Senate Democrats poised to start energy bill

With the gulf oil spill creating political opportunity, Senate Democrats will begin crafting a sweeping energy bill this week that could include a first-ever, though more modest, cap on global-warming pollution, believing they must act now despite differences within their ranks and political jitters in an election year.

Instead of regulating all sources of greenhouse gas emissions as originally proposed, lawmakers are considering placing a carbon cap initially only on utility companies. That idea was once dismissed by environmentalists as too incremental, but now is seen by some as better than no cap at all.

President Obama will meet Tuesday with a bipartisan group of senators to push for a new energy policy. “We are prepared and ready to move forward on a new energy strategy that the American people desperately want but for which there’s been insufficient political will,” Obama said recently. “It is time for us to move to a clean-energy future.”

With political will running short before the midterm election, the Senate has shown little appetite for a broader, economy-wide climate change bill as passed by the House almost exactly one year ago.

Even a more modest carbon cap remains difficult for senators wary of another ambitious government program at a time of voter unrest over Washington’s reach.

A broad carbon-pricing system would essentially require power plants, manufacturers and transportation industries to limit the pollution that scientists say is causing climate change and would tax entities that exceed their caps.

Republicans dismiss such a cap-and-trade system as a new tax on households and business — “cap-and-tax,” they call it. With the Democrats’ 59-member caucus intensely divided on energy issues, crossover support from Republicans would be needed.

Still, a majority of Democrats appear willing to risk legislative failure, believing a robust summer discussion on energy would establish a stark contrast between the parties before the fall election.

Tackling energy legislation gives Democrats a strategy they believe resonates with voters — though one that would expose them to GOP taunts over higher taxes, a fight Republicans would relish.

“If we spend our time always worrying about that 60th vote, we never get to do anything in a strong position,” said Sen. Mark Begich (D- Alaska).

A group of senators is expected to meet this week to begin crafting legislation that could come to the floor in mid-July.

Legislative realists know the complications of passing an energy bill. It often takes years of tortuous negotiations as lawmakers split along regional rather than partisan lines. Any cap on carbon emissions draws fierce opposition from coal-state lawmakers and those from states with manufacturing industries that could be taxed for emissions.

“We have to get to the 60 votes, but it’s not going to happen, I think, without the public really weighing in a major way — and we need Republican votes,” said Sen. Dianne Feinstein (D-Calif.).

The bill is likely to be a broad collection of provisions, including some in response to the gulf spill that would increase the liability caps on oil companies and impose tougher environmental and safety rules on offshore drilling.

The legislation is also expected to include new requirements that utilities generate more electricity from wind, solar or other renewable sources, as well as stricter efficiency standards for appliances and buildings.

Key will be whether the bill includes a cap on carbon emissions — a long-sought Democratic goal. Corporate executives who are usually regulation-averse have pushed Congress to act, preferring legislation to what they see as inevitable regulation coming from the administration, as the Environmental Protection Agency begins to regulate carbon next year.

Sen. Joe Lieberman (I-Conn.), an architect of broader climate change legislation, believes a cap on the utility industry alone “would be a significant step forward.”

Key Republicans have given the proposal currency by indicating they could be open to such an approach. “I’m willing to look at it,” said Sen. Judd Gregg (R-N.H.), who plans to attend Tuesday’s White House meeting.

Several Democratic senators have urged their colleagues to steer away from any carbon-pricing mechanism and focus on a narrower — but still weighty — bill that reduces foreign oil dependence by developing cleaner energy sources and increasing efficiency standards.

“That’s the basis for legislation that can pass,” said Sen. Kent Conrad (D-N.D.).

Senate Majority Leader Harry Reid has indicated the need for Obama to engage fully on the issue that is one of the top remaining items on his domestic agenda.

“I think it’s pretty clear we have to do something,” Reid said last week. “The question is what do we do, and a lot of that depends on what the White House is going to do to help us get something done.”

lisa.mascaro@latimes.com

richard.simon@latimes.com