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Senate energy bill focuses on oil spills, clean alternatives

By the CNN Wire Staff
  • The Senate will consider a scaled-back energy bill
  • The proposal focuses on oil spill clean-up and improving U.S. energy efficiency
  • To try to gain Republican support, the bill lacks a cap on greenhouse gas emissions
  • President Obama calls the proposal a first step toward major reform

Washington (CNN) -- A proposed Senate energy bill unveiled Tuesday would increase the liability of oil companies in the event of spills and provide incentives toward more energy efficient homes and greater use of vehicles powered by electricity and natural gas.

The draft proposed by Senate Majority Leader Harry Reid, D-Nevada, is a compromise that has dropped major provisions in a House bill passed last year, including a cap on greenhouse gas emissions that contribute to climate change.

Senate Democratic aides who gave a background briefing to reporters said Reid needed to scale back the energy bill to have any chance of getting Republican support that is necessary to pass the measure in the Senate.

President Barack Obama called the trimmed-down Senate proposal "an important step forward" toward his goal of comprehensive energy reform that he says is necessary to reduce U.S. dependence on fossil fuels and make American industry more competitive in a changing global energy environment.

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"I intend to keep pushing for broader reform, including climate legislation, because if we've learned anything from the tragedy in the Gulf, it's that our current energy policy is unsustainable," Obama said.

White House Press Secretary Robert Gibbs, meanwhile, said Senate passage of an energy bill would set up a conference committee with the House to forge a compromise measure based on the proposals passed by each chamber.

Asked if he believed a conference committee could produce a comprehensive bill closer to the House version rather than the limited Senate proposal, Gibb said: "I certainly wouldn't rule it out."

Reid's proposal, which he hopes to get passed before the Senate goes on its August recess next week, would hold oil companies responsible for damages from spills, increase home energy efficiency, create jobs through investments in clean energy, bolster water conservation funding and promote greater use of vehicles that run on electricity and natural gas, according to Senate Democratic aides.

Its provisions in response to the Gulf oil disaster are similar to proposals under consideration in the House, including elimination of the cap on damages paid by oil companies responsible for spills, including BP for the Gulf catastrophe.

According to the Senate Democratic aides, the total cost of the bill is $15 billion, which would be offset by an increase in the per-barrel tax paid by oil companies to the Oil Spill Liability Trust Fund that pays for spill clean-up and recovery costs.

Other provisions in the proposal would increase government authority to oversee oil spill responses, provide grants for oil pollution research and assess an inspection fee to pay for a stronger inspection system of offshore oil rigs.

It also would fund the Land and Water Conservation Fund used to acquire important natural resources such as Cape Cod National Seashore for five years.

Unlike the House bill, the Senate proposal lacks a cap-and-trade system, in which a price is set for greenhouse gas emissions such as carbon dioxide, and polluters can obtain and trade credits for emissions over a set threshold.

Republicans, along with oil and coal producers, oppose a cap-and-trade system as an unnecessary burden on the energy sector, but supporters say it is the best way to start to reduce the nation's dependence on fossil fuels.