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Climate Bill Seeks a Broad Coalition

The Jeffrey Energy Center, a coal power plant in Kansas. The bill seeks Midwestern support with a set-aside for energy-intensive industries.
The Jeffrey Energy Center, a coal power plant in Kansas. The bill seeks Midwestern support with a set-aside for energy-intensive industries. (By Charlie Riedel -- Associated Press)

Oil refiners would also get 2 percent of allowances, and automobile companies would get allowances that could be worth $2 billion a year starting in 2012. The oil provision was considered crucial for winning support of Texas Democrats Charlie Gonzalez and Gene Green.

The bill seeks support from key lawmakers in the Midwest by setting aside 15 percent of the allowances for energy-intensive industries worried that higher carbon costs would give an advantage to competitors from countries without climate policies, such as China and India. This provision was championed by Reps. Jay Inslee (D-Wash.) and Mike Doyle (D-Pa.). The committee decided against a tariff on imports from those countries.

Supporters of the bill said that because the allowances would be phased out between 2020 and 2030, industrial users and utilities would still have incentives to invest in energy efficiency and renewable energy to cut carbon dioxide emissions: Those investments are long-term. But critics of the bill said that by muting price increases for consumers, the bill would undercut incentives for ordinary Americans to use energy more efficiently.

The next stop for the legislation is the House Ways and Means Committee, which could make revisions, especially in areas such as auctions, tariffs and taxes that are outside the Energy and Commerce Committee's jurisdiction. Then the measure must still win full House support and reconcile with a version from the Senate. But top Democrats said that because of the diverse makeup of the House Energy and Commerce Committee, something similar to the draft released yesterday would probably have enough support to get through the entire House.

"Waxman's bargaining has gained major utility and energy-intensive-industry support, key not only to committee approval, but to possible adoption by the full House," said Paul Bledsoe, communications director at the National Commission on Energy Policy.

"To see members who've been in different places on energy from the Rust Belt, oil patch and rural America come together . . . is a big deal," said Jeremy Symons, senior vice president at the National Wildlife Federation.

The Obama administration could bolster that unity through other measures, too. Yesterday, Energy Secretary Steven Chu, speaking to the National Coal Council, outlined how $2.4 billion in stimulus funds would be allocated to carbon capture and storage projects.


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