Energy and Climate Bill Includes Offshore Drilling

The U.S. Senate’s long-awaited energy bill, which will be officially unveiled Wednesday, would require utilities to begin paying for carbon dioxide emissions in 2013 and return two-thirds of the money to U.S. taxpayers to offset rising energy costs; it would also encourage the development of nuclear power with tax credits and other incentives and allow offshore drilling along new sections of the U.S. coast with certain restrictions and environmental safeguards.

The Senate bill, known as the “American Power Act,” limits entities that can trade directly in the carbon emissions permits to the utilities and, eventually, the factories that will be required to purchase the permits — a provision designed to avoid a speculative market in carbon trading.

With the impact of the Gulf of Mexico oil spill uppermost in their minds, the bill’s sponsors, Senators John Kerry of Massachusetts and Joseph Lieberman of Connecticut, are requiring states wishing to drill for offshore oil to submit to a federal study of the impact on neighboring states; affected states would have the right to veto the drilling project.

The Kerry-Lieberman bill aims to reduce CO2 emissions 17 percent below 1990 levels by 2020 and 80 percent by 2050.

The bill will eventually require 7,500 utilities, factories, and other major carbon emitters to purchase emissions permits, which will gradually become more expensive to stimulate reductions in CO2.

Article appearing courtesy Yale Environment 360.

photo: laura padgett

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