Senate Democrats Forced to Accept Much Slimmer Energy Bill

Without enough votes, Senate Majority Leader Harry Reid has been forced to abandon a comprehensive energy bill. Gone is any tough climate provision. Will the House buy it?

The US Senate late Friday was poised to move ahead with a vastly slimmed down energy bill, minus the much fought-over climate provision that would have capped carbon dioxide and other greenhouse gas emissions – in addition to boosting renewable energy.

Senate Majority Leader Harry Reid (D) of Nevada was prepared to move after Democrats abandoned their efforts Thursday to pass a comprehensive climate-energy bill that would have for the first time put a price on greenhouse gases from power plants and other industrial smokestacks. The new bill, some who saw drafts of it say, appeared to be a mere shadow of the old.

In it, Mr. Reid has cobbled together a few pieces of legislation widely embraced by Democrats, which some analysts said would make it possible for him to introduce and get voted on this coming week. It remains to be seen, however, whether the House of Representatives will accept the new bill, which is drastically different from the comprehensive climate-energy bill passed by the House last year.

Reid’s bill does not put a price on carbon emissions, or mandate a percentage of renewable energy, or provide debt financing for clean energy, or subsidize electric vehicles, writes Kevin Book, energy analyst with ClearView Energy Partners, a Washington energy market research firm in a snap analysis of the bill. It also does not open new areas to offshore drilling.

What it apparently will include, he and others say is:

  • An oil spill title based on the Senate Energy Committee’s Outer Continental Shelf Reform Act. It also includes a provision raising the liability cap for oil companies under the Oil Pollution Act – up to $10 billion from $75 million currently.
  • A $5 billion home efficiency incentives package to encourage retrofits called HomeStar.
  • Natural gas vehicle incentives of about $4.1 billion.
  • Expanded land and water conservation.
  • In an attempt to win the necessary 60 votes in the Senate needed to forestall a Republican filibuster, Democrats this year had developed four distinct types of comprehensive climate bills.

These included an economy-wide cap-and-trade proposal that would have capped carbon emissions and won revenues from selling permits to industrial, utility and other big emitters. Another bill embraced only “clean-and-green” energy, and a third bill would have been a utility-only cap-and-trade. Lastly, a carbon tax was considered, too.

None could get past the filibuster roadblock.

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Only one Republic, Lindsey Graham of South Carolina ever publicly considered voting for a climate-energy bill. Gone are the grand aspirations for a bill that would sweep the US forward in the fight against climate change, embodied in legislation supported by Sens. John Kerry (D) of Mass. and Joe Lieberman (I) of Conn. as recently as April.

Some, like the Business Council for Sustainable Energy, a coalition of energy efficiency, natural gas, and renewable energy industries trade groups, were fighting late in the day to add a Renewable Electricity Standard requiring that a growing percentage of electricity used across the US be derived from renewable energy sources. They also called for a national Energy Efficiency Resource Standard requiring energy savings through efficiency programs.

Prospects for such a gaunt bill – after months of considering much more ambitious proposals – were clearly a big let down for environmentalists, who had fought for the earlier legislation as a “first-step” that could always be toughened later. But environmental groups, labor unions and power companies were still fighting late Friday to include a renewable electricity standard in the new energy bill.

“We’re happy to support a bill that responds to some aspects of the oil spill and land conservation,” says Anna Aurilio, Washington office director for Environment America. “But it’s clearly not the clean energy revolution we need to re-power America or save the planet.”