Three senators at the center of the debate over cap and trade’s place in energy legislation (left to right): Graham, Kerry, Liebeman. (image: mnn.com)

Key Senate Democrats say they will support an existing energy bill that does not include a cap and trade provision, and are trying to convince their colleagues to do the same, an article on the website MotherJones.com reported on Tuesday. Buzz about a climate change of heart on the part of the Democrats grew louder last week, when the media reported that Sens. John Kerry (D-Mass.), Joseph Lieberman (I-Conn.), and Lindsey Graham (R-S.C.), who are trying to win bipartisan support for their own compromise energy and climate legislation in the Senate, were planning to do away with cap and trade altogether. The two anti-cap and trade movements represent a larger trend in the Democratic caucus: the perception that dropping cap and trade (or any carbon dioxide emissions limits) from climate legislation is the only way to get it passed.

Possible elimination of the cap and trade provision from the American Clean Energy Leadership Act (ACELA), which was approved by the Senate Energy and Natural Resources Committee last June, raises several concerns. For starters, doing away with a carbon cap may spell doom for an international climate treaty. Other big carbon emitters, most notably China, want to see the U.S. make meaningful reductions in carbon emissions before they commit to their own reductions. In November, China agreed to curb its carbon intensity 40–45 percent from 2005 levels by 2020, although it does not want these emissions targets to be legally binding.

Another potential problem with the bill, according to environmentalists, is that it could increase, rather than decrease, carbon emissions by making too many concessions to big energy interests. The bill would lift a ban on drilling on the eastern Gulf of Mexico, just 45 miles off the Florida coast. In addition, an expansion of federal authority over the placement of power lines called for in the bill could increase emissions, said David Lashof, director of the climate center at the National Resources Defense Council. He explained that more electricity infrastructure without a corresponding cap on carbon would make it easier to bring new coal plants onto the grid and increase output at existing plants.

ACELA also contains few provisions for clean, renewable energy. Although it requires utilities to produce 15 percent of power from renewable resources within the next 11 years, solar and wind advocates say that renewable electricity standard is not ambitious enough Grist.com reported.

Although the bill would establish an agency called the Clean Energy Deployment Administration, or CEDA, it also would empower the Department of Energy to distribute an unlimited number of loan guarantees to underwrite the construction of nuclear power plants without congressional review. According to the Congressional Budget Office, the chance of default on these loans is at least 50 percent, so the bill could wind up costing taxpayers billions of dollars.

Those who support ACELA include Democrats Jim Webb (Va.), Mary Landrieu (La.), Evan Bayh (Ind.), Ben Nelson (Neb.), Kent Conrad (N.D.), Byron Dorgan (N.D.), Mark Pryor (Ark.), and Blanche Lincoln (Ark.). Republicans Lisa Murkowski (Alaska), Sam Brownback (Kan.), Bob Corker (Tenn.), and Jeff Sessions (Ala.), who voted the bill out of committee, could also come on board.
Supporters of the bill argue that getting the measure passed is more politically feasible than getting a cap and trade provision thorough the Senate. In an omission that cold signify the White House’s quiet assent to the elimination of cap and trade from climate legislation, President Obama did not refer to a cap and trade system or any plans to cut greenhouse gas emissions in last week’s State of the Union speech.

Obama did, however, praise the House of Representatives for passing the American Clean Energy and Security Act (ACES), also known as the Waxman-Markey bill, which includes a cap and trade provision. He also urged the Senate to make a bipartisan effort to do the same.

ACES calls for the reduction of greenhouse gas emissions in the US to 17 percent below 2005 levels by 2020 and 83 percent below 2005 levels by 2050. It also requires utilities to generate an increasing amount of power from renewable sources and reduce dependence on foreign oil.

The Clean Energy Jobs and American Power Act (CEJAPA), sponsored by Sens. Kerry and Barbara Boxer (D-Calif.) and a companion bill to ACELA, would begin with the same 3 percent cut in carbon emissions by 2012 as ACES, but would require a sharper cut of 20 percent by 2020. Kerry, Lieberman, and Graham have proposed cutting U.S. greenhouse gas emissions by 2020 by about 17 percent of 2005 levels, the same goal put forth in the Waxman-Markey bill.

Both ACES and CEJAPA would establish a system of carbon credits, in which regulated industries would have to acquire carbon permits. However, the Waxman-Markey bill would establish a relatively free carbon market, allowing emitters to purchase carbon credits as needed, while the Boxer-Kerry measure would try to control costs to polluting industries by capping the price of credits at $28 per unit. Kerry, Lieberman, and Graham initially pledged continued support to the concept of a cap and trade system, although the senators said that they do not support the name “cap and trade.” Take a look at this comparison of the various climate bills in Congress posted in October of last year to get a more detailed description of each piece of legislation.

