By Timothy Gardner
WASHINGTON (Reuters) - U.S. senators crafting a compromise climate change bill have held months of meetings with oil, coal and manufacturing interests, but so far have failed to gain the ironclad words of support many think will be necessary for passing legislation.
Senators John Kerry, a Democrat, Lindsey Graham, a Republican, and Joseph Lieberman, an independent, are set to release the bill on Monday after collaborating with industry groups, companies, and environmentalists to find a workable compromise.
Industry associations such as the American Petroleum Institute and the National Mining Association will not say whether they support the bill because they say they have not seen it.
But many of the details likely to be included in the bill have been revealed by sources and industries said they vehemently oppose parts of it, or will not support the bill unless it takes further steps to protect their businesses.
President Barack Obama, who has made climate and energy one of his top priorities, has said the business community should voice its support for climate legislation to lawmakers.
And the senators say they are making progress in winning votes. "I'm cautiously optimistic," Graham told reporters on Tuesday.
But analysts say the trouble is that getting the many facets of climate legislation in the right places is comparable to the skill needed to solve a Rubik's Cube puzzle -- move one set of items the wrong way and the lawmakers you thought you had lined up are out of place -- and good luck getting them back.
"The senators are cobbling together a compromise framework, but concessions to one group of senators could mean the lost votes of others, making it unlikely they will secure the 60 votes required for passage," said Divya Reddy, an analyst at the Eurasia Group in Washington.
OFFSHORE DRILLING
The most contentious issue is offshore oil drilling. The bill will likely include drilling incentives to help win support from the oil industry and votes from Republican lawmakers. But the idea, even if limited to states in the South, is opposed by many Democrats including Senators Robert Menendez and Frank Lautenberg, both from New Jersey.
If offshore drilling is included, another battle would ensue between lawmakers from coastal states who want their districts to reap revenues from energy production, while lawmakers from interior states would cry foul.
Lou Hayden, of the API, said his group wants the bill to block state and Environmental Protection Agency climate regulations, which will likely be included in the legislation. But Big Oil also wants to be shielded from lawsuits protecting endangered species or so-called nuisance suits like one claiming that industry emissions are helping to cause erosion in a coastal Alaskan town.
But such a move could potentially cause lawmakers with close ties to trial lawyers drop their support.
For certain, the entrenched positions of some lawmakers may loosen up if the trio of senators strikes the right set of solutions.
But the harder they try to fix things the more bones of contention may be revealed. Some oil companies are open to a transportation fee on fuels that would pre-empt cap-and-trade on refineries. But many lawmakers would balk at the idea, which would likely see costs passed onto consumers.
"Gasoline taxes have never been an easy sell in Congress and there's no reason to believe that even moderate Democrats would be willing to back one, particularly in an election year," Reddy said.
Similar disagreements revolve around coal. Luke Popovich, a spokesman at the mining association, said one item likely to be in the bill -- an upper limit for the price of carbon in a system that would cap emissions from power plants -- would hurt power plants and manufacturing across 12 to 15 states.
But lowering that price ceiling could upset lawmakers from other states that produce or depend on natural gas, which emits half the carbon dioxide as coal does. Liberal lawmakers who want a high carbon price to jump-start new low-carbon energy like wind, solar, and nuclear, may also oppose capping the carbon price.
Another difficult example is a border tax supported by the industries such as steel and cement who want a fee applied to imports should exporter countries not agree to take tough actions against climate change.
But such a measure would be opposed by lawmakers afraid of stoking trade wars with China or India.
(Additional reporting by Richard Cowan; Editing by Lisa Shumaker)
