Date: 11-Jan-10
Country: US
Author: Richard Cowan

Beleaguered U.S. Climate Bill Seeks Obama Lift Photo: Shannon Stapleton
The Valero St. Charles oil refinery is seen during a tour of the refinery in Norco, Louisiana August 15, 2008.
Photo: Shannon Stapleton

WASHINGTON – President Barack Obama’s State of the Union speech to Congress could indicate how badly he wants a global warming bill, which opponents say will cost U.S. jobs and raise prices — a scary prospect for politicians trying to ride out a horrible economy in an election year.

Obama, who played a dramatic role in negotiating a nonbinding international climate change accord last month in Copenhagen, now faces a tough economic and environmental balancing act to win the climate change legislation in 2010.

Administration officials insist it can be done despite the political difficulties in an election year. “President Obama and this administration … expect that a comprehensive energy bill, which includes a climate portion, to be passed this year,” Energy Secretary Steven Chu told reporters Wednesday.

For that to happen, Obama must put a “job-creation focus” on the bill to build a U.S. economy that would run more on alternative energy than dirty-burning coal and oil, said Daniel Weiss of the Center for American Progress. “The more specifics the better” in the State of the Union speech, Weiss added.

On Friday, Obama announced new tax credits to encourage investments in clean energy development that he said would help combat climate change and create jobs.

“This initiative is good for middle-class families. It is good for our security. It is good for our planet,” Obama said.

A House-passed bill is floundering in the Senate, where Obama has to convince 60 of 100 members to back a bill.

In one area — government incentives for expanding nuclear power — Senate sources said progress has been made in closed-door talks in search of a “sweet spot” for a compromise on the legislation that they hope to pass in coming months.

Even so, Senate backers and environmentalists off Capitol Hill say they are uncertain of climate change victory in 2010.

Difficult negotiations are expected between senators who want to require industries to cut their carbon emissions and those who see a climate bill as a vehicle for also helping domestic producers of nuclear power and oil and natural gas.

And, many Republicans are working hard to cast doubt on claims the climate change bill will create jobs.

Within the next few weeks, Senator Lisa Murkowski could force a Senate vote to stop the Environmental Protection Agency from regulating carbon emissions as a fallback if more comprehensive climate legislation is not enacted.

“This is a vote about the economy, not about the climate — whether these regulations will harm the economy,” said a Senate Republican aide.

If Murkowski, whose state of Alaska is a major oil and gas producer, manages to get a strong vote, even if less than needed to pass her measure, some undecided Republicans and Democrats could have second thoughts about voting later this year on a more comprehensive climate bill.

SENATORS SEEKING COMPROMISE

Despite all the hurdles, a bipartisan group of senators is forging ahead on a bill to cut carbon emissions by utilities, refineries and factories over the next four decades by 17 percent from 2005 levels.

Senator John Kerry, who is leading the effort, expects to be recovered from surgery and back in Washington when the Senate reconvenes on January 20, to huddle with independent Senator Joe Lieberman and Republican Senator Lindsey Graham, according to a spokeswoman. The two are key to winning support from moderates and conservatives.

One Senate staffer said 17 pro-nuclear senators have had input into what could become a major provision of the bill aimed at luring Republican votes. “That part (nuclear power) ironically is in fairly good shape at this point.”

While nuclear power plants do not emit the greenhouse gases that contribute to global warming, the industry has been weighed down by prohibitively high construction costs and controversy over nuclear waste storage.

Expanding domestic oil and gas drilling is another important goal for Republicans and that component of a climate bill is “still 100 percent in flux,” said the Senate source.

While producing more oil and gas here will do nothing to reduce greenhouse gas emissions, it would reduce dependence on foreign oil and potentially lure Republican votes.

On the sidelines of the U.N. climate meeting in Copenhagen, Kerry left open the possibility that the core of the climate bill could be scrapped. That is the “cap and trade” system for reducing carbon emissions through ever-dwindling pollution permits that could be traded on a new exchange.

A carbon tax and a “cap” without the “trade” component are among possibilities. But for now, Kerry, Lieberman and Graham are sticking with cap and trade, aiming to quell nervousness over the scheme by including tougher market controls.

