CLIMATE:

As Senate trio advances emissions measure, energy-only bill remains a possibility

Details emerged yesterday on a sweeping Senate energy and climate proposal just days after three senior Democrats huddled to discuss alternative ways to tackle the issue later this spring on the floor.

Under pressure to quickly produce a bill, Sens. John Kerry (D-Mass.), Lindsey Graham (R-S.C.) and Joe Lieberman (I-Conn.) yesterday shared an eight-page outline of their draft plan in a closed-door meeting with major industry groups.

According to several sources in the meeting room, the bill will call for greenhouse gas curbs across multiple economic sectors, with a target of reducing emissions 17 percent below 2005 levels by 2020 and 80 percent by 2050. Power plant emissions would be regulated in 2012, with other major industrial sources phased in starting in 2016.

In a bow to industry demands, the senators' proposal would pre-empt U.S. EPA climate regulations under the Clean Air Act and halt dozens of state climate laws and regulations now on the books. Also, only facilities that release 25,000 tons per year of greenhouse gases must participate in the climate program.

Specifics on the Kerry-Graham-Lieberman bill come as Senate Majority Leader Harry Reid (D-Nev.) weighs his options for taking a different route for a springtime floor debate.

On Monday, Sens. Byron Dorgan (D-N.D.) and Jeff Bingaman (D-N.M.) met for about 45 minutes with Reid to plead their case for taking up energy legislation approved last spring by Bingaman's Energy and Natural Resources Committee. That bill (S. 1462 includes a renewable energy standard and offshore oil drilling but no cap on greenhouse gas emissions -- a centerpiece of the Kerry-Graham-Lieberman effort.

Three sources familiar with the meeting said that Reid made no decisions on a floor strategy.

"We have a bill out of the Energy Committee," Reid told reporters Tuesday. "The question is, do we amend that with climate change stuff? Or do we come up with a bill to take care of all that?"

Reid, Bingaman and Dorgan all declined comment on their meeting. Still, both Bingaman and Dorgan said they have not been shy about indicating their preferences.

"Clearly, I've advocated for getting the bill we reported out of the committee up before the Senate," Bingaman said. "I've been advocating that for some time and continue to. But obviously I'm glad to see us do other things as well, if we can."

"I'm in favor of reducing carbon," Dorgan said. "I'm in favor of carbon caps. But I'm also in favor of passing a piece of legislation that actually does reduce carbon and that's already been done on a bipartisan basis out of committee. And it'd just be a shame not to be able to get the full advantages of something that really does reduce carbon."

Dorgan said he would be open to allowing the Kerry-Graham-Lieberman bill on the floor as an amendment. But he disagreed with comments made by Graham that the Energy Committee bill was a "half-assed" measure that cannot muster 60 votes.

"That's not accurate," Dorgan said. "He's not on the committee. The bill came out of the committee on a bipartisan basis. The only reason it may not get 60 votes is if he and others decide to block it because it didn't include something they wanted."

As for Kerry, Graham and Lieberman, the trio are trying to find the sweet spot on a much broader bill that satisfies key industry constituencies and avoids an expensive advertising war. Yesterday, Kerry told the industry groups he hopes to formally introduce the bill in mid-April, with a full outline to be delivered Tuesday during a meeting with a larger group of senators who have been working over the last year on the climate and energy issue.

The senators also hope to send their proposal to EPA and the Congressional Budget Office by the end of next week for a five-to six-week analysis, although the timing on that depends in part on two legislative counsel staffers who are out on maternity leave.

"It's just the logistics of getting the language done," Kerry told reporters. "So I'm not going to tell you exactly. But our target is somewhere toward that period of time or during the break."

The senators collected their eight-page document before the meeting with the trade groups ended, and they declined comment on details as they left the session.

Overall, the bill will include eight titles: Refining, America's Farmers, Consumer Refunds, Clean Energy Innovation, Coal, Natural Gas, Nuclear and Energy Independence, according to sources. And it would set up new nationwide standards for energy efficiency and renewable energy, and include ideas on carbon market regulation crafted by Sens. Maria Cantwell (D-Wash.) and Susan Collins (R-Maine).

Additional layers of certainty for industry come via a "hard price collar" that limits greenhouse gas allowances to between $10 and $30 per ton tagged to inflation, with an increase at a to-be-determined "fixed rate" over time. The legislation would also set aside a "strategic reserve" of 4 billion greenhouse gas credits that could be released into the market to help control price volatility fluctuations.

"We obviously talked some substance," Kerry said. "We went through an outline of things we're thinking about."

The senators' meeting included about a dozen top trade associations, including representatives from the U.S. Chamber of Commerce, Edison Electric Institute and American Petroleum Institute. Several of those officials left the meeting giving the three senators credit for their effort.

"Directionally speaking, the way they're trying to conform and shape this bill I'd suggest is largely in sync with what most people in American industry think is the direction you're going to have to go if you're going to have a successful program," said Bruce Josten, executive vice president for government affairs at the U.S. Chamber of Commerce. "Now there's a lot of ifs, ands and buts, but if you're asking for a broad statement, that's a broad statement."

John Shaw, senior vice president of government affairs at the Portland Cement Association, called the meeting's tone "very positive."

"I think many of the industry sectors are willing to work with the senators to achieve positive public policy results," Shaw said, "but the devil is in the details, and folks are very anxious to see those details."

Kerry will meet today with environmentalists for a briefing on the draft proposal and participate in a conference call with CEOs from the U.S. Climate Action Partnership lobbying group.

Reporter Evan Lehmann contributed.