As cap and trade loses favor in Congress and the chances of passing comprehensive climate and energy legislation appear as bleak as ever, the Natural Resources Defense Council has stepped up efforts to force legislative action. The NRDC’s Action Fund this week launched a web-based video in which Leonardo DiCaprio and a host of Hollywood stars, with Cornell West of Princeton University thrown in the mix, exhort Americans to urge their senators to support comprehensive clean energy and climate legislation.

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The campaign uses online tools such as social networking, blogs, and e-mail to tell the Senate that the country needs legislation that will reduce carbon pollution and create clean energy jobs. It appears that the NRDC believes that grassroots action by green-minded citizens reinforced by major star power could turn around the fate of climate legislation. However, the way the political winds are currently blowing in Washington, it would take no less than a hurricane of constituent pressure to change the minds of senators who have taken up firm positions against the enactment of any greenhouse emissions reduction laws any time soon.

South Carolina Senator Lindsey Graham. (image: ingodisourtrust.wordpress.com)

The Washington Post reported that the senators who were attempting to draft a second bill to cap greenhouse gas emissions released a “framework” of the legislation on Thursday. However, the legislators offered few details about their ideas, and said that they were open to negotiation.

When UN Secretary General Ban Ki-moon met with a bipartisan group of senators at the US Capitol on Nov. 10, he urged the Senate to act on climate change before the UN climate change summit. Although Ban acknowledged that the Senate was unlikely to move that quickly, he urged the Senate to draft principles to establish pollution reduction goals, because such a framework would be a sign of commitment to reducing carbon emissions on the part of the US.

The nascent bill, authored by Sens. John Kerry (D-Mass.), Joseph Lieberman (I-Conn.), and Lindsey Graham (R-S.C.), is intended to send the message to delegates at the UN climate talks in Copenhagen that “the movement for climate change legislation in the United States Senate is alive and well,” Lieberman said at Thursday’s press conference announcing the framework.

The senators proposed cutting U.S. greenhouse gas emissions by 2020 by about 17 percent of 2005 levels, the same goal put forth in the Waxman-Markey bill passed by the House and articulated by President Obama last week. In addition, although the senators said that they do not support the name “cap and trade,” they pledged continued support to the concept of a cap and trade system, in which regulated industries could purchase and trade carbon credits as needed. They also said they support expanded offshore drilling for oil and natural gas, more nuclear power plants, and more funding for research to reduce coal plant emissions.

The ideas proposed by Kerry, Lieberman, and Graham last week have similarities and differences to those in the Kerry-Boxer bill, which went before the Senate’s Environmental and Public Works, Finance, and Energy and Natural Resources committees last month. Although both bills require reductions in greenhouse gas emissions, the Kerry-Boxer bill requires an emission reduction of 20 percent, not 17 percent, by 2020. However, some legislators, chief among them Sen. Max Baucus (D-Mont.), argue that 20 percent is too aggressive.

Although Kerry-Boxer itself does not contain provisions for nuclear power, the American Clean Energy Leadership Act (ACELA), a bill written by the Senate’s Energy Committee in June as a companion to the bill, does contain such provisions. Democratic support of nuclear energy is largely seen as a compromise for Republican support of carbon trading and emissions caps.

Environmental groups showed mixed reactions to the Kerry-Lieberman-Graham proposal. The ocean preservation organization Oceana said an increase in offshore drilling could create a higher risk of spills, although other environmental groups said an agreement that included a key Republican was a step forward.

Kerry said at Thursday’s news conference that the three sponsors would have to discuss their framework and ideas with Senate committee chairmen, and that he did not think a bill would be voted on until the spring.

Sunoco CEO Elsenhan (left) objects to the cap and trade measures proposed by Rep. Markey. (image: engineering.rice.edu and upi.com)

Sunoco CEO Lynn Elsenhan and Rep. Edward Markey (D-Mass.) exchanged words during a session at this week’s Wall Street Journal CEO Council in Washington, D.C., the Journal reported on Wednesday. As shown in the video below, Elsenhan said that the American Clean Energy and Security Act, which is sponsored by Rep. Markey and Rep. Henry Waxman (D-Calif.), did not establish a level playing field and clearly picked US oil refiners as “losers.”

She went on to say that the cap and trade measures in the ACES bill, also known as the Waxman-Markey bill, did not resemble the European measure they were modeled after. “Europeans got their cap and trade allowances for nothing,” she said, “and they are not responsible for the emissions of their customers.” They are only responsible for the own stationary emissions.