(Editing by Jackie Frank and Bill Trott)

© Thomson Reuters 2010 All rights reserved

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Date: 27-Oct-09
Country: US
Author: Richard Cowan

Senate Democrats Set Climate Bill Industry Permits Photo: Lucas JacksonA layer of smog can be seen above Manhattan through the Verrazano-Narrows Bridge in New York, May 21, 2009.
Photo: Lucas Jackson

WASHINGTON – Democrats in the U.S. Senate will push climate change legislation that would grant, initially at no cost, pollution permits to an array of industries, similar to legislation passed by the House of Representatives last June.

Details unveiled by the Senate Environment and Public Works Committee show the Democratic bill would allocate about 30 percent of the free pollution permits to local electric distribution companies and another 5 percent to merchant coal firms. The grants are intended to smooth their transition to cleaner fuels while protecting consumers against price increases, and would mostly phase out by 2030.

An analysis by the U.S. Environmental Protection Agency said that under the Senate bill, consumers would be hit with only “slightly” higher costs than the House bill’s impact, which has been estimated at $80 to $111 per year.

“We’ve reached another milestone as we move to a clean energy future,” said Senate Environment and Public Works Committee Chairman Barbara Boxer.

Boxer is working with Senator John Kerry to advance the legislation in the Senate, where it faces staunch opposition from most Republicans and many moderate Democrats.

Other free industry permits outlined by the Senate Democrats include: 9 percent for local natural gas distribution companies; and 4 percent for energy-intensive manufacturers in the steel, cement, paper, glass and other industries in 2012 and 2013, rising to 15 percent in 2014 and 2015.

Electric utility customers would get about 35 percent of the free allowances to help compensate them for the higher costs of energy as utilities move away from burning cheap and highly polluting fossil fuels like coal.

The Alliance to Save Energy applauded the provisions, saying they put needed resources into energy efficiency as part of a broad program to reduce U.S. emissions of carbon dioxide and other greenhouse gases associated with global warming.

COST TO CONSUMERS

Kerry and Boxer, both Democrats, introduced their legislation on September 30, but some key details were just now being unveiled, including how carbon pollution permits would be allocated to industry and EPA’s assessment of the cost to consumers when industry is forced to curtail its use of fossil fuels like oil and coal.

At the core of the Senate and House bills is the creation of a “cap and trade” system that would lower carbon emissions from smokestacks over the next four decades.

Companies would be allowed to trade on the open market an ever-dwindling number of pollution permits for each ton of carbon they release into the atmosphere.

The House-passed bill calls for a 17 percent emissions cut by 2020, from 2005 levels, while the Senate bill is more ambitious at 20 percent. Neither bill is as aggressive as some passed by other developed countries, including the EU.

Some of the new Senate provisions were aimed at picking up support from senators representing coal-producing and farm states. For example, the committee said the bill would now stimulate the development of technologies that would allow the burning of less-polluting coal.

When the initial legislation was unveiled nearly a month ago, it drew a quick rebuke from Democratic Senator Jay Rockefeller of West Virginia, a leading coal-producing state.

President Barack Obama wants significant progress in Congress on climate legislation ahead of an international meeting on the environment in December in Copenhagen.

But with Congress mostly focused on a controversial healthcare reform effort and support for climate change legislation uncertain in the Senate, the Copenhagen summit is likely to start without clear carbon-reduction goalposts in the United States.

The United States is among the world’s top producers of carbon emissions and its progress setting pollution-reduction goals is seen as key to success in Copenhagen.

Most U.S. Republicans have criticized legislation mandating cuts in carbon emissions, saying it would eliminate jobs, encourage more companies to relocate factories abroad and significantly raise consumer prices.

The EPA analysis, however, said both the House and Senate bills would have a relatively small cost impact on consumers.

The Environment and Public Works Committee will hold three days of hearings next week on the bill and will attempt to approve the measure sometime in November.

Several other Senate committees are also reviewing climate change legislation and might not finish this year.

