Oil spill alters climate change bill

The catastrophic oil spill in the Gulf of Mexico has given new momentum to climate change legislation, but capping carbon emissions still faces a difficult road in the Senate.

President Barack Obama pointed to the “inherent risks to drilling 4 miles beneath the surface of the Earth” as a reason to "aggressively accelerate" the nation’s transition to a "clean energy economy." The only way to do this, he said, is “putting a price on carbon pollution” so that “capital comes off the sidelines and the ingenuity of our entrepreneurs is unleashed.”

The president endorsed legislation sponsored by U.S. Sens. John Kerry, D-Mass., and Joe Lieberman, I-Conn., that takes a sector-by-sector approach to cutting carbon emissions. The bill would set a floor and ceiling for the price of carbon, and establish a system for selling and trading carbon permits among electric utilities, large manufacturers and other major emitters of greenhouse gases. Consumers would receive rebates to soften the impact of higher energy prices.

The legislation also would increase government investment in renewable energy sources, while providing incentives for nuclear power and clean coal technologies. In a bid to win support from Republicans and moderate Democrats, it originally included incentives for offshore drilling -- but the Gulf oil spill has mucked up that strategy.

Obama, however, has used it to make a case for the bill, even as he has suspended deep-water drilling.

"The votes may not be there right now, but I intend to find them in the coming months," he said. "We will get it done."

This "explicit commitment" from the president pleased Kerry and Lieberman.

“President Obama is clearly putting his shoulder to the wheel to pass comprehensive climate and energy legislation this year,” the two senators said in a joint statement.

A day after Obama’s comments, Senate Majority Leader Harry Reid announced plans to bring “a comprehensive clean energy bill” to the floor in July. Like Obama, Reid cited the Gulf oil spill as a reason for prompt action.

“We must move much more quickly to kick the oil habit as soon as possible, and push harder for the production of affordable alternative fuels and advanced vehicles,” Reid wrote in a letter to eight committee chairmen.

Reid asked the chairmen to submit recommendations by July 4 on what should be included in the bill to reduce the risk of future oil spills and make sure oil companies are held fully accountable if they do occur.

The House already has passed legislation that would increase the tax that oil companies pay into the Oil Spill Liability Trust Fund, from 8 cents to 34 cents per barrel. Obama, meanwhile, renewed his call for “rolling back billions of dollars of tax breaks to oil companies so we can prioritize investments in clean energy research and development.”

Read the full story via the Phoenix Business Journal.