BIPARTISAN ENERGY/CLIMATE BILL EMERGING

Deal nearing on Senate climate bill: lawmaker
Richard Cowan and Timothy Gardner (w/Mohammad Zargham), March 18, 2010 (Reuters)

"The Senate is close to wrapping up talks ahead of introducing a compromise climate change bill…Senator John Kerry told reporters [he expects to finish in about a week] after [presenting an 8-page outline of a proposed bill to] a coalition that represents automakers, forestry and paper companies, Big Oil, steel, mining, electricity and others .

"Kerry is working with Republican Senator Lindsey Graham and independent Senator Joseph Lieberman on a bill to require U.S. industry to cut emissions of carbon dioxide and other greenhouse gases associated with global warming…[Kerry said] there was still work to be done [to build support]…The measure will not take the exact approach of [now stalled] legislation approved by the House of Representatives in June, and by the Senate Environment and Public Works Committee in November. This would set an economy-wide "cap and trade" direction to reducing carbon pollution…"

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"Under cap and trade, companies would face limits on the amount of carbon pollution Washington would let them emit. Those limits would become stricter over the next 40 years, when supporters want an 80 percent reduction from 2005 levels. Also, required pollution permits could be sold on a regulated market…The three senators also talked about pollution reductions of 17 percent by 2020 below 2005 levels, a goal President Barack Obama has embraced.

"The Chamber of Commerce, which says it represents more than 3 million U.S. businesses of all sizes, is staunchly opposed to U.S. Environmental Protection Agency regulation of carbon dioxide…The three senators said…the bill would pre-empt the EPA from regulating the gases…The EPA is ready to issue final regulations as early as March 31 for automobile carbon emissions. That would clear the way for expanding regulations to smokestack emissions, although the agency prefers Congress tackles that problem."

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"Instead of an economy-wide cap and trade, the three senators are aiming to impose the market system initially on power companies, which contribute about 40 percent of carbon emissions…Power plants would face emissions limits starting in 2012 while big manufacturers and energy-intensive industry would not face limits until 2016…

"The bill would also include a hard price collar that would keep carbon prices between $10 and $30 a ton. Any polluter emitting below 25,000 tons a year would not be regulated…[T]he senators discussed a fee on fuels linked to the market price of carbon…[that] would be visible to consumers at petroleum pumps and on airline tickets…A tax at the oil refinery level that would not be as visible to consumers has also been discussed by the senators…[T]he Congressional Budget Office will analyze the [bill’s] potential costs to the federal government and the economy. EPA also is expected to conduct a six- to eight-week analysis…[The bill] could be… on the Senate floor…in June."