Policy & Market


Democratic senators object to oil drilling in climate bill

Ten Democratic US senators say they cannot back a bipartisan comprehensive energy and climate change bill under discussion if it opens the nation’s coasts and oceans to “unfettered access to oil and gas drilling.”

In a letter to the bill’s co-sponsors, the senators argued that if headlong expansion of oil and gas drilling was the price to be paid by Americans for climate change legislation, then the exercise was not worth it.

“As coastal senators, we truly appreciate your efforts to develop comprehensive climate legislation,” the senators wrote. “After all, our states are literally the front lines when it comes to the severe impacts we’ll see from seal level rise and stronger storms. But we hope that as you forge legislation, you are mindful that we cannot support legislation that will mitigate one risk only to put our coasts at greater peril from another source.”

Signing the letter were Senators Ted Kaufman of Delaware; Bill Nelson of Florida; Barbara Mikulski and Ben Cardin of Maryland; Frank Lautenberg and Robert Menendez of New Jersey; Ron Wyden and Jeff Merkley of Oregon, and Jack Reed and Sheldon Whitehouse of Rhode Island.

Senators John Kerry, a Massachusetts Democrat, Lindsey Graham, a South Carolina Republican, and Joe Lieberman, an independent from Connecticut, plan to introduce their climate bill the second half of next month.

To win 60 votes needed for passage, the Kerry-led trio has sought to broaden its appeal by including funds for expansion of nuclear energy, offshore drilling and carbon capture and storage technologies.

They also reportedly plan to limit a carbon cap-and-trade system initially to electric utilities and to include language that limits authority of the US Environmental Protection Agency under the 1970 Clean Air Act to control greenhouse gas emissions.

Environmental groups oppose some or all of those proposed changes in the new legislation even as business groups and some Republican lawmakers welcome them.

A climate bill drafted last year by Kerry and Barbara Boxer, a California Democrat, failed to advance in face of strong opposition from senators from coal-dependent states, and weak support from the White House that was absorbed in pushing controversial health care reform.

The House of Representatives passed a bill in June that cuts US carbon emissions from large stationary sources 17% by 2020 and 83% by 2050 from 2005 levels. The lower emission levels would be achieved through a cap-and-trade system.

On the drilling issue, Graham earlier this week said that he, Kerry and Lieberman were looking at wording in the upcoming bill that would give states that agree to offshore oil and gas drilling on the Outer Continental Shelf the option to share revenue.

The 10 senators in their letter also rejected that idea.

“During these difficult fiscal times, funds that belong to the American people should be shared equally and prioritized to reduce the federal deficit and to protect our oceans and coasts that provide this resource,” they wrote.

The 10 senators also argued that the oil and gas leasing process needed to be reformed before more access was given for drilling, noting that oil companies hold more than 60 million acres of offshore leases from which they are not producing oil or gas.

“We need to create a system that incentivizes oil companies to produce what they have before we open environmentally sensitive areas to production,” they wrote. As well, they contend that oil spills from offshore drilling operations are too frequent and thereofre, too problematic and dangerous for the environment.

Kerry, Graham and Lieberman are also looking at a system whereby oil companies pay a fixed fee for emission rights tied to the price that electric utilities would pay for their proposed greenhouse gas allowances.The trio has not decided how the the fee would be assessed.

Separately, Graham says he will continue to push ahead with the climate bill despite bitterness among Republican lawmakers over legislative tactics used by the Democrats to pass a controversial health care reform bill on Sunday.

“It’s going to make it very difficult to do anything complicated and controversial,” he said Tuesday, referring to the charged partisan atmosphere in Washington.

“I’m still committed to trying to roll out a vision of how you can price carbon and make it business-friendly,” he says.

Senator John McCain, the Arizona Republican who lost to President Barack Obama in 2008, was adamant his party won’t help on climate change or any other big legislative initiative that Obama wants.

“There will be no cooperation for the rest of the year,” he vows.

Obama believes there is still a chance to get a climate bill through the Senate before campaigns get into full swing for early November elections. All 435 House members and 36 senators are up for election.

This week he dispatched Carole Browner, his chief advisor on energy and climate change policy, and White House legislative affairs director Phil Schiliro to meet with Senate Majority Leader Harry Reid and Democratic committee leaders to analyze tactics for winning passage.

Reid aims to get a bill to the Senate floor for debate before summer.