Energy plans taking shape as fight to craft oil legislation looms large

Senate Majority Leader Harry Reid’s (D-Nev.) pledge to bring
energy legislation to the floor this summer is intensifying political jockeying among senators for their
favorite plans — and spurring a furious push by climate advocates to keep carbon
limits in play.

“The disaster in the Gulf is a larger wake-up call that our
current energy policy is a mess,” said League of Conservation Voters President
Gene Karpinski on Friday in arguing for a bill that includes climate change
provisions.

{mosads}The Gulf of Mexico oil spill has given energy legislation a
prized spot on the crowded election-year agenda. Reid has tasked several committee chairmen with crafting provisions in coming weeks on industry liability, drilling safety and
other matters that will be folded into a broader energy package.

But huge questions remain about what will or won’t make the
cut.

A Senate Democratic aide said the plan will be a mix of
short-term measures in response to the spill (such as altering industry
liability rules) combined with drilling safeguards and longer-term policies
that shift the U.S. away from oil.

“There will be something on all those fronts, but what those
things are is completely up in the air right now,” the aide said.

No clear answers emerged from a meeting Reid held with
several committee chairmen and other Democratic leaders Thursday, while a broader
Senate Democratic caucus meeting on energy awaits this coming Thursday.

Ahead of that session, Sen. Jeff Merkley (D-Ore.) plans to
outline proposals Monday for curbing reliance on oil, and will speak on the
matter at the Center for American Progress, a liberal think tank with deep ties
to the White House and influential Democrats.

Other members are preparing new energy plans, too.
Sources on and off Capitol Hill say Sen. Amy Klobuchar (D-Minn.) is readying
legislation on renewable electricity and biofuels.

Across the aisle, Sen. Richard Lugar (R-Ind.) unveiled a
plan last week aimed at curbing oil use through various vehicle efficiency and
renewable energy provisions.

Other ideas abound. Sen. Frank Lautenberg (D-N.J.) is
pushing a plan backed by several environmental groups that would levy new fees
on offshore oil-and-gas leases to fund alternative-energy programs.

These emerging plans come on top of a broad energy
bill
approved a year ago by the Senate Energy and Natural Resources
Committee that’s expected to help form the foundation of the floor
package Reid is compiling. Sen.
Jeff Bingaman (D-N.M.), the panel’s chairman, has been pushing for
consideration of the plan.

That measure, however, is unlikely to be picked up by Reid
whole-cloth, in part because a major provision would greatly expand oil-and-gas
leasing in the eastern Gulf of Mexico — a proposal that won’t fly in the wake
of the oil spill. At the same time, the committee — which oversees offshore
drilling — is crafting new provisions on offshore safety and other matters in
the wake of the Deepwater Horizon disaster.

Perhaps the biggest question is how the emerging focus on
oil will affect the battle that Sens. John Kerry (D-Mass.) and Joe Lieberman
(I-Conn.) are waging to keep climate change provisions in the mix.

They have authored a broad plan — which has not attracted
any GOP backing thus far — that blends a modified version of cap-and-trade with
new support for building nuclear power plants and developing alternative energy.

An early test of the Senate’s willingness to
support greenhouse gas requirements occurred last Thursday, when
Democrats beat back Sen. Lisa Murkowski’s
(R-Alaska) plan that would have blocked Environmental Protection Agency (EPA) climate change rules,
although six
Democrats joined a unified GOP caucus in backing her proposal.

Opponents cited the BP oil spill at every opportunity in
arguing against Murkowski’s plan, alleging that a vote against EPA rules would
have been a huge gift to “Big Oil.”

But now it’s unclear if climate advocates can make a mirror
image of that argument take hold. Environmental groups are scrambling to show
that the oil spill underscores the need for an energy-policy overhaul that
includes congressionally established limits on greenhouse gas emissions.

“The chances are better right now than they have been at any
point in the political calendar of 2010,” said David Foster of the Blue Green
Alliance, a group composed of unions and environmental organizations, on a
call with reporters Friday.

But despite that optimism, it could be very tough for carbon
limits — which face widespread resistance among Republicans and some centrist
Democrats — to stay in the mix.

And beyond the purely political hurdles, efforts to link
climate legislation with the Gulf of Mexico spill could face questions on
policy grounds.

Adele Morris, an energy expert and economist with the
Brookings Institution, notes that the major Capitol Hill cap-and-trade bills
thus far would have a much bigger effect on the electricity sector than
transportation, which accounts for the bulk of U.S. oil use.

She points to EPA analysis of the sweeping cap-and-trade
bill that narrowly passed the House last year, which requires cutting U.S.
greenhouse gas emissions by 17 percent by 2020 and 83 percent by 2050, relative
to 2005 levels.

That plan, according to the modeling, would lead to a
significant drop in the use of traditional coal-fired power plants in the
country’s electricity mix, while nuclear power and renewable electricity take
increasing shares and energy efficiency increases. But the various scenarios modeled show little change in the
use of petroleum in coming decades, and Morris said she expects similar effects from the
Kerry-Lieberman plan.

“Cost-effective climate policy is not going to do much to
reduce oil consumption, at least through 2050, according to the studies we have
seen by EPA and others,” said Morris, who emphasizes that she supports putting
a price on carbon emissions. “If you want to reduce petroleum per se as opposed
to carbon generally, you are going to need a different policy.”