Climate Bills and a Green Economy

Senate Unveils Clean Energy Bill Aimed to Stem Global Warming, Create Jobs

May 12, 2010

AP - Sens. John Kerry and Joe Lieberman unveiled a long-awaited bill Wednesday that aims to curtail pollution blamed for global warming, reduce oil imports, and create millions of energy-related jobs.

The 987-page bill, the product of more than seven months of negotiations and tweaked recently in response to the Gulf oil spill, also includes new protections for offshore drilling and for the first time would set a price on carbon dioxide emissions produced by coal-fired power plants and other large polluters.

The legislation aims to cut emissions of carbon dioxide and other heat-trapping greenhouse gases by 17 percent by 2020 and by more than 80 percent by 2050. Both targets are measured against 2005 levels and are the same as those set by a House bill approved last year.

"We can finally tell the world that America is ready to take back our role as the world's clean energy leader," Kerry, D-Mass., said at a news conference, surrounded by environmentalists and leaders from an array of energy companies.

"This is a bill for energy independence after a devastating oil spill, a bill to hold polluters accountable, a bill for billions of dollars to create the next generation of jobs and a bill to end America's addiction to foreign oil," Kerry said, calling stakes for the legislation "sky high."

Lieberman, I-Conn., predicted the bill would pass, citing what he called a growing and unprecedented coalition of business, national security, faith and environmental leaders who are "energized" to work for it.

He and Kerry said in an interview that Senate colleagues have been surprised at the strong support from business leaders, including oil companies, major utilities and the nuclear power industry. Among those in attendance at Wednesday's news conference were Jim Rogers, chairman and CEO of North Carolina-based Duke Energy; Tom Kuhn, president of the Edison Electric Institute, which represents shareholder-owned electric companies, and Lew Hay, chairman and CEO of FPL Group Inc., a Florida-based power company.

The bill also is supported by most environmental groups. A coalition of 22 groups, including the Sierra Club, Natural Resources Defense Council, Environmental Defense Fund and The Wilderness Society, endorsed the bill in a joint letter Wednesday.

President Barack Obama added his support, saying the nation must work to end its dependence on fossil fuels.

"The challenges we face — underscored by the immense tragedy in the Gulf of Mexico — are reason to redouble our efforts to reform our nation's energy policies," Obama said in a statement. "For too long, Washington has kicked this challenge to the next generation."

Despite the lofty rhetoric, the measure faces a steep road in the Senate amid partisan disputes over the drilling provisions and other issues, including immigration reform.

South Carolina Sen. Lindsey Graham, who had been the bill's only Republican backer, withdrew his support last week, saying it is impossible to pass the legislation in the current political climate.

Graham issued a statement Wednesday praising the bill but casting doubt on its prospects.

"The problems created by the historic oil spill in the Gulf, along with the uncertainty of immigration politics, have made it extremely difficult for transformational legislation in the area of energy and climate to garner bipartisan support at this time," Graham said.

Senate Minority Leader Mitch McConnell, R-Ky., denounced the bill as "a job-killing national energy tax" that would raise the price of electricity and gasoline for American families and businesses.



From the other side of the political spectrum, the environmental group Oceana said it was shocked that the bill allows an expansion of offshore drilling.

"Expanded drilling makes slowing climate change harder. Expanding renewables, such as offshore wind, would make it easier," the group said in a statement.

Kerry and Lieberman said the bill would offer more protections against offshore drilling than current law.

The bill would allow states to opt out of federal drilling up to 75 miles from their shores, a concession to lawmakers concerned about offshore exploration in the wake of the Gulf of Mexico spill.

It also would allow states directly affected to veto drilling plans of nearby states if they could show that significant negative effects would result from an accident. The bill requires an Interior Department study to determine whether states could be economically and environmentally affected by a leak from an offshore drilling rig.

States that can demonstrate significant negative effects could pass a law opposing a specific project.

States that go ahead with offshore drilling would retain 37.5 percent of the federal revenue generated — a shift from current policy. Now royalty revenue goes to the Treasury; states collect no royalties.

Senators in Western states are likely to oppose the change, saying offshore revenue belongs to the nation as a whole. But coastal states argue that when an accident occurs, they're the ones affected.

Kerry and Lieberman said the bill would exempt farms and most small and medium-sized businesses from the emissions provisions, concentrating efforts on the largest polluters. Restrictions would not take effect until 2013 for power plants and transportation fuels, and 2016 for manufacturers.

Allowances would be granted to local electricity companies, which would be required to use them to help customers.

The bill also would offer incentives of up to $2 billion a year for companies that develop so-called clean coal technologies. It also has several provisions aimed at boosting nuclear power.