Journal, Post Examine Failure of Kerry-Lieberman GHG Bill

The Wall Street Journal and the Washington Post, in editorials published today, focused on climate legislation. The Journal said the failure of the Senate to pass the Kerry-Lieberman legislation marked a "landmark defeat" for the green lobby and Senate Majority Leader Harry Reid, D-Nev. According to the Journal, the "bill went down for lack of Democratic votes, in particular those from Midwest coal and manufacturing states. Voters in those states have figured out that cap and tax is a redistributionist exercise from the carbon-dependent heartland to the richer coasts."

The Journal said cap and trade, at "enormous economic cost, would do little to reduce global carbon emissions. To the extent that it reduces growth, it would make the world less able to cope with the consequences if temperatures do rise. The richer the world, the more resources the world will have to adapt and ameliorate bad effects."

The Washington Post found irony in the "death of climate change legislation" because of the two government reports released shortly after Reid opted not to submit Kerry-Lieberman to a vote. The studies "underscore the overwhelming scientific case for global warming--and go out of the way to repudiate skeptics." After mentioning details from the reports, the Post said that many "climate-change skeptics will simply dismiss these reports as more evidence of a sprawling conspiracy instead of what they really are: yet more affirmation of the risks humanity runs if it continues to pump carbon into the atmosphere."

Sens. Lieberman, Kerry Inching Toward Utility-Only Climate Bill

Sens. Joseph I. Lieberman, I-Conn., and John F. Kerry, D-Mass., said they may turn to utility-only GHG emissions limits in the effort to pass their climate change legislation, ClimateWire reported. Lieberman said the option was "not my first choice, but it's important that we get started in what we're trying to do." Kerry said the strategy might achieve the primary goal of "pricing carbon" by providing a solution to the challenge of obtaining a 60-vote filibuster-proof majority. Democrats expressed some support for the strategy.

Sen. Byron Dorgan, D-N.D., was quoted as saying: "I don't expect that we will get much Republican support for legislation beyond the energy bill." Bloomberg reported that Senate Majority Leader Harry Reid, D-Nev., emphasized the central role of the White House in helping "us get something done." Kerry said "the president is fully committed. He's fully engaged. He intends to try to move votes himself and he understands the seriousness of this effort."

EEI spokesman Jim Owen was quoted as saying of utility-only legislation: "We have been concentrating on economywide, so this is a game-changer with so many moving parts in the middle of a very fluid legislative situation overall."

- Related stories also appeared in CNN.com, Dow Jones Newswire, Financial Times, and Reuters.

EEI's Kuhn Says Consumer Protection Vital for Climate Legislation

EEI President Tom Kuhn said in a National Journal opinion piece that climate change and energy legislation must include "strong consumer protection measures" in order to win support. Kuhn noted that the House-passed bill included provisions to allocate GHG emissions permits to utilities "to help mitigate electricity price increases," and that design "proved an important concept around which many lawmakers rallied."

Kuhn pointed to the House example as a sign of the need for senators to also focus on consumer protection. Kuhn asked President Obama and senators to put protection "among the issues that top the agenda" at their meeting to discuss the bill. He praised the Kerry-Lieberman bill for allocating additional emissions permits for utilities and adopting "a hard price collar" for permits. Kuhn said that EEI was continuing its effort "to develop workable legislation that will combat climate change while also safeguarding the nation’s continued economic well-being."

New York Times: Kerry-Lieberman Better Than Other Climate Bills

The New York Times, in an editorial published today, endorsed the Kerry-Lieberman climate bill, saying "there are other honorable bills out there that have much to recommend them but fall short because they do not include mandatory greenhouse gas reductions or a price signal" on carbon.

The editorial expressed disappointment that in his recent address on the Gulf of Mexico oil spill, President Obama did not argue for a "broadly based, economy-wide cap-and-trade system," but instead "opened the door far too wide to alternative policies that aren’t real alternatives, and to more stalling."

