U.S. Senate Democrats to introduce energy bill

* Bill to contain reforms on offshore drilling

* May have $4.1 billion in natural gas incentives

WASHINGTON, July 26 (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 (BP.L: ) (BP.N: )
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 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 Analysis

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

U.S. Senate Democrats to introduce energy bill