Senate Democrats to introduce energy bill

WASHINGTON (BestGrowthStock) – U.S. Senate Majority Leader Harry Reid will unveil as early as Monday a slimmed-down energy bill seeking to make offshore drilling safer and convert trucks to run on domestic natural gas.

The full Senate could begin consideration of Reid’s bill on Tuesday and Democrats would like to pass it by the early part of the following week.

With time running short ahead of a month-long recess starting Aug 6, Democrats abandoned efforts last week to put climate-control measures in the bill. Reid said then that he had no Republican votes for items such as carbon caps and mandates requiring utilities to generate some of their power from alternatives sources such as wind and solar.

Reid said Congress could revisit climate legislation in September but lawmakers and analysts doubt there will be much appetite ahead of the mid-term elections in November.

And if Republicans pick up seats, as expected, the effort to put a price on carbon and cut emissions could be stalled for years, which would also hamper the Obama Administration’s efforts to take a lead role at the world climate talks.

The narrowed-down bill would hold BP Plc accountable for the oil spill in the Gulf of Mexico and seek to prevent similar disasters, Reid said last week.

It will very likely include provisions to force companies to dole out more money to cover the costs of oil spills. The liability cap, which is currently $75 million, will likely be raised to $10 billion or more. One Senate committee passed a bill last month to lift all caps on liabilities.

The bill will also contain incentives to convert trucks to run on natural gas and to increase energy efficiency.

Analyst Kevin Book of ClearView Energy Partners LLC, said he expects the energy efficiency measure known as Home Star to include $5 billion in incentives for plugging window leaks and insulating attics.

The natural gas trucks incentives could cost the government $4.1 billion, compared to the $19 billion price tag for an earlier bill that had been endorsed by energy tycoon T. Boone Pickens, Book said.

To pay for these measures, lawmakers may consider raising taxes on the oil and gas industry.

“One possibility would be to raise the Oil Spill Liability Trust Fund tax from 8 cents per barrel to 49 cents per barrel, which would raise approximately $18 billion,” said analyst Whitney Stanco of the Washington Research Group.

This fund, created in the aftermath of the Exxon-Valdez accident, helps pay claims for financial or property losses caused by oil spills.

Many expect the bill to pass as lawmakers may be eager to take action on the oil spill ahead of the elections.

Interest groups are lobbying to get measures boosting various energy sources attached to the bill. Environmentalists and clean energy advocates, in particular, are pushing to add a renewable power mandate, saying that without such measures, China would surpass the United States in alternative energy. But it’s unclear whether the groups have the support to accomplish this.

Investing Research

(Reporting by Timothy Gardner and Ayesha Rascoe; Editing by Eric Walsh)

Senate Democrats to introduce energy bill