Detroit Free Press Endorses Kerry-Lieberman Climate Legislation

The Detroit Free Press, in an editorial, wrote that "Congress, not BP, has the cure for our continuing addiction to fossil fuels." After the Gulf of Mexico oil spill, the newspaper said the Senate should approve the Kerry-Lieberman climate bill, which "balances its increasingly stringent [GHG emissions] limits with concessions to virtually every major energy stakeholder--loan guarantees for nuclear plant owners, exemptions for heavy industry, rebates for consumers, and so on--while endeavoring to generate millions of clean-energy jobs."

The Free Press noted that the legislation faces opposition from Republican senators claiming President Obama was "mixing apples and oranges by conflating climate change legislation with his campaign to reduce reliance on oil. But the president is merely connecting the dots. Projections indicate the Kerry-Lieberman bill would accelerate the transition from fossil fuels. A study by the Peter G. Peterson Institute for International Economics suggests the bill's mandates for alternative fuels and more efficient vehicles would reduce oil imports by one-third over the next quarter century."

EPA Analysis of Kerry-Lieberman Bill Expected Monday

EPA plans to issue its economic modeling analysis of the Kerry-Lieberman climate change bill on Monday, E&E News PM reported. Agency spokesman Brendan Gilfillan said the shift from the originally planned release on Wednesday resulted from a final review of the analysis not being completed until this weekend. Sen. Joseph I. Lieberman, ID-Conn., said the analysis will be "a very big moment in the Senate's consideration of energy and climate legislation."

Lieberman called the announcement "the most comprehensive, credible analysis of energy-climate legislation that's yet been done." He also expressed hopes that the study will show that the bill "will create millions of good new jobs." The Energy Information Administration was expected to issue its own analysis of the bill within several weeks.

Options Abound as Democrats Struggle to Craft Climate-Energy Bill

Democrats hoping to pass climate change legislation through the Senate were using elements from a variety of proposals in the hope of gaining a 60-vote majority, Greenwire reported. White House Chief of Staff Rahm Emanuel said "there's enough in each" of the proposals to put together "a serious and comprehensive energy bill" that will pass in 2010.

Meanwhile, Energy Secretary Steven Chu welcomed another energy bill backed by Sens. Richard Lugar, R-Ind., and Lindsey Graham, R-S.C., Reuters reported. In a letter to Lugar, Chu wrote: "In particular, I appreciate your ideas for reducing America's oil dependence--which has taken on greater urgency as a result of the BP oil spill."

Senate Environment and Public Works Committee Chairwoman Barbara Boxer, D-Calif., said she expected Senate Majority Leader Harry Reid, D-Nev., to introduce his own bill as an alternative to the Kerry-Lieberman proposal. Reid was to meet with committee leaders today to begin devising a strategy, with a Democratic caucus to follow next week.

Sen. Joe Lieberman, ID-Conn., contended that introducing his proposal as a bill amendment was "wrong as a matter of policy and what's best for the country," and he called for it to instead "be at the center of the arena" as its own bill. Lieberman and Sen. John Kerry, D-Mass., objected to a cap-and-trade program that would apply only to utilities, with Lieberman arguing that "the moment is right for comprehensive legislation."

Brian Wolff, EEI senior VP of external affairs, was quoted by Greenwire as saying: "What you have is everybody right now is just throwing everything on the table."

Related story also appeared in Bloomberg via BusinessWeek.

Democrats Say No Firm Legislative Strategy Yet for Climate Proposal

Senate Democrats have backed away from comments in which Sen. Charles Schumer, D-N.Y., said he expected the Kerry-Lieberman climate change legislation to be submitted as an amendment to an energy bill sponsored by Sen. Jeff Bingaman, D-N.M., Environment and Energy Daily reported. Schumer spokesman Brian Fallon said Schumer had only "speculated on one procedural option" for the proposal, and knew of no final plans for the floor strategy for legislation "addressing the nation's urgent energy challenges."

