While the Senate seems unlikely to approve an energy bill during the few weeks it reconvenes before the November elections, it may consider measures on U.S. EPA climate rules, power plant pollution curbs and energy tax incentives.

Senate Majority Leader Harry Reid (D-Nev.) last week acknowledged that the Senate's chances of passing sweeping or even scaled-back climate legislation this year are dead, but he held out hopes for moving forward on a slimmed-down energy package. But amid election-year politics and an already-crowded legislative calendar, consideration may be punted until a lame-duck session.

Reid last week said small business legislation will top the chamber's agenda this month. And aides say such a move will leave little time for consideration of an energy bill before November.

"We are only in for a few weeks when we reconvene next week, and while we are still mapping out the schedule, energy legislation ... may have to wait for a lame-duck session," Reid spokesman Jim Manley said last week.

Still, Reid suggested last week that a narrow energy bill could see floor action before the election. "I think we should take a run at it," he said during a clean energy meeting in Las Vegas. "Even Washington is ready for that, so I'm going to try."

The energy bill will likely include incentives for natural gas vehicles and the "Home Star" energy efficiency retrofits program, two measures Reid has indicated he supports. Both measures were included in a slimmed-down energy and oil spill-response package that Democrats introduced just before recess, but that bill -- and a Republican counterpart -- were pulled from floor consideration after Democrats failed to find enough support for passage.

The bill also could include a provision establishing a renewable electricity standard (RES). Language establishing a national standard was once considered a shoo-in for a Senate climate bill, but hopes were quashed in July when leaders pulled the language from the scaled-back energy bill.

Reid backs such a provision, and Manley said last week that an RES was still a possibility for the fall.

Reid has also promised to bring oil spill-response legislation to the floor this fall, but Manley said that, too, likely won't happen until after the election.

Democrats began the year with high hopes of passing broad climate and energy legislation, similar to the bill that passed in the House last summer. But those plans were whittled away amid political pressures, and ultimately, the chamber punted on considering even an oil spill-response bill that many had seen as the bare minimum the Senate would consider this summer.

That measure addressed a number of issues in response to the BP PLC oil spill in the Gulf of Mexico, but language that would eliminate oil companies' liability in a spill caused a major sticking point for Republicans and oil-state Democrats and contributed to Reid's decision to pull the bill from floor consideration.

Sens. Mark Begich (D-Alaska) and Mary Landrieu (D-La.) offered up separate liability proposals as alternatives to Reid's language, and Reid indicated last month he is willing to compromise with the senators in crafting language.

Begich and Landrieu say their separate but similar proposals would ensure small- and mid-sized oil companies can continue to operate offshore.

Rockefeller looks to hamstring climate rules

With climate legislation likely off the table, opponents of the Obama administration's greenhouse gas rules are plotting efforts to handcuff EPA's climate regulations, while environmentalists gird to protect the agency's authority.

The most immediate challenge to EPA's climate rules is expected to come from Sen. Jay Rockefeller (D-W.Va.), who has said he will seek a vote this year on his bill that would block the agency from regulating stationary sources' emissions for two years. Rockefeller told reporters in July that Reid promised a vote on the measure before the November election.

Manley declined to comment Friday as to whether Reid would allow a vote on the bill. But Reid told reporters in June that he would hold a vote on the measure before the end of the year (E&ENews PM, June 16).

Reid promised the vote in order to siphon Democratic support away from a more sweeping resolution from Sen. Lisa Murkowski (R-Alaska), according to a Senate Democratic aide. Murkowski's resolution fell just four votes short of the 51 it needed to clear the chamber, and several moderate Democrats who voted against the measure said they favored Rockefeller's approach (E&ENews PM, June 10).

Rockefeller has six Democratic co-sponsors, including North Dakota Sens. Kent Conrad and Byron Dorgan, South Dakota Sen. Tim Johnson, Sen. Claire McCaskill of Missouri, Sen. Ben Nelson of Nebraska and Virginia Sen. Jim Webb. Rockefeller would need to win the support of at least 12 more Democrats in addition to 41 Republicans to push the measure through the Senate.

