Senate climate bill likely to include off-shore drilling, delayed CO2 curbs for some industries

(Remnants of steel plant with Three Mile Island nuclear plant behind it from Flickr and photographer Scooter Flix/Scott Shatto)


What form will the bi-partisan Senate climate bill finally take? New developments in the past week suggest the following:
• Industry, particularly trade-sensitive industry in the Rust Belt, may get a long reprieve.
• Off-shore drilling is likely to be part of the mix, probably with revenue sharing for the adjacent states.
• Nuclear power and natural gas could be part of a “clean energy standard” that would replace the current renewable energy standard RES).

These are three of the “asks” from major blocs of Senators, some of whose votes will be needed to get to 60.

In an analysis of the 30 or so fence-sitters, E&E News, the subscription wire service, has looked at the various blocs and their demands. Some are overlapping. The idea will be to swing some of these blocs, or at least some members, onto the yes-vote side of the fence to reach 60. They are now at 41.

The coal bloc (about 20 Senators) wants the cap on emissions by 2020 to be less than the 17% in the House bill and what was promised by the President at Copenhagen. They also want billions to develop “clean coal” technology.

The nuclear bloc (about 18) is looking for tax incentives and loan guarantees that they are likely to get. They also would like nuclear to be included in a “clean energy standard.”

The industrial bloc (13) is worried about job loss for energy-intensive industries with fierce international competition, such as steel, cement and glass. They want short-term transitional assistance and trade barriers for countries that don’t have similar curbs on CO2 emissions. (No point sending the jobs and CO2 to China, they say.)

The gas and oil bloc (13) wants more offshore drilling with revenue sharing for states. On the other side are some states, mostly East Coast, that don’t want drilling off their coasts (NIMBY).

Finally there are about 12 sector-specific advocates who want their industry phased in later, with utilities going first, which is likely to happen.

Meetings last week
President Obama met with 8 Democrats and 6 Republicans to hear them out for more than an hour last week.

Meanwhile, the triumverate of Sens. John Kerry (D-Mass.), Joe Lieberman (I-Conn.) and Lindsey Graham (R-S.C.), who are drafting the bill, met with the Big 3 opponents of climate legislation – the U.S. Chamber of Commerce, the American Petroleum Institute and the American Farm Bureau.

What the three Senators will emerge with in the next couple of weeks (or maybe after spring break, Kerry admitted Friday) will be what Graham calls a jobs bill that emphasizes energy independence and reduces air pollution. He also said off-shore drilling is a must. Sen. Carl Levin (D-Mich.) has asked a 10-year delay for trade-sensitive industries and Graham noted, “We need Levin.”

A few, such as Sen. Richard Lugar (R-Ind.) want an energy-only bill, but the President was clear this should be a comprehensive climate bill. Sen. Lisa Murkowski’s (R-Alaska) demand for drilling in ANWR has been rejected out of hand.

The three said earlier this bill is unlikely to embrace cap-and-trade.

Stay tuned.

(Sources: E&E Daily, E&ENewsPM)

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