Sen. Kerry lobbies for climate compromise; actual bill to come

The three senators writing compromise climate legislation are lobbying business groups in hopes of winning their support for the effort. One obstacle: the absence of an actual bill.

Sen. John Kerry (D-Mass.) briefed a group of electric utility executives this week on a broad outline of the plan. Kerry and his cohorts, Sens. Joe Lieberman (I-Conn.) and Lindsey Graham (R-S.C.), have also reached out to Tom Donohue, the president and CEO of the U.S. Chamber of Commerce, who has been among the harshest critics of a climate bill stalled in the Senate.

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Kerry, Graham and Lieberman have worked for weeks to break the impasse and craft a measure to reduce heat-trapping gases that could win centrist support. A key to their effort will be reducing the level of angst among business, given high unemployment levels and the effects that capping carbon dioxide could have on the economy. Supporters say climate legislation could create jobs by spurring growth of a clean energy industry in the United States.

As he tries to sell the legislation, Kerry is de-emphasizing its relation to climate change.

“What we are talking about is a jobs bill. It is not a climate bill. It is a jobs bill, and it is a clean air bill. It is a national security, energy independence bill,” he told reporters in the Capitol this week.

Kerry, Graham and Lieberman appear to have revived climate discussions in the Senate by shifting focus from an “economy-wide” cap-and-trade approach that has been the focus up to this point.

But energy lobbyists said they had yet to see any details of the legislation, raising skepticism the three are near a solution.

A utility executive who was at the briefing this week said Kerry provided a “20,000-foot” perspective of the bill, meaning he spoke in more general terms than specifics.

Kerry reiterated in his talk to executives that he and his partners would use different strategies to reduce emissions in different sectors, and that the bill would be deficit-neutral.

Utilities would be required to hold allowances to cover their emissions and could trade the allowances on an open market as needed. But oil refiners would face a fee based on the carbon content of their fuels instead of a cap — a proposal oil companies had brought to Capitol Hill earlier this year.

Sen. Mary Landrieu (D-La.), a critic of the economy-wide cap-and-trade, told The Hill’s E2 Wire blog last week that she was “generally happy” Kerry, Graham and Lieberman appeared to be moving away from that approach.

Industry criticism softened as well. Jack Gerard, the president and CEO of the American Petroleum Institute, told The Hill that he was “encouraged” by the new direction.

Oil refiners had felt they were treated unfairly by the House bill because they didn’t get enough allowances to cover emissions from their plants and the use of their products. Authors of the bill believed oil refiners could pass on added costs to consumers.

Although the oil industry is more comfortable with the approach sketched out by Kerry, Graham and Lieberman, one lobbyist for an oil refiner said companies were waiting to decide how to lobby on the bill until actual legislation is released, which may be a week or more away.

“It isn’t real until they write something down,” the lobbyist said.

The bill is expected to include new incentives for nuclear power, “clean” coal, and natural gas, and could open new areas offshore to oil drilling.

The lobbyist said Kerry, Graham and Lieberman have indicated to colleagues that their bill would “preempt” state efforts to reduce greenhouse gases. That would likely be controversial, but may be extra inducement to refiners who are opposed to efforts in California and elsewhere to develop a “low carbon fuel standard.”

-- Ben Geman contributed to this report