Fallon said Schumer would join "discussions with the rest of the leadership later this week on how to best move forward." Sens. Byron Dorgan, D-N.D., said he preferred the plan outlined by Schumer. Whitney Smith, spokeswoman for Sen. John Kerry, D-Mass., was quoted as saying: "We believe we're right on track as the leadership devises the best process to ensure passage of comprehensive climate and energy legislation and appreciate Senator Schumer's compliment of the work that's been done and the broad support we've secured."

EPA to Release Climate, Energy Bill Economic Modeling June 10

EPA is expected on June 10 to publicly release its economic modeling results on comprehensive energy and climate legislation, Greenwire reported. Republicans, said Greenwire, were expected to challenge the assumptions EPA used in the analysis of projected household costs and consumption rates resulting from cutting U.S. GHG emissions 17 percent below 2005 levels by 2020.

Citing other studies on the proposed legislation, authors Sens. John Kerry, D-Mass., and Joseph Lieberman, ID-Conn., were quoted as saying: "Several nonpartisan studies and economic analyses have now concluded that the American Power Act achieves the goals we set: to strengthen energy security and address climate change. Our approach creates jobs, protects consumers and reduces our oil dependence."

Also on June 10, Senate Majority Leader Harry Reid, D-Nev., plans to hold a climate legislation strategy meeting with key committee chairmen, and the Senate is scheduled to vote on a resolution offered by Sen. Lisa Murkowski, R-Alaska, intended to prevent EPA from writing emissions rules for cars and industrial facilities.

Lindsey Graham 'Floating' Utility-Only Bill in Senate

Greenwire reported that Sen. Lindsey Graham, R-S.C., who abruptly dropped out of the tripartite Senate effort to revive a comprehensive climate change bill in late April, was "floating yet another alternative to price carbon emissions by focusing on just power plants." The utility sector is "most in need of a market signal for pricing greenhouse gases," the newsletter reported, adding that leaving other sectors out of a bill could also help win additional Senate votes.

Sen. John Kerry, D-Mass, who along with Sen. Joe Lieberman, I-CT, co-authored the latest draft unveiled in mid-May, was insisting that legislative efforts remain focused around a comprehensive bill. But other senators beyond Graham "also have expressed an interest in a less sweeping plan for controlling greenhouse gases," Greenwire reported.

EEI's Brian Wolff, senior vice president for external affairs, said the Kerry-Lieberman draft has encountered headwinds in overcoming "the gas tax" label, adding that the transportation component of the bill "was really going to be hard for people politically." Wolff told Greenwire that there have not been any discussions with member companies yet about the power plant-only option, adding "it's not been baked at all."

EEI also plans calls to key senators in the coming weeks on the Kerry-Lieberman bill, which was welcomed by the association "because it included valuable allocations that help the industry compensate customers for otherwise higher energy prices," Wolff was quoted as saying. "We've been focused on each legislative effort, whether it's the House effort or the Senate effort, on what we can do to improve it and what we can do to support it," Wolff said.

Study: Climate Change Bill Would Create Thousands of Jobs

A study by the Peterson Institute for International Economics found that the climate change legislation introduced in the Senate last week by Sens. John F. Kerry, D-Mass., and Joseph I. Lieberman, I-Conn., would create hundreds of thousands of jobs over the next decade, Reuters reported. The study concluded that from 2011 to 2020, the average annual employment in the U.S. would increase, including 165,000 jobs in nuclear power, 19,000 in renewable energy, 28,000 in biofuels, and 96,000 jobs related to the development of clean-coal technology. The study said 72,000 jobs would be lost because of less demand for fossil fuels and the cancellation of new fossil-fuel generation facilities.

The prediction for the second decade had lower job growth because "additional power sector investment becomes more inflationary" and energy prices would rise. From 2011 to 2030, "average annual employment is 6,300 jobs higher than business as usual."

