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Something For Everyone: Kerry, Graham, Lieberman Outline Climate Compromise Bill

A compromise climate and energy bill drafted by a trio of U.S. senators will emphasize investment in clean energy, expanded offshore drilling and nuclear power as well as a greenhouse gas emissions cut of 17 percent below 2005 levels by 2020 -- the same target President Obama is expected to offer up at international climate talks in Copenhagen, which began this week.

In short, its a bill that will push jobs and energy independence-national security, in an effort to boost support for the proposed legislation.

The tripartisan effort from Sens. John Kerry, D-Mass., Joseph Lieberman, I-Conn., and Lindsey Graham, R-S.C., was outlined during a press conference Thursday afternoon in Washington D.C. A letter sent to the White House, which BNET Energy has linked to here, provides some detail about what this compromise bill will look like.

There are some predictable inclusions. The encouragement of nuclear power and expanded domestic oil and gas production are clearly aimed at garnering at least some Republican support. But the framework does not provide details, including the scope and location of "expanded drilling" in the U.S. and the amount of federal loan guarantees that might be available for nuclear power plants.

There also is a vague commitment to "preserve our refining capacity without sacrificing our environmental goals." This is not surprising, considering the potential impact cap-and-trade-legislation will have on the refining industry. Bill Klesse, CEO of Valero Energy, the largest U.S. independent refiner, has estimated proposed climate legislation would cost millions of American jobs as refining operations are sent countries overseas with looser emissions standards.

The National Petrochemical and Refiners Association has estimated a carbon cost of $20 per ton of carbon dioxide, which would mean an increase of 20 cents per gallon of fuel. This means, the NPRA said, the cost of producing gas, jet fuel, diesel etc., would increase by more than $53 billion in the first years after proposed climate change legislation would go into effect.

The framework presented Thursday is not clear as to how refining capacity would be preserved. More emissions allowances, perhaps?

A couple of other biggies, in my mind, includes the commitment of "significant resources to the rapid development and deployment of clean coal technology, and dedicated support for early deployment of carbon capture and sequestration," according to the framework document sent to the White House.

And then there is the push to create wealth for domestic agriculture and forestry through a carbon offsets program. Again, the details were few. But based on hearings earlier this month, there is some question as to how lucrative a carbon offset program would even be for farmers.

I have to wonder what the push-back will be, especially directed towards Graham. The Republican senator has already been raked over the coals, so to say, from Tea Party activists and the like, who are angered Graham is working on a climate bill at all.

Other points laid out in the framework:

  • A price collar and strategic reserve to moderate the price of carbon and prevent extreme market volatility;
  • Promotion of energy efficiency;
  • Revival of manufacturing industry through clean energy job creation
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