But if Rockefeller's bill comes up for a vote, several senators may bring up an alternative aimed at draining support from it.

Sens. Tom Carper (D-Del.) and Bob Casey (D-Pa.) for several months have considered offering a countermeasure to stymie EPA climate regulations. Their provision would be very similar to EPA's "tailoring" rule that would exempt small sources from EPA climate rules while allowing the agency to regulate the largest polluters, a Senate aide told E&E Daily in May (E&E Daily, May 18).

Casey said last month that he was not certain they would offer the measure if Rockefeller sought a vote, but we "certainly want to be prepared to drop our alternative if we think it would make sense."

Even if Rockefeller's measure passes, the White House has promised to reject it. "The president and the White House have been clear that they would veto any attempt to take away authority here," EPA Administrator Lisa Jackson told Bloomberg in an interview earlier this month.

Still, environmental groups are preparing to fight to keep EPA climate rules in place as a backstop for climate legislation.

"If Congress isn't going to take on climate change and then it starts focusing on eliminating or delaying one of the tools, that's taking us a step backward," said Joe Mendelson, director of global warming policy at the National Wildlife Federation. "There's no question that we'll fight every attempt to do that."

Carper to push air pollution bill

The Senate may also move forward this fall with legislation aimed at curbing conventional air pollution from power plants.

Carper (D-Del.) and Sen. Lamar Alexander (R-Tenn.) are co-sponsoring a bill that would mandate steep cuts in nitrogen oxides, sulfur dioxide and mercury from electric utilities over the next decade. Carper had pushed to have the measure included as part of broader climate legislation, but with slim prospects for that this year, Carper is pushing to move the bill on its own.

Carper hopes to move forward with a markup in the next few weeks. Environment and Public Works Chairwoman Barbara Boxer (D-Calif.) has promised a markup, but no date has yet been set, according to a Carper spokesperson.

"There are a number of us -- Democrats, Republicans -- who think if we can't pass carbon legislation, we'd very much like to address clean air legislation," Carper told reporters last month. "We're hearing encouraging signs and sounds from senators as diverse as Barbara Boxer and Jim Inhofe, so I'm encouraged that we may have the opportunity to get it done this year."

Another shot at tax extenders?

Another piece of legislation that may see action on the Senate floor this fall is the $30 billion package of tax extenders that failed to pass the Senate in June.

The package includes the research and development tax credit President Obama last week called on Congress to renew and to increase from its previous rate of 14 percent to 17 percent, at a cost of about $100 billion. It also includes a $1-per-gallon production tax credit for biodiesel and renewable diesel along with credits for energy efficiency, steel industry fuel and alternative vehicle fuel. Republicans blocked three previous iterations of the package earlier this year.

Senate Finance Committee staff previewed a slightly modified bill to industry officials earlier this month, although many details were left uncertain, including how to pay for the bill that would cost $30 billion over a decade. Likely to be included -- or even increased -- as an offset is a 49-cent-per-barrel tax hike on oil companies to raise funds for the oil spill liability trust fund, which pays for economic damages after the company's $75 million liability cap. The additional funds would alleviate the government from paying for most of any future spills, freeing up revenue to support other programs. Republicans argue oil spill liability fees should not be used to pay for anything else.

Chairman Max Baucus (D-Mont.) "knows how important the tax cuts included in the extenders package are to families, businesses and our economy, which is why he's always said he will continue working to get the package done this year," a committee aide said.

Reid's spokesman Manley said the tax extenders package would have to be brought to the floor on its own and not as an amendment to other legislative vehicles, so the measure's fate depends on whether Democrats can win any Republican support to reach the 60-vote threshold to break a filibuster.

The House passed its $115 billion version of the tax extenders bill last May, which included a 34-cent-per-barrel tax for the oil spill liability fund.

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