Stripped Down Energy Bill Leaves Out “Cap and Trade“

Without “cap and trade,” Senate majority leader Harry Reid said Tuesday the narrower energy bill has a better shot at overcoming GOP opposition.

Senate majority leader Harry Reid on Tuesday unveiled a vastly narrower energy bill, minus controversial climate provisions that would have capped carbon dioxide and other greenhouse gas emissions. The bill focuses instead on addressing the Gulf oil spill, home efficiency, land and water conservation, and natural gas powered vehicles.

After months of political wrestling, the Nevada Democrat last week closed the door on the “cap-and-trade” proposals, including one offered by Sens. John Kerry (D) of Massachusetts and Joe Lieberman (I) of Connecticut that would have focused emissions caps just on utility smokestacks. That proposal, among others, was far broader in scope.

By contrast, Sen. Reid said Tuesday that he believed he finally had the 60 votes necessary to avoid a Republican filibuster.

“This bill does not address every issue of importance to our nation’s energy challenges, and we have to continue to work to find bipartisan agreement on a comprehensive bill to help reduce pollution and deal with the very real threat that global warming poses,” Reid said in a statement. “But this is a good bill that deserves bipartisan support, and continues us along the path toward a clean energy future.”

The bill includes as its centerpiece “oil spill response” legislation that would: require BP to pay for damage from its spill; require oil companies to invest in new spill cleanup and prevention technologies; improve federal spill response; reform the Minerals Management Service; and update maritime laws.

But other aspects of the bill, according to a draft summary of the legislation, step into other energy arenas by:

Providing incentives for turning the nation‘s heavy truck fleet to natural gas and toward electrification of the nation‘s transportation sector.
Promoting “clean energy job creation” providing $5 billion of rebates to encourage homeowners to make efficiency upgrades as part of the Home Star program.
Fully funding a Land and Water Conservation Fund over the next five years to ensure that vital US lands and waters are protected into the future from climate change damage.
Increasing the $1 billion liability cap of the Oil Spill Liability Trust Fund to $5 billion and increasing fees to pay for it by requiring that oil companies pay 49 cents per barrel into the Oil Spill Liability Trust Fund.
But that was small solace to crest-fallen environmentalists and renewable energy advocates who were also plainly angered at Republicans’ consistent ability to block major energy and climate reform in the Senate.

“At every opportunity, a minority of Senators who are in the pocket of America’s largest polluters in the coal and oil industries chose obstruction over working together to solve America’s energy and national security challenges,” said a statement by a group of 350 organizations including the League of Conservation Voters, the Alliance for Climate Protection and the Union of Concerned Scientists. “As a result of their actions, the big polluters will continue to reap record profits at the expense of Americans.”

They weren’t the only ones upset. Renewable energy industry trade groups that have been back on their heels during the recession had been lobbying hard for a Renewable Electricity Standard (RES) to be part of the Reid-proposed Senate energy bill.

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That would have required utilities in all 50 states to get a certain percentage of their electricity from renewable energy and energy efficiency – a big boost to wind, solar, geothermal, and other non-fossil fuel sources. But they didn’t get that either.

“The US wind industry is in distress,” said Denise Bode, president of the American Wind Energy Association in a statement after the bill was released. “Wind power installations to date this year have dropped by 57% and 71% from 2008 and 2009 levels…. An RES is a critical component to ensure the US wind industry thrives.”

In an attempt to win the 60 votes needed in the Senate to overcome the threat of a Republican filibuster, Democrats this year had followed a Rubik’s Cube approach to comprehensive climate-energy legislation, exploring different combinations they felt might draw even a few GOP senators’ support.

There was an economy-wide cap-and-trade proposal that would have capped carbon emissions and sold permits to industrial, utility, and other big emitters. But that was soon labeled “cap-and-tax” – political poison in an election year. Another “clean-and-green” energy-only bill was weighed – as was a utility-only cap-and-trade (the Kerry-Lieberman bill). Finally, even a direct carbon tax was considered.

But none of these were filibuster proof. Lindsey Graham of South Carolina, was the only Republican to ever publicly considered voting for a climate-energy bill. Taking the slender offerings they received Tuesday, environmentalists though angry are now are lining up to try to help Reid in what is likely to be a struggle to pass even a much-diminished energy-environment bill.

President Obama called Reid’s bill “an important step in the right direction.” But he added, “I intend to keep pushing for broader reform, including climate legislation, because if we’ve learned anything from the tragedy in the Gulf, it’s that our current energy policy is unsustainable.”

Reid’s push for a slender energy bill is now competing for precious time in the next two weeks as the Senate also holds pre-August recess votes on a food-safety bill, Supreme Court nominee Elena Kagan, and a jobs bill.