Sens. Kerry, Lieberman Disagree With Critical Journal Editorial

In a letter published today by the Wall Street Journal, Sens. John Kerry, D-Mass., and Joe Lieberman, I-Conn., responded to a May 17 Journal editorial headlined "Just Don't Call It a Climate Bill." The co-authors of climate legislation said the editorial "fails to accurately portray what is fundamentally pro-growth and pro-business legislation." They said that industry leaders and environmentalists stand behind their legislation.

They wrote: "Our bill will create hundreds of thousands of new jobs each year and reduce our dependence on foreign oil by up to 40 percent in 2030. We reinvest in our energy infrastructure to ensure that America remains the global leader in this $6-trillion industry; all this while protecting consumers and keeping speculators out of the market."

Sen. Reid to Push for GOP Help on Climate Legislation

Senate Majority Leader Harry Reid, D-Nev., said support from at least one Republican was necessary to move the Kerry-Lieberman climate change bill forward, Environment and Energy Daily reported. Reid said he planned to meet with Democrats in June to consider plans for the legislation, including to revive the possibility of pursuing an energy-only bill.

Sen. Sherrod Brown, D-Ohio, said he and other Democrats from coal states might not vote for the bill. Brown speculated that Reid was pressing Sens. John Kerry, D-Mass., and Joe Lieberman, I-Conn., to "deliver something with more consensus than they're getting, including more Republicans."

A former aide to the Clinton administration said "the silence from the White House is deafening" and added that without more support from the Obama administration "there does not seem to be adequate political momentum" to pass Kerry-Lieberman. Lieberman was quoted as saying of Midwest Democrats: "The support from Midwestern utilities would be helpful in reassuring them their consumers won't be experiencing a big price hike. My hope is a smaller group of oil-producing states will come together and after that it's going to be one by one. It's house-to-house combat."

- Related story also appeared in The Hill.

Post Backs 'Less Than Perfect' Climate Bill; Seeks Quick Vote

The Washington Post, in an editorial published today, admitted "there's a lot we would change" about the Kerry-Lieberman climate and energy bill, but urged the Senate to pass the legislation because "acting on global warming is not going to get easier after this year's election. The longer Congress waits to pass a comprehensive climate bill, the less time America will have to cut its emissions, and the more expensive the process will be."

The Post wrote that the "most rational action, would be to put a gradually rising tax on carbon emissions and let the market find the cheapest alternatives. The Kerry-Lieberman bill doesn't go that route. But it does, through a system of tradable emission permits, create a gradually rising price on carbon emissions that, if properly administered, could have a similar effect. This is crucial, because left to their own devices, legislators will merely subsidize some of the most expensive alternatives to carbon-burning: new nuclear plants (Republicans), solar plants (Democrats), carbon sequestration (coal-state legislators of both parties). If the market is allowed to work, on the other hand, cheaper and more efficient methods--conservation, converting the dirtiest coal plants to natural gas--will probably be used while the rising price of carbon spurs research into currently more expensive solutions, with time bringing down the price of at least some of them."

EEI's Kuhn Signals Hard Work Remains to Fine-Tune Climate Bill

EEI President Tom Kuhn said the trade association membership would be taking a long, hard look at the specifics of the climate-energy bill introduced by Sens. John F. Kerry, D-Mass., and Joseph I. Lieberman, ID-Conn., according to the National Journal's Energy and Environmental blog.

Said Kuhn: "We're supporting the bill moving forward, and basically there's still a 1,000-page bill you've got to look at." Kuhn said that a key focus would be to examine "measures that would reduce emissions of coal-fired plants in a cost-effective way," the blog reported. "There's a lot to do," he said.

Duke Energy President and CEO Jim Rogers was quoted by the blog as also saying the measure "needs some work." Rogers said there are "pieces of it" he wants to see tweaked but wouldn't elaborate on what those pieces were, the blog stated, adding: "What he liked about the bill, he said, was that it would give his company--the nation's third-largest consumer of coal--a sense of certainty." Rogers was quoted as saying: "With a price on carbon, it will inform my choices going forward."

