House Dems close to climate agreement

June 25, 2009 10:41:13 AM PDT
The nuclear industry, ethanol producers and rural electric cooperatives are among those who stand to benefit from eleventh-hour deals made by House Democrats in search of enough votes to pass a sweeping climate bill.House Speaker Nancy Pelosi has made passage of the legislation, which would for the first time set limits on carbon dioxide and other greenhouse gases, one of her top priorities.

The California Democrat said progress so far has been "a wonderful collaboration" among lawmakers with different regional interests and said she hoped for a House vote on the bill Friday, before lawmakers depart for their July 4 recess.

While most Republicans remain strongly opposed to the bill, calling it a huge energy tax, support among House Democrats appeared to be growing.

Even so, Democratic leaders and key sponsors of the bill were still meeting with fence-sitting Democrats to try to get their support. And Pelosi met late Wednesday for a second time with a small group of moderate Republicans to try to persuade them to support the measure.

"This is historic legislation," she said at a news conference. "You want to have a good, strong committed vote."

To try to get that vote, the bill's sponsors have been horse trading with a succession of Democratic lawmakers.

As a result, the nuclear industry stands to gain from an added provision that would make nuclear reactor projects eligible for loans from a new "green" energy development bank. The bill also would make it easier to obtain loan guarantees for new reactors.

In a nod to farm groups and the ethanol industry, the bill's sponsors agreed to bar the EPA for at least six years from considering international land use changes when determining whether corn ethanol is a climate-friendly fuel. Environmentalists have argued that corn ethanol emits more greenhouse gases than conventional gasoline if global land use changes as a result of greater corn demand are taken into account.

Those seeking greater commercial access to federal forests also won a prize in the last-minute negotiations. Inserted into the climate bill was an expanded definition of "biofuels" to include salvage lumber and brush from federal forests.

Rural electric cooperatives, who had argued they were being treated unfairly in the distribution of emission allowances, won an agreement to funnel more allowances their way.

And farmers were assured more favorable treatment in how so-called pollution "offsets" are managed. These are credits farmers can sell in exchange for planting trees or adopting practices that sequester carbon in the ground.

Rep. Collin Peterson, D-Minn., chairman of the House Agriculture Committee, said those and other changes turned him from one of the bill's sharpest critics to an advocate.

"We think we have something here that can work with agriculture," Peterson told reporters. "I think we'll be able to get the votes to pass this."

The House bill, covering more than 1,100 pages, would require a 17 percent reduction of greenhouse gases - mainly carbon dioxide from burning fossil fuels such as coal - by 2020 from 2005 levels and about an 80 percent reduction by mid-century. While it would cap climate-changing pollution it also would allow polluters to buy and sell emission allowances as a way to ease the cost of compliance.

A new Washington Post-ABC News poll shows that three-quarters of Americans think the federal government should regulate the release of greenhouse gases, and 56 percent said they would approve such measures even if it increased their monthly electricity costs by $10.

While sponsors of the bill acknowledge that putting a price on carbon emissions will lead to higher energy production costs, they say costs to consumers will be modest because the bill also calls for free emission allowances, incentives for energy efficiency and direct price relief for low-income households.

While environmental groups as well as a number of business organizations and corporations have endorsed the bill, other industry groups, including the American Petroleum Institute, have called for its defeat. Despite the concession to farmers, the American Farm Bureau Federation said Wednesday it remains opposed, calling the bill "seriously flawed."

"What we see is a job killer," Rep. Eric Cantor of Virginia, the second-ranking Republican in the House, said at a news conference Wednesday. "There's no question the cap-and-trade will cost millions of jobs" and higher energy prices.