The Rising Influence of Rising Affluence

[DewDiligence]

‘Cap & Trade’ Is Dead, Says Harry Reid

[Yeehaw—I thought ‘cap & trade’ was one of the dumbest legislative initiatives ever to be broached by the US Congress. Regrettably—and independently of the demise of cap & trade—the possibility of a government incentive to foster the use of natural gas in place of oil appears to be faltering.]

http://online.wsj.com/article/SB10001424052748703467304575383373600358634.html

›JULY 22, 2010, 4:21 P.M. ET
By STEPHEN POWER

WASHINGTON—The U.S. Senate is shelving efforts to pass legislation that would limit emissions of heat-trapping gases linked to climate change, dealing a major blow to one of President Barack Obama's top priorities.

Senate Majority Leader Harry Reid (D., Nev.) said Thursday that neither he nor the White House had persuaded 60 senators to support even a limited proposal seeking to restrict emission from electric-power companies. Mr. Reid offered no timetable for action on such a bill, but said Democrats would continue trying to build support for such legislation.

Mr. Reid said the party's leadership will push instead for more limited legislation, aimed at holding oil giant BP PLC "accountable" for the Gulf of Mexico oil spill. Specifically, he said the measure would include a provision to remove the cap on economic damages paid to residents and small businesses by oil companies after oil spills. Mr. Reid said the bill would also include incentives to encourage the production and purchase of vehicles fueled by natural gas, and to fund various land and water-conservation programs.

"This is what we can do now," Mr. Reid said. He blamed the Senate's failure to enact limits on greenhouse-gas emissions on Republicans, even though some members of his own party have for months objected to the idea.

"We are not putting forth this bill in place of a comprehensive bill" to limit emissions, Mr. Reid said. "But we will not pass up the opportunity to hold BP accountable, lessen our dependence on oil, create good-paying American jobs and protect the environment."

Republicans rejected Mr. Reid's effort to blame them for the political failure of the cap and trade proposal. "His own party doesn't support the idea," said Robert Dillon, a spokesman for Sen. Lisa Murkowski (R., Alaska).

Mr. Reid's decision to shelve a vote on greenhouse-gas emissions risks disappointing the party's liberal base ahead of fall elections that are already expected to be difficult for the party.

It's not clear how many of the provisions that Mr. Reid is promising to include in the bill will survive a Senate floor debate. Republicans have objected to proposals to eliminate the cap on oil companies' liability for damages related to spills—currently set at $75 million—on the grounds that it would make offshore drilling unaffordable for all but the largest oil companies and foreign-owned nationalized oil giants.

Some business groups are also rallying to defeat the provisions related to natural gas.

On Thursday, hours before Mr. Reid spoke to reporters, more than five dozen trade groups and corporations representing farmers and manufacturers—including Dow Chemical Co., the National Corn Growers Association and Kimberly-Clark Corp.—released a letter calling on the Senate not to include any provisions in energy legislation that would "artificially" increase demand for natural gas in the power and transportation sectors—an apparent reference to Mr. Reid's support for tax breaks for purchasers of natural-gas vehicles and incentives to build natural-gas fueling stations.

Those provisions have been championed by some natural-gas producers, who have pointed to the growing domestic discoveries of natural gas as evidence that natural gas can provide the U.S. economy with a "bridge fuel" from oil to lower carbon sources of energy. In their letter Thursday, however, the corporations and farm groups said they worry such incentives—along with potential new state and federal regulations on shale drilling—could result in a supply crunch, causing higher electricity prices and the shift of more domestic manufacturing jobs to foreign countries.‹