League of Conservation Voters President Gene Karpinski called the initiative "the single most important piece, far and away, because that's what is needed to get the job done." Natural Resources Defense Council Climate Change Director Dan Lashof added: "The core limits on carbon pollution in the bill are a solid foundation for legislation. The mechanism they have to limit price volatility works. It maintains the environmental integrity of the emissions limits. It looks good. It's actually a good design."

Editorials Say Senate Climate Bill Good Move in Right Direction

The New York Times, in an editorial published today, said the Senate was "paralyzed by partisanship" and "hobbled by indifferent leadership" in its efforts to sort through a new energy and climate bill. Wrote the Times: "You don't have to look far for proof that this country must cut its dependence on fossil fuels and develop cleaner sources of energy. It can be found in the oil-slicked Gulf of Mexico. It can be found in China's aggressive efforts to win the global competition for green technologies and green jobs. And, most urgently, it can be found in the inexorable math of accumulating greenhouse gas emissions."

The Times said the latest offering from Sens. John F. Kerry, D-Mass., and Joseph I. Lieberman, I-Conn., represented "a good but far from perfect bill…that would at least point the country in the right direction. For the first time, it would set a price on carbon emissions that are now dumped without penalty into the atmosphere. A price signal is an essential prerequisite for reducing emissions and for shifting American industry to cleaner, less polluting sources of energy."

The Christian Science Monitor, in its editorial on energy published today, wrote: "Carbon-spewing industries that want market certainty for energy prices but also seek loopholes in energy bills cannot have it both ways. In case global warming is all too real, the stakes are too high to play the kind of risky political games normally played in Washington. If anything, the Kerry-Lieberman bill needs stiffer, more certain measures."

The Economist, in its editorial published today, noted that while the legislation carries the name "The American Power Act," its title alone obscures an important fact: "It is still a cap-and-trade bill that seeks to reduce greenhouse-gas emissions by 17 percent on 2005 levels by 2020, and 83 percent by 2050. Many Republican senators still consider this a job-killing energy tax. Messrs Kerry and Lieberman have tried to be generous, and aides called the bill an invitation to further negotiation. But any change that can win one vote may lose another."

Commentators Abound With Views on What Climate Bill Would Do

Commentators abound on the new Senate climate bill. For example, Derek Thompson, a staff editor at Atlantic Business, wrote: "The Senate bill is a lot weaker on renewable energy mandates and efficiency standards. In fact, it's worth reiterating that the Senate bill's renewable targets would do less (yes, less) than what we could expect to happen if no bill passed at all. If environmental groups want to strengthen the bill, this is, far and away, the most promising place to do so, especially since these items will make a big difference in the short term."

James M. Taylor, a senior fellow for environment policy at the Heartland Institute, wrote on NewsBlaze.com: "The Kerry-Lieberman American Power Act recycles the job-killing, energy-restricting provisions of prior global warming bills, with the only significant difference being the accompaniment of comical talking points designed to con the American public into believing that replacing efficient energy sources with inefficient ones will somehow create jobs and benefit the economy."

Noting that only 25 percent of carbon allowances would be sold under the new legislative outline, E. Thomas McClanahan, a Kansas City Star editorial columnist, wrote: "The rest? Given away, of course: to power distribution companies, refiners, developers of carbon-capture schemes and something called the National Industrial Innovation Institute."

Writing in the Baltimore Sun, Brad Heavner, state director of Environment Maryland, stated: "The bill as a whole needs improvement to remove the subsidies for fossil fuels and nuclear power."

EEI's Kuhn Joins Senators for Climate Bill Rollout

Appearing Wednesday with Senators John Kerry, D-Mass., and Joe Lieberman, I-Conn., as they unveiled their new climate change bill, EEI President Tom Kuhn called the package an "historic achievement" and said EEI supports "continued Senate debate" on the legislation, Greenwire and other news organizations reported. Kuhn cited the bill's inclusion of a "hard" price collar and its provision of emission allowances as signs of progress.

