Loaded with concessions, climate bill wins backing of oil companies

Kate Sheppard has some big news on the Senate climate bill, expected to drop Monday, following a conference call with U.S. Sen. John Kerry, D-Mass., one of three senators working on the bill.

The good news for environmentalists: Three of the country’s big five oil companies have agreed to support the bill, as has the Edison Electric Institute, the leading utility industry group. While EEI did eventually support the House climate bill that passed last June, the oil industry was largely in opposition, so this news could help bring oil-state senators like Mary Landrieu, D-La., on board, particularly since Kerry thinks the American Petroleum Institute will stop running ads bashing the legislation.

The bad news for green advocates: This new support comes at a steep price, with heavy concessions to oil, agriculture, industry and dirty energy. Kate has the rundown:

• The bill would remove the Environmental Protection Agency’s authority to regulate carbon dioxide under the Clean Air Act, and the states’ authority to set tougher emissions standards than the federal government.
• There will be no fee—or “gas tax”—on transportation fuels. Instead, oil companies would also be required to obtain pollution permits but will not trade them on the market like other polluters. How this would work is not yet clear.
• Agriculture would be entirely exempt from the cap on carbon emissions.
• Manufacturers would not be included under a cap on greenhouse gases until 2016.
• The bill would provide government-backed loan guarantees for the construction of 12 new nuclear power plants.
• It will contain at least $10 billion to develop technologies to capture and store emissions from coal-fired power plants.
• There will be new financial incentives for natural gas.
• The bill would place an upper and lower limit on the price of pollution permits, known as a hard price collar. Businesses like this idea because it ensures a stable price on carbon. Environmental advocates don’t like the idea because if the ceiling is set too low, industry will have no financial incentive to move to cleaner forms of energy.
• The energy bill passed by the Energy and Natural Resources Committee last year will be adopted in full. This measure has sparked concerns among environmentalists for its handouts to nuclear and fossil fuel interests.

Most of this isn’t terribly surprising, although environmentalists had been hoping — without much optimism — that the preemption of EPA and state regulatory authority wouldn’t be included in the final bill. As Kate notes, enviros also hate the Bingaman-Murkowski energy bill that will now be incorporated in full.

Is this enough for some liberal groups to withhold their support? Probably — although the mainstream of the environmental movement is likely to bite the bullet and throw its weight behind the country’s best chance to curb greenhouse gas emissions.