CLIMATE:

Bipartisan Senate group wants cap-and-trade bill to boost natural gas

A bipartisan group of nine senators is urging Environment and Public Works Chairwoman Barbara Boxer (D-Calif.) to include a suite of provisions in her upcoming climate bill that would boost natural gas production and use.

Boxer plans to introduce her cap-and-trade bill to curb greenhouse gas emissions on Wednesday, Sept. 30.

The Sept. 23 letter cites the lower greenhouse gas emissions that come from natural gas than other fossil fuels, noting that it can serve as a "bridge fuel as we transition to the new energy economy."

"Any Senate energy and climate bill should provide statutory guidance to harness this important resource and stimulate and support even more activity in this sector of our nation's diverse energy portfolio," states the letter from Sens. Michael Bennett (D-Colo.), Lisa Murkowski (R-Alaska), Mark Udall (D-Colo.), Arlen Specter (D-Pa.), Tom Udall (D-N.M.), Mary Landrieu (D-La.), David Vitter (R-La.), Sam Brownback (R-Kan.) and Mark Begich (D-Alaska).

Natural gas provides a fifth of U.S. electric power and also powers some vehicles, such as municipal buses. Its lower carbon emissions -- along with new U.S. supplies available through increased shale gas development -- are prompting calls to expand the fuel's role in climate policy.

The letter calls for incentives to increase power sector usage and expand use in heavy-duty and fleet vehicles. It also says natural gas plants should be eligible for carbon capture and storage incentives that the House-passed climate bill provides for coal plants but adds that this should be done in a way that does not "diminish" the coal incentives.

The lawmakers say the climate bill should steer clear of removing tax breaks for natural gas producers. President Obama's congressional budget request calls for ending billions of dollars in tax breaks for oil and gas producers. The letter calls for maintaining the percentage depletion credit and deductions for so-called intangible drilling cost, in particular.

Tax policy falls under the Finance Committee, and the letter was sent to its chairman, Max Baucus (D-Mont.), and other committee leaders with a hand in energy and climate policy.

The letter also calls for a change in H.R. 2454, the climate bill approved by the House in late June. It says fugitive emissions from production and pipeline leakage of uncombusted gas should not be subject that bill's performance standards for uncapped sources of greenhouse gases.

Instead, the senators say these emissions should be included as offsets when captured, noting "fugitive emissions, when captured, have significant greenhouse gas reduction benefits" and should be on the list of eligible offsets.

The letter also seeks several other provisions aimed at boosting natural gas.

Click here to read the letter.