Duke Energy Chairman, President and CEO Jim Rogers was quoted as saying the legislation "helps get the transition right to a low-carbon world." FPL Chairman and CEO Lew Hay added that "it protects all the customers." Kerry said his proposal had support from "people from across the ideological spectrum," including the Pentagon as well as environmentalists, the Associated Press reported.

Sen. Ben Cardin, D-Md., was quoted as saying: "It's important to try to get it done. Whether we can succeed or not, I don't know. It is a long shot."

According to the Los Angeles Times: "The proposed legislation mandates reductions in greenhouse gas emissions from fossil fuels via a so-called cap-and-trade system for power plants and, eventually, factories -- with strict curbs on the types of trading that could be done. It would require oil companies to obtain emission permits at a set price not determined by the trading market. The legislation would immediately send two-thirds of the revenue from emissions permit sales directly back to consumers as refunds on their utility bills, Kerry said, and eventually refund nearly all of the proceeds to consumers, in an effort to blunt energy cost increases."

- Related stories also appeared in the New York Times and Christian Science Monitor.

Exelon's Rowe Says Under 25% Chance for Passage of Climate Bill

In a speech to the Resources for the Future Policy Leadership Forum in Washington, Exelon Chairman and CEO John Rowe said that despite growing support, the climate change bill had a less than 25-percent chance of passing Congress this year, in his estimation, E&E News PM reported.

Rowe praised Sens. John Kerry, D-Mass., Joe Lieberman, ID-Conn., and Lindsey Graham, R-S.C., for getting the bill "just about right," but said Graham's departure will hurt its chances for approval. Rowe said Graham "still has his heart in" the bill, and approval "could happen" if Graham returned to work on it. He added that Exelon would not alter its "wait and see" stance on adding new nuclear plants regardless of the fate of the bill, because Exelon needed "to see gas prices and carbon prices actually get a bit higher before we would move."

Rowe supported a position of seeking gradual progress on climate change and energy prices. He also said the government should not make "massive investments" in an array of technologies rather than let the market determine changes in energy. Rowe was quoted as saying: "Your choices of technology change from year to year, and it is very important to know it. This is an argument to say, 'Proceed prudently. What you think is true will not always stay true.'"

Outline of New Energy Bill Circulated; Kuhn to Attend Unveiling Today

E&E News PM has obtained a copy of the outline of the climate bill that Sens. John F. Kerry, D-Mass., and Joseph I. Lieberman, I-Conn., plan to release today. The summary notes that the bill would provide $54 billion in nuclear loan guarantees and other incentives for nuclear plant construction, as well as $2 billion in annual funding for carbon capture and sequestration. The summary said the bill offered to remove "disincentives for natural gas generation at merchant plants," promote the development of small, modular reactors, enhanced proliferation controls and provide GHG emissions allowances to "energy-intensive and trade-exposed" industries starting in 2016.

The legislation would impose GHG emissions limits on plants starting in 2013, Reuters reported. It sought to cut 2005 emissions levels 17 percent by 2020 and set the initial price of permits between $12 a ton and $25 a ton. The bill may propose a new formula for distributing permits to utilities, with historic emissions levels accounting for 75 percent of the formula, and sales accounting for the remaining 25 percent.

Sen. Tom Carper, D-Del., was quoted as saying of the 50-50 formula supported by EEI: "We asked the industry. We said, 'OK, this is above our pay grade. Why don't you guys figure it out?' They did. God bless them. And we should just declare victory and take what they negotiated." EEI President Tom Kuhn was among those expected to take part in the announcement of the climate change bill today, the Associated Press reported.

Kerry, who said the bill will be called the American Power Act, was quoted as saying: "People from across the ideological spectrum are standing by us, ready to line up in support of this plan. Any time you see me and T. Boone Pickens urging the Senate to pass something, you know it's a genuine effort to bridge the old divides." He was quoted as saying: "For climate, it's the bottom of the ninth inning and the bases are loaded if we can just push these runs across the plate."

- Related story also appeared in the Los Angeles Times.