Senators predict a climate bill capping emissions only for utilities

By Juliet Eilperin
Wednesday, June 30, 2010

A bipartisan group of senators emerged Tuesday from a meeting with President Obama still divided over how to craft a climate and energy bill, with lawmakers predicting scaled-back legislation that would cap emissions from electric utilities rather than impose an economy-wide limit on greenhouse gases.

Last month Sen. John F. Kerry (D-Mass.) and Sen. Joseph I. Lieberman (I-Conn.) unveiled a bill that includes a broader emissions cap along with subsidies for the nuclear industry and limits on the Environmental Protection Agency's ability to regulate carbon. Kerry said in an interview that they would make more concessions to win Republican support, but he added: "My question is, which is the compromise of any of the others? Show me the compromise."

In the hour-and-a-half meeting Tuesday, Obama urged the 23 senators to "aim high," several lawmakers said. But the president also made it clear that "he wasn't putting out a particular recipe" for a bill, said Sen. Jeff Merkley (D-Ore.). "The Senate is going to have to figure this out."

Two GOP senators -- Susan Collins and Olympia J. Snowe, both of Maine -- said they would support forcing emitters to pay for their carbon output. But many Republicans remained unconvinced.

Sen. Lisa Murkowski (Alaska), the top Republican on the Senate Energy and Natural Resources Committee, said any measure that imposes mandatory limits on greenhouse gases and makes emitters pay for carbon dioxide output "will not sell in this country." And Sen. Lamar Alexander (R-Tenn.), who also attended the meeting, said he told the president to focus instead on pouring federal dollars into energy research and development, building nuclear power plants, and electrifying the nation's auto fleet.

Lawmakers discussed a more modest climate and energy bill that would target electric utilities and other stationary sources: Power plants account for roughly 40 percent of the nation's greenhouse gas emissions. Snowe issued a statement after the meeting supporting such a plan.

However, it is unclear whether there are enough votes for a utility-only carbon cap, said Joe Stanko, who heads government relations at the law firm Hunton & Williams and represents several industries that would face new regulation under a climate bill. Major power companies probably would demand several concessions for backing the bill, including exemption from regulation under the Clean Air Act and new rules on mercury, sulfur dioxide and nitrogen oxide emissions.

And Collins, who has authored her own climate bill with Sen. Maria Cantwell (D-Wash.), said she could support a price on carbon only if revenue from pollution allowances was returned to consumers. She added, "It's going to be very difficult" to find any bill that can muster 60 votes, the number needed to avoid a filibuster in the Senate. "The White House meeting underscored to me how many diverse views there are on how to proceed with any clean-energy bill."

Ralph Izzo, president and chief executive of the New Jersey-based utility PSEG, said Tuesday that his company could support a utilities-only bill: "It's a second choice to economy-wide, but if you have to start with a single sector, this would be the logical sector to start with."

Environmentalists such as Joe Mendelson, director of global warming policy for the National Wildlife Federation, questioned Republicans' resistance to a sweeping carbon cap.

"Republican leadership emerged from a meeting today saying nothing different than from a year ago," Mendelson said in a statement. "With a Gulf disaster and the public galvanized in favor of climate action, unfortunately they are still reading from Joe Barton's playbook" -- a reference to the Texas Republican's controversial apology to BP.

But several senators made it clear in the meeting that they do not feel compelled to meet environmentalists' expectations. At the outset, according to sources who spoke about the private session on the condition of anonymity, Senate Majority Leader Harry M. Reid (D-Nev.) suggested that Kerry and Lieberman's climate bill should serve as the basis for a broad energy bill. After some senators objected, the group discussed having as the base text either an oil spill bill authored by Murkowski and Sen. Jeff Bingaman (D-N.M.), chairman of the Senate Energy and Natural Resources Committee, or an energy bill the two senators wrote.

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