Climate and energy bill options in U.S. Senate

Unless Reid can muster more support, including from fellow Democrats, the measure will not include even a scaled-back cap on emissions blamed for global warming.

Once Reid decides on legislation for the full Senate to debate, Obama may push lawmakers more aggressively. But time is running short for debate with less than three weeks remaining before the Senate is slated to go on summer break. Elections loom in November, in which Democrats may likely lose seats.

The House (of Representatives) has already passed a quite ambitious bill and the two would have to be reconciled before being presented to Obama.

Here are the directions the climate and energy bill could take in the Senate:

TOUGH TO DO: BILL WITH ANY EMISSIONS CAP

Senator John Kerry, a Democrat, is fighting to include an emissions cap for utilities in the bill, which is a big step back from the House bill passed with an economy-wide cap-and-trade scheme.

Backers of the idea face an uphill battle getting the votes as Democrats in states that are heavily dependent on oil and coal oppose it. Some Republicans, including Lamar Alexander and Lisa Murkowski, label a climate measure an “energy tax.”

Climate bill supporters would also likely have to dig deeper to find more Republican votes to reach the required 60, as a Democratic vote may have been lost. Senator Carte Goodwin, who will be sworn in on Tuesday to temporarily fill the seat vacated by the late Robert Byrd of West Virginia, opposes caps on greenhouse gas emissions.

Climate bill backers had hoped Byrd, who had recently been criticizing the coal industry, could have been persuaded to vote for carbon caps. The Democrats, who can count on up to 59 votes, will anyway need some Republican support to get to 60.

OFFSHORE REFORM, RENEWABLE INCENTIVES LIKELY

It is more likely that the Senate will see a bill without emissions caps but containing language to tighten regulations for offshore drilling after the BP oil spill. Incentives to spur renewable energy could be added to it.

Measures that would both toughen drilling rules for the offshore industry while allowing oil companies to get their rigs going would likely draw bipartisan support.

“You could get a quite number of Republicans on board if (Democrats) are disciplined enough not to overshoot” with too many add-ons to the legislation, said Whitney Stanco of Concept Capital, a firm that tracks Washington for investors.

Measures could include a higher cap on liability for oil spills, up from the current $75 million. Raising taxes on the industry could also be a feature of this option.

Senators may vote for tougher restrictions on oil drilling in this election year to show they are working to prevent another Gulf of Mexico disaster.

Clean energy components, such as energy efficiency programs, a bank to finance clean energy, and tax credits for vehicles that run on natural gas could be added to such reforms.

A battle is also forming over whether to include a measure seeking to reduce greenhouse gas emissions from fuels. That could take pressure off auto companies to make more efficient engines, but oil companies would oppose it.

SENATE COULD PASS ENERGY-ONLY BILL

There would be no carbon caps in this option, but it would likely cut emissions by boosting power output from energy sources like wind, solar or even nuclear.

The Senate Energy Committee has already passed legislation that would boost incentives and mandates for nuclear energy and renewable power.

It contains a so-called renewable energy standard, which would require utilities to generate a minimum of 15 percent of their power from alternative energy.

But senators from other states with solar- and wind-power potential may push to raise the mandate to 20 percent or more. California has already passed stronger mandates.

However, many lawmakers from states in the South and Midwest, some of which have access to large supplies of cheap coal, say they do not have capacity to produce enough renewable fuel to meet mandates.

Senators from those states may fight to get “clean” coal and nuclear into the mandates, which could lead to prolonged debate on what should be in the energy-only bill.