Offshore drilling still in climate bill, but with restrictions

The word is out about the contents of the Kerry-Lieberman climate bill, due for release at a 1:30 p.m. (EDT) news conference Wednesday. The Hill has links to a summary of the new draft on its Web site.

Offshore drilling is still in it but there are protections:
• If a state wants to drill within 75 feet of shore, nearby states that could be impacted by a spill can veto it.
• Safety regulations will be added later, pending the 30-day review by the Interior Department.

What's in the bill
Other key elements of the bill, the American Power Act, include:
• Cutting greenhouse gas emissions 17% (below 2005 levels) by 2020 and more than 80% by 2050.
• Pre-emption of states or regions having their own carbon market, but allowing them to restrict GHG.
• Pre-emption of EPA regulation over GHG from new plants but not over existing plants.
• $54 billion in loan guarantees for nuclear energy
• A price on carbon, with a floor of $12 a ton, to rise 3% a year and a ceiling of $25, to rise 5% a year.
• 37.5% revenue-sharing for states that allow drilling off their shores.
• Two-thirds of utility auction revenue (after paying down the deficit) returned to customers to help pay rising utility costs, referred to by some as cap-and-dividend.
• $7B a year for transportation infrastructure and efficiency.
• Investment in electric vehicles and tax incentives to switch heavy vehicles to natural gas.
• Expansion of the clean energy tax credit by $5B.
• Fuel producers and importers will pay a price for allowances, which they will not be able to trade.
• $2B for coal plants that capture and store carbon.

What happens next
After release, the bill is expected to go to Majority Leader Harry Reid (D-Nev.), who will merge it with some other pieces to craft a bill he thinks can get 60 votes. The Energy Committee bill, which passes committee last year, will be one of those pieces. It included a renewable electricity standard of 15%, efficiency measures and an overhaul of federal financing for clean energy projects. It also included allowances for wider oil and gas leasing in the eastern Gulf of Mexico, which isn’t likely to fly.

Progressives are hoping the bill will move in their direction as it is changed, to woo those on the left opposed to more offshore drilling.

Debate is expected in June or July.

(Sources: The Hill, Climate Progress , Sierra Club, the Washington Post Carbon blog, Greenwire)