CLIMATE:

Senate moderates keeping distance from cap-and-trade bill

Senate promoters of a comprehensive climate and energy bill are reaching out to moderate Republicans and Democrats, but they have little to show for it.

The nation's economic troubles and election-year politics are making a signature item on President Obama's domestic agenda a tough sell, despite the optimism expressed by the legislation's leading advocates, Sens. John Kerry (D-Mass.), Lindsey Graham (R-S.C.) and Joe Lieberman (I-Conn.).

"I'm trying to avoid talking to people like ... Senator Kerry and all of the people that are the stalwarts on the [climate bill], because I think we've got other things we've got to finish up before we embark upon that," Sen. Claire McCaskill (D-Mo.) said earlier this month.

Even exchanges of legislative text are not breaking any ice.

Graham asked Republican Lisa Murkowski of Alaska earlier this year if she would write provisions to expand U.S. production of oil and gas -- so long as she also expressed support for capping the nation's greenhouse gas emissions.

Murkowski recently produced a proposal to expand revenue sharing for states that allow drilling off their coasts, modeling the legislation on ideas rejected last spring during an energy bill markup in the Senate Energy and Natural Resources Committee. But the senator's spokesman insisted that she is not ready to play ball on a sweeping energy and climate change package.

"When a colleague comes to Senator Murkowski and asks us what should be in an oil and gas title, that's a no brainer," Murkowski spokesman Robert Dillon said yesterday. "We're going to tell them what we think is important to improve America's energy security."

Dillon explained that Murkowski, the ranking member on the energy committee, also contributed last year when Lieberman sought proposals from Democrats and Republicans on how to boost U.S. nuclear-power production. Still, he insisted, "There's been no agreement. We've not signed onto anything."

Other Republicans whose support is seen as critical to a climate and energy bill are also keeping their distance.

Senate Foreign Relations ranking member Richard Lugar (R-Ind.) said earlier this month that while he has expressed an interest in tackling greenhouse gas emissions in a sector-by-sector fashion, that effort remains "hypothetical." And the Republicans' 2008 presidential nominee, Arizona Sen. John McCain, who once led on the issue alongside Lieberman, is laying low now that he has a conservative challenger in the Aug. 24 Republican primary (E&E Daily, Feb. 10).

Democrats are hesitant too when it comes to jumping into the mix on a comprehensive bill that includes a cap on greenhouse gases. Indiana Sen. Evan Bayh, who yesterday announced plans to retire rather than run this fall for a third term, said in a recent interview that he would prefer a focus on energy-only legislation.

"I think this is a very difficult time, given the state of the economy," Bayh said. "And the lack of a firm commitment on the part of other nations. That makes it more difficult. That's not to say progress can't be made. If I were advising the president, I would focus on energy security, job creation in the energy space that would have the additional advantage of helping to address carbon emissions but do it an economically friendly way."

And McCaskill said that while she would like to wean Missouri off coal, she is also concerned about creating a new carbon market that might be gamed.

"It's hard for many of us to get excited about a new derivative market until we figure out what we do with the one we have," she said. "A lot of this is going to hinge on what financial-sector reforms are made, and whether or not people feel comfortable about whether we're not creating a new underbelly of wealth around a carbon market."

The Senate trio working at the center of the debate are keeping a positive tone. They argue that trying to find a sweet spot capable of winning 60 votes was already difficult well before the political earthquake last month when Republican Scott Brown of Massachusetts won the special election to replace the late Sen. Ted Kennedy (D).

In interviews, Kerry, Graham and Lieberman have urged patience in trying to read into the fate of their closed-door negotiations. Each insisted the talks are fluid, and they do not want to go public with any legislative language until they secure a bigger coalition.

"I think the worst thing we could do is roll out ideas that are not well vetted," Graham said. "I've learned a lot from immigration. I've learned a lot from health care. And I know y'all want to know more. And quite frankly, what I'm trying to do is make sure people feel good about it and we've thought this thing through. Because the attacks will come."

'Chicken and egg problem'

Graham's efforts are being watched the closest given he is one of just two Republicans -- the other being Susan Collins of Maine -- to publicly engage with Democrats on the specifics of climate change legislation. Several sources say the White House has invested heaviest in Graham given the need for bipartisan consensus on the issue.

Obama's top political adviser, David Axelrod, signaled the hands-off approach that the administration is taking during an interview with C-SPAN earlier this month.

"In terms of cap and trade, there are efforts ongoing in the United States Senate between Republicans and Democrats to come up with an overall energy bill that would help drive this clean energy investment, this clean energy economy," Axelrod said. "If a consensus can be reached, we want to support that. But this is clearly an issue that Republicans and Democrats are going to have to do together. It's not something that one party or the other can do."

For Graham, many say that means he has a green light to be a bit of everything to everybody.

Last month, for example, Graham co-sponsored a controversial proposal authored by Murkowski aimed at halting U.S. EPA's efforts to limit carbon emissions. Graham said he would only vote for Murkowski's measure if it came as part of a broader bill that would cap greenhouse gases. And Graham also signed on to legislation from Sen. Tom Carper (D-Del.) that deals with conventional air pollution from power plants. Also on the bill: Republicans Lamar Alexander of Tennessee and Judd Gregg of New Hampshire and Collins.

As he drafts language with Kerry and Lieberman, Graham said his message to other Republican senators is pretty straightforward: "We like your ideas, but we want your vote. If we make accommodations, it's to get people to sign on to the bill."

But hurdles remain.

Moderates -- especially Republicans -- face the question of whether there is any incentive in teaming up with Democrats in the climate debate considering the issue's status at the very bottom of a recent poll by the Pew Research Center for the People and the Press. There is also the conservative base already riled up over the simple mention of cap-and-trade legislation.

"What's in it for a Republican to roll around in that?" asked an industry lobbyist working on the issue.

McCain's shifting stance on climate change is already being questioned by former Rep. J.D. Hayworth, a Republican challenger in Arizona's Aug. 24 primary. And while Murkowski does not have a Republican opponent in her primary, there is still the prospect a conservative challenger could emerge by the state's June 1 filing deadline.

David Jenkins, the government affairs director at Republicans for Environmental Protection, said he is worried that election-year dynamics could curtail GOP participation in the climate and energy debate. "It does put a little bit of pressure on them to not work with Democrats," he said. "In this case, that's a really big mistake."

Murkowski said she is well aware that Republicans could be painted as obstructionists too. She said there is still room to work with Democrats on a bill that both parties could claim credit for. "I think that's the way you need to look at this," she said. "Is this a win for the country?"

The Alaskan also praised Graham for trying to find common ground on the energy and climate debate but added that she is a long way from signing on as a co-sponsor.

"It's one thing to talk to your colleagues and say we need a robust nuclear title, we need more domestic production, and we need a price on carbon," she said. "Is that something you could work with? Absolutely. Let's talk. But let's get into the details of it. Because my domestic production piece, ANWR, might be very different than what Susan Collins' domestic production piece might look like."

"It's important to get people focused on these broad concepts," Murkowski added. "And then try to figure out what it's going to look like. And it may be that the devil in the details is what kills the whole thing."

Off the Hill, environmentalists urge caution against reading too deeply into the lack of details emerging from the Kerry, Graham and Lieberman effort. But they too are getting antsy about the prospects for the bill as they watch the legislative calendar shrink ahead of the November midterm elections.

"We have a little bit of a 'chicken and egg' problem," said John Coequyt of the Sierra Club. "No one wants to step forward because they're nervous nothing is going to happen. And they're not going to get out on a limb for nothing. At the same, while everyone is feeling that way, it looks like there's no progress."