Climate bill includes protections for coastal states that oppose offshore drilling

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Bill would allow states to veto offshore drilling

WASHINGTON — A long-awaited energy and climate bill to be made public on Wednesday would allow states directly affected by offshore drilling to veto drilling plans of nearby states if they can show significant negative impacts from an accident.

The bill, sponsored by Sens. John Kerry, D-Mass., and Joe Lieberman, I-Conn., also would allow coastal states to opt out of drilling being allowed up to 75 miles from their shores — a concession to lawmakers concerned about offshore drilling in the wake of the Gulf Coast oil spill.

Kerry and Lieberman have closely guarded the bill’s details before Wednesday’s announcement. The Associated Press obtained a copy of a summary being circulated Tuesday on Capitol Hill.

In a break from current policy, states that allow offshore drilling will receive a share of federal revenue, the summary shows. That provision is likely to spark debate from interior senators, mostly in the West, who object to revenue sharing for offshore drilling.

Kerry and Lieberman have said they will press ahead with the climate bill despite losing the support of their only Republican partner, Sen. Lindsey Graham, R-S.C.

Graham, who had been negotiating with Kerry and Lieberman for months, said last week he believes it is impossible to pass the legislation now because of partisan disagreements over offshore drilling and whether to take up immigration reform.

Kerry disagreed, saying in a statement late Tuesday that the Gulf oil spill underscores how desperately the nation needs to break its dependence on fossil fuels.

“For climate, it’s the bottom of the ninth inning and the bases are loaded if we can just push these runs across the plate,” he said.

The bill, to be called the American Power Act, is a chance for Congress to show it can still address major issues, while also creating American jobs, strengthening national security and protecting the environment, Kerry said.

He cited an “unprecedented” coalition of bill supporters, ranging from environmentalists to business leaders and military officials. Tom Kuhn, president of the Edison Electric Institute, which represents U.S. shareholder-owned electric companies, is expected to join Kerry and Lieberman for Wednesday’s announcement, suggesting the industry group’s support.

“People from across the ideological spectrum are standing by us, ready to line up in support of this plan. Any time you see me and T. Boone Pickens urging the Senate to pass something, you know it’s a genuine effort to bridge the old divides,” Kerry said.

Pickens, a well-known Texas oilman, paid millions in support of Swift Boat Veterans for Truth, a group that attacked Kerry’s Vietnam War record in the 2004 presidential campaign. Pickens now supports huge increases in wind power and natural gas that would benefit from the climate bill.

The legislation aims to cut emissions of carbon dioxide and other heat-trapping greenhouse gases by 17 percent below 2005 levels by 2020 and more than 80 percent by 2050.

For the first time it would set a price on carbon emissions for large polluters such as coal-fired power plants. Rates initially would range from $12 per ton of carbon emissions to $25 per ton, depending on market prices. Restrictions would not take effect until 2013 for power plants and transportation fuels, and 2016 for manufacturers.

Allowances would be granted to local electricity companies, which would be required to use them to help rate payers. In addition, a separate consumer relief provision would provide rebates to eligible families.

Kerry and Lieberman said the bill would exempt farms and most small and medium-sized businesses, concentrating efforts on the largest polluters.

The bill would offer incentives of up to $2 billion per year for companies that develop so-called clean coal technologies, including methods to capture and store carbon emissions.

The legislation has several provisions aimed at boosting nuclear power. It increases funding for nuclear loan guarantees to $54 billion, the same amount President Barack Obama has proposed, and calls on the Nuclear Regulatory Commission to speed the licensing process for new plants.

The bill also would provide a 10 percent tax credit for certain nuclear power construction expenses, allow tax-exempt bonds for public-private partnerships for advanced nuclear power facilities, and provide grants in place of tax credits for some nuclear expenses.