Harry Reid: Senate will abandon cap-and-trade energy reform

Senate majority leader Harry Reid said Thursday that Democrats faced too much Republican opposition to pass a comprehensive cap-and-trade energy reform bill. The Senate will pursue a scaled down version.

After weeks of intense negotiations, Senate majority leader Harry Reid (D) of Nevada announced Thursday that comprehensive energy reform meant to address climate change could not be passed before the August break.

The third leg of President Obama's domestic agenda – after health care and financial reform – energy reform is the last to come before the Senate, although in a more limited form than the game-changing overhaul the White House promised. Senator Reid said he'll take a scaled-down version of the legislation to the floor as early as next week.

In a bid to win Republican support, Democrats will drop proposed controls on greenhouse gas emissions in favor of more limited measures that have attracted bipartisan support in the past. These include: lifting the liability cap to hold BP accountable for the Gulf oil spill, decreasing dependence on foreign oil, boosting incentives to create up to 400,000 green jobs, and expanding funding for land and water conservation.

"This is not the only energy legislation we are going to do; this is the energy legislation we can do now,” said Reid. “I had to make a decision. Here’s the decision I made.”

In the end, Senate Democrats simply ran out of time. For months, a bipartisan team of Sens. John Kerry (D) of Massachusetts, Joseph Lieberman (I) of Connecticut, and Lindsey Graham (R) of South Carolina had been working with industry leaders and other stakeholders to draft a broad bill to limit carbon emissions, boost incentives for green energy and nuclear power, and expand offshore drilling.

But the Gulf oil spill sunk prospects for a key Republican demand to expand offshore drilling. Senator Graham dropped out of the talks – citing the changed political climate – and no Republican emerged to take his place.

“In order to pass comprehensive legislation, you have to have 60 votes,” said Senator Kerry. “To get 60 votes, you’ve got to have Republicans. As of today, we don’t have one Republican."

The Senate Energy and Natural Resources Committee has had a clean energy package on track for more than a year, with bipartisan support. The Environment and Public Works panel has also produced draft climate change legislation, but with no GOP support.

“The Senate is very likely to take up those pieces, and it’s quite possible that that will be the vehicle for some narrow carbon reduction legislation,” says Melinda Pierce, the Sierra Club’s deputy director of national campaigns. “The decision to go with a narrower package clearly reflects the limited timetable left before the Senate adjourns for August recess.”

Still, the move disappointed environmental groups, who had pushed the Senate to match the sweeping climate change legislation that narrowly passed the House in June 2009.

“Senate Majority Leader Harry Reid today delivered very bad news to the American people. Continuing obstructionism by the Senate Republican leadership, joined by a handful of Democratic senators, is still blocking the way forward on essential clean energy and climate legislation,” said David Hawkins, director of climate programs at the Natural Resources Defense Council. “Over the recess we must deliver a message to senators: ‘Do your job! …. Don’t come home again without having tackled these real and present dangers.' "

On the House side, Speaker Nancy Pelosi is taking heat from members in conservative districts. They are worried about losing votes in November over far-reaching climate change legislation, even though the Senate isn't taking up the House's more comprehensive version of the bill. Members will still probably face hostile campaign ads based on their votes.

“The Speaker hopes that the Senate soon moves forward with the strongest possible package, so that the House and Senate can go to conference,” says Ms. Pelosi's spokesman Drew Hammill, after today’s announcement.

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• Obama speech on BP oil spill a call to action for clean energy