The climate package emerging in the Senate will likely open up the last chunk of U.S. coastline closed to drilling and offer states a financial incentive to agree to rigs off their shores.

But the rest of the production portion of the bill remains a mystery as lobbyists for different segments vie to see which sources of energy will win and which will lose.

Oil and gas industry leaders, feeling that they got caught flat-footed in the House debate, have fought for a place at the table in Senate negotiations, though many in the industry oppose cap and trade or anything that makes carbon fuels more expensive.

"We're not interested in some sort of a deal for climate," said Lou Hayden, senior director for federal relations at the American Petroleum Institute. "We wouldn't want to see new sources of fuels brought on and then see people punished for using them."

And those in the fossil fuel industry share strong skepticism that any sort of climate bill will pass this year. They do, however, see potential for an "energy only" bill that would include offshore access and new standards for utilities requiring them to use more renewables, and possibly more natural gas.

Still, Sens. John Kerry (D-Mass.), Lindsey Graham (R-S.C.) and Joe Lieberman (I-Conn.) are forging ahead with their push to find a bipartisan compromise on a comprehensive climate and energy bill. To achieve that, Graham says he expects the legislation to lift a ban on drilling off Florida's Gulf Coast. It would also offer states some portion of the money the federal government gets from its leases.

"Offshore drilling and energy independence is essential to any bill I would support," Graham said last week. "There's a way to drill for oil and gas offshore that will really lead to energy independence."

The rest of the nation's coastlines were opened to drilling in 2008 after the price of gasoline shot to more than $4 a gallon. But federal law grants only four states -- Alabama, Mississippi, Louisiana and Texas -- a portion of the money from offshore drilling.

The eastern gulf has been estimated to hold 22 trillion cubic feet of gas, about a year's supply in the United States, and 3.88 billion barrels of oil, enough to meet U.S. demand for a little more than half a year. The western and central gulf have about 41 billion barrels of oil, or a supply of more than 2,000 days.

Resistance to drilling in the gulf has diminished in recent years. The Senate Energy and Natural Resources Committee approved an energy bill (S. 1462) last year that included lifting the ban on drilling off Florida by a broad bipartisan vote. Revenue sharing was rejected, though. That prompted Sen. Mary Landrieu (D-La.), one of the most ardent drilling supporters among Senate Democrats, to vote against the bill.

After a meeting last week, Landrieu said she has had more success with Kerry, Graham and Lieberman. "They are all on the same page as I am that partnership with the states needs to be established," she said.

The Energy Committee is dominated by Westerners less likely to support revenue sharing for drilling in federal waters. The provision's prospects are likely better on the Senate floor. And if Graham can get it added to the main climate bill, it would be difficult to dislodge.

Landrieu, who has met with the three to discuss the production portion of the bill, said they are firmly behind revenue sharing and more offshore drilling. Beyond that, she said just about everything is on the table except for drilling in the Arctic National Wildlife Refuge.

"The idea would be to open as much of the coast of the United States as possible and have appropriate revenue sharing levels, and we have to negotiate a lot of that," Landrieu said.

Environmentalists are lined up against allowing drilling off the Florida coast and find it particularly galling that the last protected waters would be opened up in a bill intended to help the environment.

"It would be an abomination to pass a climate bill that expands drilling in protected areas, when we have plenty of areas where they can already drill," said Jackie Savitz, who is leading Oceana's campaign against drilling off Florida's coast. "At a certain point, if you call it a climate bill, it doesn't pass the straight-face test."

Sen. Bill Nelson (D-Fla.) has threatened to filibuster a bill with expanded gulf drilling, and other key Democratic senators could flee if they feel the drilling language is too broad (see related story).

Some say, however, that the real test will be how much revenue the federal government should share. The four Gulf Coast states now get 37.5 percent of the revenue. Other states might be asked to do with less.

"What level of revenue sharing is the key," said a Republican drilling advocate. "We don't think they'll be willing to give as much as the gulf states received."

Some Senate liberals have indicated that they could support offshore drilling in a bill that puts some sort of price on carbon, but not in a stand-alone energy bill. But drilling in ANWR, which Sen. Lisa Murkowski (R-Alaska) has floated as part of the bill, is unlikely to survive because it would trigger a liberal revolt.

"It's a see-saw," said a Republican aide. "You tilt one way, the other side goes flying in the air."

Other natural gas demands

Natural gas companies want more than supply. They also want demand.

They are interested in getting federal help to expand the demand for their product, noting gas has about half the greenhouse gas emissions as coal and serves as an important backup of wind and solar generation. Underlying their effort is irritation that coal won out at the bargaining table in the House when the bill writers were doling out allowances.

"Bottom line is we'd like to see a growing role for this clean, made-in-America energy source," said Tom Amontree of America's Natural Gas Alliance. "Natural gas is twice as clean as coal, available right now, yet it is greatly underutilized in our country."

Gas producers and marketers would like to see the concept of a Renewable Energy Standard, requiring power companies to use a set percentage of renewable generation, replaced with a "clean energy standard." Such a "CES" would give utilities credit for replacing coal with natural gas.

They also want tax credits or emission allowances to encourage utilities to replace inefficient coal-fired plants with plants fueled by gas, sometimes called a "bridge fuel credit."

Meanwhile, the coal industry, which won a bounty of allowances in the House climate bill, is worried that what gas wins, coal may lose.

"If gas pushes in bigger, it comes from coal," said Carol Raulston of the National Mining Association. "That's how it's been laid out."

The gas industry has increased efforts to make its case with a national advertising and increased lobbying since the House passed H.R. 2454 last June. The gas industry saw it as tilted toward coal.

Lobbying by the oil and gas industry grew by 24 percent between the second quarter of 2009, when the climate bill passed the House, and the fourth quarter, when Kerry, Graham and Lieberman announced their plans to try to forge a compromise in the Senate.

"We certainly don't support Waxman-Markey as it was originally presented," Bruce Vincent, president of Swift Energy Co. and chairman of the Independent Petroleum Association of America, said at a recent briefing. "Now we understand that some of the work being done with Kerry, Lieberman and Lindsey Graham are making some inroads into get some access offshore. But we don't believe it does enough to support natural gas. Natural gas clearly needs to be a part of any future energy role in America. That needs to be supported and advocated through legislation."

Senior reporter Darren Samuelsohn contributed.

Click here to watch George Solich, president of the Independent Petroleum Association of Mountain States, explain the benefits he sees in natural gas.