Concessions Lead to New Support for Climate Bill

Oil companies back Kerry-Graham cap-and-trade proposal, which would exempt manufacturers on cap of greenhouse gases until 2016.

The manufacturing sector would not face a cap on greenhouse gases until 2016, under newly revised emissions legislation working its way through the Senate that has made heavy concessions to the needs of U.S. business.

The nation's largest providers of electricity, along with three of the most powerful U.S. oil companies, will reportedly endorse the proposal which will be introduced Monday by Sens. John Kerry (D-Mass.), Lindsey O. Graham (R-S.C.) and Joseph I. Lieberman (I-Conn.).

The business community has been largely wary of any form of emissions legislation, which has seen the oil industry loudly denounce the proposal through ads run throughout the country on multiple mediums. But the Senate appears to be moving closer to supporting the climate bill after the three senators made inroads with the business community through a series of heavy concessions to the manufacturing, oil, and agriculture sectors.

The Edison Electric Institute (EEI), the largest utility industry group in the U.S., has already announced its support. Kerry has not yet named which three oil companies are supporting the bill, but the Washington Post quotes a source as saying Shell, BP and ConocoPhillips will back the climate measure.

Winning the backing of the business community became a chief priority, said Graham.

"The goal is to have the business community come forward and say, 'This is a better solution to the (Environmental Protection Agency),'" he said.

According to Kerry, the bill would take effect in 2013 and by 2020 cut U.S. greenhouse gas emissions 17% compared to 2005 levels, and 80% by 2050. Some of the more business-friendly components include removing the EPA's authority to regulate carbon dioxide under the Clean Air Act, and the states' authority to set tougher emissions standards than the federal government.

Agriculture would be entirely exempt from the cap on carbon emissions, while the manufacturing sector would not be included under a cap on greenhouse gases until 2016. Also important is that there would be no fee -- or "gas tax" -- on transportation fuels.

The bill would reportedly provide government loan guarantees for the construction of a dozen new nuclear power plants, along with at least $10 billion to develop technologies for capture and storing emissions from coal-fired power plants.

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