By Richard Cowan and Timothy Gardner
WASHINGTON (Reuters) - Senator John Kerry ratcheted up the fight to pass legislation to combat global warming on Wednesday, unveiling a bill as the Gulf of Mexico oil disaster complicates the measure's already slim chances of passage.
Kerry, a Democrat, and Senator Joseph Lieberman, an independent, took the wraps off their bill, but a Republican supporter was conspicuously absent.
Most of the details of the bill, which aims to cut planet-warming emissions in the United States by a modest 17 percent in the next decade, already have been leaked.
Republican Senator Lindsey Graham, who helped write the bill but withdrew from talks over the immigration reform debate, did not attend the ceremony.
Graham, in a statement, reiterated that he does not think this is the time to press on a climate bill because of the oil spill and talk of moving ahead on immigrations reform.
The bill still has provisions to encourage offshore drilling but would allow U.S. states to prohibit offshore oil activity within 75 miles of their coasts.
But that may not be enough to win drilling opponents from coastal states as concerns mounts over the gushing oil well in the Gulf of Mexico.
For Kerry and Lieberman to succeed this year, they will have to win over a group of moderate Democrats and Republicans who have voiced reservations about the bill.
One of those senators, Republican Richard Lugar of Indiana, told Reuters on Wednesday he would not join their effort.
"No I don't," Lugar said when asked whether he envisioned backing Kerry-Lieberman. Instead, Lugar said he would offer his own ideas in separate legislation sometime soon.
The White House on Wednesday promised to work to pass the bill into law. But it is unclear if Obama is willing put the same kind of political capital behind the climate bill as he did for healthcare legislation earlier this year.
Without a big White House push, the bill faces slim chances this year with the already clogged congressional schedule that includes dealing with bank reform and a Supreme court nomination.
Mid-term elections later this year also will distract many lawmakers from focusing on legislation that could boost prices for gasoline and electricity in coming years.
POLITICAL TOXIN
The bill includes provisions for boosting nuclear power and offshore drilling in order to help win votes from states where the economies depend on energy production. Earlier versions of the legislation relied more on boosting alternative energy.
"The Gulf of Mexico spill has turned offshore drilling -- an issue that once greased the wheels of the grand bargain -- into a political toxin," said Kevin Book, analyst at ClearView Energy Partners.
Many utilities with big investments in low-carbon nuclear power, natural gas or wind and solar power hope to benefit from a crackdown on greenhouse gases.
Utilities such as FPL Group, Duke Energy and Exelon have lobbied alongside environmental groups for the climate bill as has General Electric, a manufacturer of clean coal and natural gas systems for power plants and wind turbines.
"Enacting a strong federal clean energy and climate program will give business the certainty it needs to unleash significant investments that will create jobs and grow our economy," said Eileen Claussen, the president of the Pew Center on Global Climate Change.
The legislation would establish what has become known as a cap and trade system for reducing carbon pollution by electric utilities and factories.
Starting in 2013, electric power utilities would have to obtain pollution permits, initially provided for free by the government and then changing to full auctions by 2030, according to Senate aides.
The permits could be traded on a regulated market.
Aides, who asked not to be identified, said the permits would be allocated to utility companies based on a formula of 75 percent related to their emissions and 25 percent on their deliveries.
That's a revision from a previously considered 50-50 formula that polluting coal-fired utilities complained was unfair. But the formula could bring a backlash from environmentalists.
William Snape, senior counsel for the Center for Biological Diversity, said, "Those ratios of allowances do nothing to ameliorate global warming." He added, "Industry is getting exactly what it wants" with the legislation, at the expense of the environment.
The legislation also allows U.S. polluters to participate in an "offset" program to help with overall carbon reduction. They would get credit for some emission-reductions if they helped out with other projects, such as protecting more grasslands, helping capture emissions from coal mines and landfills and other activities.
Up to two billion tons in offsets each year would be available with 75 percent aimed at domestic programs and 25 percent for international environmental efforts.
International projects could rise to 1 billion tons if sufficient domestic projects are not identified, according to Senate aides.
(Editing by Russell Blinch and Vicki Allen)
