach was one of "reduce and refund."

Reductions would be made in the amount of carbon pollution and in the nation's dependence on foreign oil. The refund would come from fees paid for permits to emit a certain amount of carbon. That money would be returned to taxpayers and businesses during a transition period.

The bill would apply to about 7,500 businesses that produce 75 percent of the nation's greenhouse gases, Small businesses and farms would be exempt.

The three large producers of emissions covered in the 987-page bill are electric utilities, manufacturers and transportation.

Utilities would be allowed to trade their permits in a market.

One key difference from an earlier version of the bill is that the price of emissions would have a floor and a ceiling that would rise gradually with inflation.

Another difference is the way that oil and gas emissions are treated. Federal analysts would look at recent sales by refiners and other fuel providers to determine how much pollution they are responsible for and how many permits they would be required to purchase.

Manufacturers would have until 2016 before they would have to pay fees on their emissions.

ON THE WEB

Summary of the bill and other information about what it does

Aggregation of statements by environmental groups in reaction to the bill

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