Scenarios: Impact of oil spill on climate bill

By Richard Cowan

WASHINGTON (BestGrowthStock) – A massive oil spill in the Gulf of Mexico is unfolding just as the U.S. Senate was on the verge of considering climate change legislation that included an expansion of offshore oil drilling.

The bill, which aims to reduce U.S. emissions of carbon dioxide and other greenhouse gases linked to global warming, already faced many political difficulties in the Senate.

Some senators hate the bill’s plan to establish a new Wall Street trading system for pollution permits. Their opposition may have only deepened with this week’s blistering cross-examination of Goldman Sachs Group Inc executives by a congressional committee. Federal prosecutors are investigating the investment bank’s actions in trading mortgage-related products.

And just a few weeks ago, a horrible coal mine disaster in West Virginia made some wonder whether the climate bill should include billions of dollars to help fund coal industry efforts on “clean coal.”

Against that backdrop, the sunken, leaking oil rig is spewing 5,000 barrels of crude oil a day and the slick is moving toward the state’s shores.

Here are some possible impacts of the environmental disaster on climate change legislation hung up in the Senate:


Democrats who control the Senate know they need at least a handful of Republicans to join them in order to pass a climate bill in the Senate this year.

So they’ve broadened the environmental bill to lure Republican support. One important element are provisions to help the oil industry expand offshore production.

One Senate Republican leadership source noted it would be a public relations nightmare for senators pushing the climate legislation to have oil company executives sharing the stage with them.

“People have frozen in their tracks a little bit. It’s pretty bad timing as far as that particular conversation goes,” a Senate Democratic aide said, referring to lawmakers talking about offshore drilling.

The aide added that for some senators, there is a wait-and-see attitude, with lawmakers watching for how well the clean-up effort goes, how severe the damage is and how much money it takes to fix the problem.

House Speaker Nancy Pelosi, no fan of offshore oil drilling, told reporters on Thursday: “I, myself, approve of the (drilling) moratorium that we had in place before President Bush lifted it.”


There’s a long way to go before any climate bill reaches the Senate floor for debate and/or passage. In the meantime, Senators John Kerry and Joseph Lieberman could tweak their bill to include more environmental protections in the offshore drilling portion, or they could give coastal states more leeway in opting out of any program.


While President Barack Obama says expanded oil drilling must be part of the U.S. energy buffet, the White House has signaled that it might take a slower, more careful approach to offshore activities.

That could shift more emphasis to expanding U.S. nuclear power — an idea many environmentalists hate but one that would also help win the support of some Republican senators.

Billions of dollars in government loan guarantees are expected to be tucked into the climate bill, along with some other incentives for building new facilities.


The Gulf Coast oil spill could breathe new life into the core goal of climate change legislation: Helping foster the development of clean alternative energy sources, including solar and wind power.

This week, the Obama administration approved construction of the Cape Wind project off the coast of Massachusetts, which would be the first U.S. offshore wind farm.

The oil spill could bolster public support for such projects and help efforts to reduce the U.S. carbon footprint, the second largest in the world after China.


The oil spill becomes one more impediment to passing a comprehensive climate bill this year, so Senate Democrats shift their attention to immigration reform as their next, big initiative in this election year.

“Immigration has pretty formally jumped the queue here,” said the Senate Democratic source, who added that if the Senate complete only one more major initiative after Wall Street reform, immigration will “be the bill we do this year.”

Stock Market News

(Editing by Russell Blinch and Stacey Joyce)

Scenarios: Impact of oil spill on climate bill