(Editing by Todd Eastham)

Date: 22-Oct-09
Country: US
Author: Richard Cowan

U.S. Climate Bill Prospects Photo: Jonathan Ernst
Energy Secretary Steven Chu answers reporters’ questions during the 2009 Reuters Washington Summit in Washington, October 20, 2009.
Photo: Jonathan Ernst

WASHINGTON – The Obama administration will press ahead with climate control legislation, despite difficult odds of passage before December’s international summit on global warming.

U.S. Energy Secretary Steven Chu told the Reuters Washington Summit that he was putting in long hours on climate issues and believes there was “a reasonably good possibility” that the U.S. Congress could deliver legislation reducing carbon dioxide emissions in time for the Copenhagen meeting.

“Look, I’m still going to be optimistic and say there is a chance that there will be a bill that the Senate and House have agreed upon that goes before the president before Copenhagen,” Chu said.

But Senator John McCain, who wants to rejuvenate nuclear power in the United States to help reduce carbon pollution, said there’s been no progress and he accused Democrats of being “beholden” to environmentalists who oppose an expansion of the industry.

“I’d like to see one concrete commitment on the part of the administration and Democrats,” McCain told the Reuters Washington Summit on Wednesday.

Instead, the conservative Republican who unsuccessfully ran for president against Barack Obama last year, complained that Nevada’s Yucca Mountain nuclear waste repository has been defunded and no plans were in the works for recycling spent fuel, while loan guarantees to build new plants were insufficient.

But Chu said an effort was being made to provide new government help for the nuclear industry, including possibly expanding the $18.5 billion loan guarantee program for expanding nuclear power generation.

Conservative Republican Senator Lindsey Graham, a close friend of McCain’s, announced this month that he would work with leading Democrats to fashion a climate change bill he could vote for. Since then, Chu has followed up with him.

Scientists blame carbon dioxide emissions from burning fossil fuels for global warming and more severe storms and droughts. December’s meeting in Copenhagen is an attempt to bring deep reductions in the world’s carbon emissions, building on the Kyoto Protocol that expires in 2012.

CAP AND TRADE

While enactment of a U.S. climate bill would boost the trust of developing nations in Washington’s intentions in Copenhagen, it wasn’t just McCain challenging Chu’s optimism.

“I don’t think we’re going to have cap and trade” enacted this year, Senator Charles Grassley told the Reuters Washington Summit. He was referring to the mechanism Obama and his fellow Democrats in Congress want to create to reduce greenhouse gas emissions.

Under cap and trade, a huge new system for trading an ever-declining number of carbon pollution permits would be created. Many Republicans and moderate Democrats in Congress fear the regime would result in higher energy prices. And some lawmakers fear the creation of a new Wall Street casino at a time when Americans are still angry over investor excesses that touched off the deep recession.

Instead of a domestic climate change bill, Grassley said there should be an international deal that would force developing countries like China and India to take carbon-reduction steps along with developed countries such as the United States.

“People of good faith say the U.S. ought to pass a bill to set a standard for the rest of the world and the rest of the world will follow along. But if the rest of the world doesn’t follow Uncle Sam, we soon become Uncle Sucker,” Grassley said, citing job-loss fears if manufacturers move factories abroad to get unrestricted amounts of cheaper fossil fuels.

Ethan Siegal of The Washington Exchange, a private firm that tracks Congress and the White House for institutional investors, saw Congress eventually taking a less ambitious course — one that many experts say will not come close to effectively addressing climate change problems.

He predicted a “down-sized energy bill next year” that could be a combination of tax credits for alternative energy sources, more offshore oil drilling and steps to promote nuclear energy.

If Congress fails to enact a climate change bill by December, as is widely expected, Chu said the United States can still show up in Copenhagen and point to climate control progress made this year.

Besides passage of a climate bill by the House of Representatives, Chu mentioned the $80 billion included in an economic stimulus law for investing in energy efficiency and renewable energy, along with new rules forcing car companies to build more fuel-efficient autos.

“It’s quite clear the United States is very serious about decreasing its carbon footprint,” Chu said.

(Additional reporting by Thomas Ferraro, editing by Anthony Boadle)