CLIMATE:

Senate road map caters to nuclear, offshore drilling proponents

Architects of Senate energy and climate legislation reiterated their support for nuclear power and offshore drilling yesterday in an effort to garner the support of moderate Democrats and Republicans.

The framework from Sens. John Kerry (D-Mass.), Lindsey Graham (R-S.C.) and Joe Lieberman (I-Conn.) offers only a rough sketch of what their bill will ultimately entail, but it touts plenty of industry incentives aimed at getting closer to the 60 votes necessary to defeat a filibuster (E&ENews PM, Dec. 10).

"This is a package with a lot of new agreements in it and new shared vision about how we get over 60 votes," Lieberman said.

The senators' blueprint calls nuclear power an "essential component" of the strategy to reduce greenhouse gas emissions. They vowed to make it easier to finance the construction of new nuclear plants and to improve the efficiency of the licensing process for traditional and small modular reactors.

Offshore drilling would also see new incentives under the bill. The senators said their legislation would seek to boost the supply of domestically produced oil and natural gas both on land and offshore. "We will do so in a way that sends money back to the states that opt to drill and also provides new federal government revenues to advance climate goals," the framework states.

"Some people who were leery about nuclear power are committing here to a very robust nuclear power title," Lieberman said. "Some people before who haven't been very eager to support offshore drilling were saying, 'You know, we've got to do that in this combined bill, and we've got to share some of the revenues with the states.'

"And on the other side, some of our colleagues have been reluctant to support an exact cap on carbon reductions, in a near term and to support a market-based system to get to it are committing now to do that," Lieberman added.

Steve Kerekes, spokesman for the Nuclear Energy Institute, said the trio's proposal looks good "from the conceptual level."

"Obviously, we will strive to work with their offices in pursuit of provisions that help achieve construction of new nuclear energy facilities at the scale needed to make a difference in meeting rising electricity demand while reducing greenhouse gas emissions," Kerekes said.

Nuclear watchdog groups questioned the framework. Ed Lyman, senior scientist at the Union of Concerned Scientists, said his group would oppose any attempt to promote the development of commercial reprocessing plants. UCS also opposes weakening or arbitrarily accelerating Nuclear Regulatory Commission procedures for licensing new reactors and unlimited loan guarantees or other subsidies for new nuclear plants, "at the expense of cleaner and cheaper renewable technologies," he said.

The offshore drilling provisions also prompted criticism from environmental groups.

"Revenue sharing on [the outer continental shelf] means creating incentives for states to authorize drilling and it becomes a race to the bottom," said Sierra Club chief climate counsel David Bookbinder.

Graham has said the senators should examine drilling provisions endorsed by the bipartisan "Gang of 10" -- which later grew to 20 -- last year. That plan called for shrinking the no-leasing buffer in the eastern Gulf of Mexico to 50 miles. It would also allow drilling greater than 50 miles off the coasts of Virginia, North and South Carolina, and Georgia if those states allowed it (E&E Daily, Oct. 9).

The Energy and Natural Resources Committee passed an energy bill (S. 1462) this summer that would scale back the no-leasing area in the eastern Gulf of Mexico by allowing development as close as 45 miles from Florida's gulf shores and closer in a region called the Destin Dome. Parts of that bill are expected to be folded in to the Senate energy and climate package next spring.

Coal

Kerry, Graham and Lieberman also vowed to ensure coal's future as part of the energy mix.

"We will commit significant resources to the rapid development and deployment of clean coal technology, and dedicated support for early deployment of carbon capture and sequestration," the framework says.

Kerry pointed to an op-ed written last week by Sen. Robert Byrd -- in which the West Virginia Democrat called on his state's coal industry to take a more constructive role in addressing climate change -- as a substantial shift in the global warming debate (E&ENews PM, Dec. 3).

"When Robert Byrd comes on and says we gotta do this -- he was the author of Byrd-Hagel, which basically sounded the death knell of Kyoto," Kerry said. "So he now says we have to do this. I believe there's something profoundly different happening. And more and more colleagues are sort of not yet there, but boy are they noticing and trying to figure out what's going on."

EPA, state pre-emption

The senators also outlined a need for pre-empting U.S. EPA climate regulations after the agency this week issued its final endangerment determination, which declares that greenhouse gases threaten public health and welfare. The finding sets the stage for broad federal regulations of the heat-trapping emissions.

"By failing to legislate, Congress is ceding the policy reins to the EPA and ignoring our responsibility to our constituents," the framework states. The senators said they want to "strike a sensible balance and determine the appropriate way to provide regulatory predictability." The document also says that it is imperative to have a meaningful federal emission control system to offer businesses regulatory certainty and to ensure uniformity across states and regions.

Like the Obama administration and the House-passed energy and climate bill (H.R. 2454), the senators are calling for a greenhouse gas reduction target of 17 percent below 2005 emissions levels by 2020 and a long-term reduction target of 80 percent below 2005 levels.

Kerry promised to tread cautiously on the EPA pre-emption question. "We're going to look very carefully at that, but that has to be very carefully structured because you don't want to take away a pre-emption and wind up not having achieved the job and then there's nobody there to try to enforce on the back end," Kerry said.

Still, Frank O'Donnell, president of the advocacy group Clean Air Watch, blasted the compromise for its "attack on EPA's current Clean Air Act authority."

And Bill Becker, executive director of the National Association of Clean Air Agencies, said the language indicated that the senators seek to preclude states from setting more ambitious emissions reduction targets than the federal government.

Some industry groups are hopeful that a federal climate program will eliminate a patchwork of state and regional regulatory programs, while Becker and others have cautioned against language that could handcuff state and regional innovation.

"We have to question whether we're better off with no legislation -- which retains existing state and local authorities and EPA's regulatory response under the Clean Air Act -- or with a legislative proposal like this that will be a weakened compromise that appears to pre-empt state and local authorities," Becker said.

The senators also outlined a number of other priorities for their legislation, including:

  • Support for companies to help them meet their compliance obligations while containing consumers' energy prices. They said they are considering a number of mechanisms, including a price collar and strategic reserve to moderate carbon prices and prevent extreme market volatility.
  • Assistance to manufacturers to avoid "carbon leakage," the fear that if the United States takes action on climate change, the jobs and emissions will merely be transferred to other countries with less stringent regulations.
  • Incentives for farmers to reduce their carbon emissions, including "significant amounts of real, monitored and verified domestic and international offsets." Emissions from agriculture will not be regulated.
  • Stringent carbon market oversight with real-time transparency and strong risk controls and quality controls.
  • Trade measures compatible with U.S. obligations under the World Trade Organization to protect so-called energy intensive trade exposed industries from imports from other countries that do not adhere to emissions-cutting measures.

Reporters Katherine Ling and Noelle Straub contributed.

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