The Business Roundtable, a group of CEOs whose companies pay roughly half of the country's corporate income taxes, commended the House for passing its historic climate bill but called for Congress to pass a final version that includes a more diversified portfolio of domestic energy sources for the future.

"The bill ignores the role that oil and natural gas must play in the transition to a low-carbon future, as well as nuclear energy's central role in reducing America's carbon footprint," said John Castellani, president of the roundtable.

The business group issued a report last week cautioning that unless the government invests heavily in energy technology and promotes domestic oil and gas, a price on carbon that would be imposed by the House bill could stunt the economy. As Castellani put it: "There's no one clear path: you have to do all of the technologies, and then you have to enable the technologies to get in the system."

The report also calls for renewable power, carbon capture and storage, new vehicle technology, energy and building efficiency, and a smart grid.

The Business Roundtable's report said each option faces unique challenges that the government could ease with targeted policies. It proposed boosting nuclear power, for example, with federal loan guarantees for at least 25 power plants and creating a program outside of the Energy Department for managing nuclear waste.

The reaction of other companies and business groups appeared to depend on where they stand in the energy spectrum. Chicago-based Exelon Corp., the nation's largest nuclear-powered utility, complimented the House for taking "bold and decisive action." A price on carbon, imposed by the House bill, will benefit nuclear power plants, which do not create CO2 emissions.

Florida-based FPL Group Inc., the nation's top producer of wind and solar energy, said "while no legislation is perfect, this bill is a critical step in the right direction."

The American Petroleum Institute, which represents the oil and gas industry, asserted in a statement that the House bill "could add substantially to the cost of fuels for consumers and businesses." Jack Gerard, president of API said the group hopes the Senate can produce a "more balanced approach to transportation fuels and natural gas."

The National Mining Association, which represents coal producers, asserted the House bill "will affect every aspect of the American economy, harming our ability to compete in the world and provide secure and affordable energy to American consumers and businesses."

The National Association of Regulatory Utility Commissioners, which regulate most of the nation's electricity distribution system, said its members were "deeply concerned" that the bill restricts state regulators from distributing free allowances in ways that would cushion the blow on utilities and consumers.

Continuing role for oil, gas and nuclear

The Business Roundtable appears to be preparing middle ground in this accelerating debate that will give some comfort to its far-flung membership. The business group includes General Electric Co., General Motors Corp., American Electric Power Co. Inc., and coal producer Arch Coal Inc.

It also includes major oil companies, including Exxon Mobil Corp., which withdrew funding for several climate change-denying think tanks last year.

The Business Roundtable's report asserts that expanding domestic oil and gas drilling would play an important role in any climate policy: keeping down energy costs.

If the government priced carbon without supporting low-carbon technology, energy costs would rise, the report said. By 2050, that could reduce CO2 up to 44 percent -- but GDP would be 2 percent less than if no carbon price was ever adopted.

But aggressive low-carbon policies and expanded oil and gas drilling in the United States, according to the report's model, would drop GDP less than 1 percent and emissions up to 62 percent.

The report's projections, Castellani said, were based on data from the business group's members -- some of the very companies that are making these technologies today.

An 'all of the above' strategy

Castellani explained how it is that increased fossil-fuel drilling would help cut emissions. While new technologies develop, oil, gas and nuclear continue to play a role: "They don't disappear tomorrow," he said.

As long as they do not disappear, he argued, energy costs won't race out of control -- and the economy won't derail.

Whether oil and gas companies can play a role in the carbon-constrained world has been a point of political contention. During the presidential campaign last fall, the Republican candidate, Sen. John McCain of Arizona, endorsed a cap-and-trade climate bill as part of an "all of the above" energy policy that would include increased oil and gas drilling.

For those who see a "transition" away from fossil fuels rather than a cold-turkey abandonment of them, the argument has some appeal.

William Whitesell, director of policy research at the Center for Clean Air Policy, said that with a carbon bill, the economy would probably begin to substitute gas for oil, since it causes fewer emissions.

That would be a time to set up incentives for low-carbon energy sources, which "may take a while for those economic incentives to come in and replace existing use of fossil fuel." But "eventually fossil fuel use would have to fall and we need to switch to alternative methods of generating energy," he said.

Click here to read the study.