Sen. John Kerry said yesterday he will have the support of three major oil companies and the leading trade group for electric utilities when he releases comprehensive climate and energy legislation Monday.
The Massachusetts Democrat predicted the endorsements during a conference call with the business group "We Can Lead," according to Damon Moglen, director of the Greenpeace USA Global Warming campaign and a participant on the call.
Kerry did not name the oil companies, though he has been working closely over the past few months with Shell Oil Co., BP America and ConocoPhillips. He also said the climate bill he has written with Sens. Lindsey Graham (R-S.C.) and Joe Lieberman (I-Conn.) would be backed by the Edison Electric Institute, the association that represents investor-owned utilities.
Officials at Shell and EEI declined to confirm Kerry's comments on where they stand on the energy and climate legislation.
"Haven't seen the bill," Marnie Funk, Shell's vice president of communications, said last night in an e-mail.
"We are waiting to see language today," said Brian Wolff, EEI's vice president for communications and government affairs. Wolff yesterday had accompanied EEI President Tom Kuhn to a meeting in Kerry's Capitol office, and they left saying they were still in discussions with their member companies.
During the call, Kerry also said he expected other critical industry players to remain silent, noting an agreement with the American Petroleum Institute to hold off in running attack ads on the legislation.
Cathy Landry, a spokeswoman for API, said her trade group has never run ads critical of the Senate legislation, only ads questioning President Obama's budget proposal that the group said would increase taxes $80 billion on the oil and gas industry.
"We have NO STANCE on K-G-L at this time," she wrote in an e-mail, using the initials of the Senate bill sponsors' last names. "We are neutral. We need to see the legislative language and an economic/energy analysis before we take a position."
Kerry yesterday also outlined several other key details of the climate bill, including plans to mollify swing-vote Democrats by starting emission restrictions in 2013 for power companies and then bringing in energy-intensive manufacturers four years later. The senator emphasized the "cushion" for the manufacturers and the "enormous lead time" for meeting the program's requirements, Moglen said.
Other key features of the legislation, obtained from the call and through independent sources, include an agreement on how to tackle transportation fuels, which contribute about a third of the nations' annual emissions.
The Kerry-Graham-Lieberman bill will require oil companies to purchase allowances that will be immediately retired when they meet their compliance obligations. The allowances won't be auctioned, rather the price will be fixed based on the previous quarter's average allowance price. Companies also won't be allowed to trade credits among themselves, a Senate aide close to the process said today.
The latest approach on transportation fuels marks a departure from an earlier idea to set up a "linked fee" on oil companies, with the revenue funneled toward curbing the budget deficit, as well as construction and repairs of new highways and other infrastructure.
Critics pounced on the idea as an increase in the gasoline tax, which the bill's sponsors and the White House repeatedly denied.
Graham yesterday described negotiations on the transportation sector as a "problem area for us."
"It's one thing for the oil and gas companies to be OK," Graham said. "But what if you're actually driving a truck and that's the way you make a living. How does it affect you?"
For electric utilities, Kerry, Graham and Lieberman appear to have settled on a plan that would send two-thirds of the revenue generated from auctioning off pollution allowances to be returned to consumers through local distribution companies. They are also leaning toward a change in the House-passed climate bill's formula for distributing emission allowances 50-50 between companies based on their historic emission levels and retail sales.
In a bid to satisfy Senate Democrats from the Midwest and Great Plains who say the House bill created regional inequities unfavorable to coal, Kerry, Graham and Lieberman are leaning toward a 75-25 split in favor of free allowances for historic emissions.
EEI is in a bind over the allocation formula change, with members that have larger coal portfolios pushing for a change, while companies that are more reliant on gas and nuclear energy supporting keeping the House bill intact.
Yet, in a sign of cooling tensions, Ralph Izzo, the president, chairman and CEO of New Jersey-based Public Service Enterprise Group Inc., a company with large shares of gas and nuclear power, said today he is open to the different formula.
"If a 75/25 split gets the bill enacted, I would be supportive of that," Izzo said. "My fear is there is a small handful of very vocal companies whose aspirations are to see no bill at all, and we need to just understand when is enough, enough. When are we going to say to folks, 'You cannot get to continue to emit this stuff, you cannot continue to delay the inevitable.'"
Kerry also said the legislation would pre-empt states and EPA's ability to regulate greenhouse gases under the Clean Air Act, with U.S. EPA in charge of monitoring and enforcing the law.
On nuclear power, Kerry said the bill would offer federal loan guarantees to help construct 12 new nuclear power plants. It also will have $10 billion for the coal industry, with the aim on carbon capture and storage technology.
Kerry's office declined comment today, saying it won't be talking about specifics until Monday.
Lieberman yesterday said not all of the bill will be 100 percent complete when it is rolled out Monday. "There will be maybe a couple of placeholders, but for the most part, everything will be in there," he said.
Exxon Mobil Corp. spokesman Alan Jeffers said he won't comment until he has seen details of the legislation. Officials at BP and ConocoPhillips could not be reached for comment.
Reporter Katherine Ling contributed.
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