Elsenhan said:

I am very willing to have all of my stationary emissions be paid for by cap and trade” and be more energy efficient, but asking US refiners to be responsible for their customers’ emissions puts them at “great peril” and makes their ability to cap and trade more important than their ability to refine crude into products and deliver those products to customers.

In response, Markey said that the bill contained $2.5 billion to “deal with” the additional costs to the refining industry, and that this provision is still subject to negotiation as the bill moves through the Senate. He mentioned that the bill also contained a protective border tariff that is triggered in 2020 to protect energy-intensive, trade-vulnerable industries from exploitation by China, India, and other countries that are not engaging in the same reductions in greenhouse gas emissions as the U.S.

Markey continued by saying that these provisions to protect the US oil industry sent a “real signal” to the world—“We are not going to stand by and watch our steel, aluminum, cement, and other energy-intensive industries be exploited by us moving along with the Europeans.”

The Waxman-Markey bill has been a lightning rod for controversy since it narrowly (219-212) passed in the House on June 26, 2009. The cap and trade provisions of the bill, and its impact on both refiners and consumers alike, are particularly controversial.

However, the debate between Elsenhan and Markey may be moot. Nuclear energy has emerged as a new focus of climate change legislation. Steven Zweig wrote on HeatingOil.com on Oct. 9 that several key Democrats in the Senate, including Sens. John Kerry (D-Mass.) and Joseph Lieberman (I-Conn.) may support nuclear power in exchange for Republican support of cap and trade. As Zwieg wrote on HeatingOil.com on Tuesday, to get climate change legislation passed in the full Senate, Democrats must bargain to gain support of a “critical mass” of Republicans. Such Congressional backroom maneuvering should ensure that any bill that does make it to the president’s desk will bear little resemblance to Waxman-Markey.

Senator Max Baucus and UN Secretary General Ban Ki-moon. (image: moderateinthemiddle.wordpress.com and princeton.edu)

Senate finance committee chairman Max Baucus (D-Mont.) said on Tuesday that he will work to expedite what he termed “meaningful” climate change legislation that can gain enough congressional support to become law, the Wall Street Journal reported. Baucus made his comments during his opening statement at a finance committee hearing. He added that the US must protect home industries by devising a plan to prevent “carbon leakage” should American manufacturing shift to countries that lack effective climate change programs.

Also on Tuesday, UN Secretary General Ban Ki-moon met with a bipartisan group of senators at the US Capitol, according to Politico. At the meeting with Sens. Richard Lugar (R-Ind.), John Kerry (D-Mass.), and Joseph Lieberman (I-Conn.), Ban urged the Senate to act on climate change before the UN climate change summit next month in Copenhagen. He acknowledged that the Senate was unlikely to move that quickly, but he urged the Senate to draft principles to establish pollution reduction goals, including targets for greenhouse gas reductions.

Such a framework would send a strong political message and be a sign of commitment to reducing carbon emissions on the part of the US, said Ban. “That will be quite important…for us to get this negotiation started.” Ban said he expects the December summit to result in a political agreement signed by major world leaders, as opposed to a legally binding treaty to reduce global emissions.

Sens. Kerry, Lieberman, Barbara Boxer (D-Calif.), and Lindsey Graham (R-S.C.) are working to draft bipartisan climate legislation, and expect to release a framework for such legislation before Copenhagen. Lieberman said that these principles will be sent to Senate Majority Leader Harry Reid (D-Nev.) for review by the Congressional Budget Office and the US Environmental Protection Agency.

The Senate Environment and Public Works committee has actually passed part of the bill authored by Sens. Kerry and Boxer, and at least four other committees may put the legislation on their respective agendas.

The Washington Post reported that, following Tuesday’s meeting with Ban, Lugar said he did not see “any bill on the table that I can support. We really have to start from scratch.” Lugar explained that his constituents are currently more concerned about the state of the economy, and that he did not see the Kerry-Boxer bill as politically viable.

The Obama administration wanted the Senate to pass climate legislation before the Copenhagen meeting begins on Dec. 7. However, the Senate has delayed final action on the climate change bill until next year, and any agreement about establishing a policy—carbon tariffs—has drawn the ire of emerging nations such as China and India, as well as the White House, Europe, and the UN.

Since the Environment and Public Works committee passed a draft of the bill over a Republican boycott last week, it is heading to simultaneous hearings before the Finance committee and the Energy and Natural Resources committee, wrote HeatingOil.com’s Steven Zweig on Tuesday. He cited concerns on the part of senators from both parties about the cost of reducing carbon emissions and the distribution of that cost.