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Coal is winner even in ‘green’ Congress

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After two years of campaign rhetoric and months of hearings, Congress is set this week to begin testing whether it can turn the push for renewable energy sought by President Obama into reality.

But the result is likely to fall short of Mr. Obama's goals and, ironically, preserve the primacy of the most abundant and dirtiest fossil fuel: coal.

Lawmakers this spring plan to keep their distance from the president's most ambitious and controversial proposals, including a mandate for utilities to reduce greenhouse-gas emissions and the creation of a system to reduce such emissions called "cap and trade."

Yet they appear eager to appropriate billions of dollars for a little-tested technology that would prevent carbon dioxide from polluting the air by burying it underground, a process called "sequestration."

Coal - and the many parts of the country that rely on coal for power generation - would be the prime beneficiaries of such funding. The Senate Energy and Natural Resources Committee begins writing an energy bill Tuesday, and the chairman of the House Energy and Commerce Committee may unveil his proposal to address climate change on the same day.

Neither effort is likely to move Mr. Obama's policies as far as he wishes.

Senate Energy and Natural Resources Chairman Jeff Bingaman, New Mexico Democrat, intends to skirt for now the toughest energy-related issues. Those issues include the centerpiece of Mr. Obama's energy policy - a requirement that utilities provide 10 percent of their energy from renewable sources by 2012 and 25 percent by 2025.

Mr. Bingaman plans to ask his committee to approve measures that would update appliance energy standards and improve renewable-energy worker training. The committee is also expected to double over four years the federal energy research budget and seek help from private companies to build an electric car battery.

House Energy and Commerce Committee Chairman Henry A. Waxman hinted that he will have trouble rounding up the votes to pass the president's mandate. The California Democrat said his committee will have to find ways to limit job losses, especially in the industrial Midwest and in coal regions, even as it tries to restrain carbon-dioxide emissions. One of his hopes: to expand sequestration.

"We will need to make investments in new clean energy technologies, find ways to spur the development of carbon capture and sequestration, prevent the dislocation of industrial sectors including those vulnerable to trade, mitigate the effects on consumers, and assure that the costs of the program are economically sustainable," Mr. Waxman said in a letter co-signed by other senior members of his committee.

Karen Harbert, president of the U.S. Chamber of Commerce's Institute for 21st Century Energy, said regional worries about the impact of a renewable energy mandate present a "huge problem" that will drag out the energy debate for months.

"You have to take into account the economic dislocations and costs that will be borne by consumers, period," she said.

Mr. Obama also wants to expand the government's ability to build high-voltage transmission lines to bring renewable energy to consumers. He also wants a law mandating cuts in U.S. greenhouse-gas emissions by 80 percent by 2050, primarily through a proposed market that caps the overall level of emissions and allows companies to trade permits on such emissions.

Both proposals face major obstacles. A bloc of a dozen Democratic senators say they oppose Mr. Obama's cap-and-trade system, at least as currently configured. That's more than enough lawmakers to block progress in the Senate.

A leader of the group, Sen. Evan Bayh, Indiana Democrat, said a cap-and-trade system won't pass as long as it appears to transfer wealth from the Midwest to the coasts, imposes big financial burdens on utilities and their customers, and is not part of a worldwide effort to reduce greenhouse-gas emissions.

"If there's not some verifiable way to include the developing world, particularly China and India, then we'll go through all these changes and not offset global warming substantially," he said.

On the so-called "smart" power grid, Republicans and Democrats are largely united in support, yet some Republicans are skeptical about efforts to limit the new transmission lines' use to renewable energy.

Republican lawmakers are joining some Democrats in opposing an effort led by Senate Majority Leader Harry Reid, Nevada Democrat, to give the federal government the power to force localities to make room for the new lines, an idea that has angered several states.

Still, a consensus is growing among lawmakers in both parties that extra money should be allocated to help "clean coal" technology, which captures and buries carbon dioxide from power plants. Democrats from the Plains states and industrial Midwest, where mining and coal-fired electricity predominate, worry that a renewable energy mandate on utilities, combined with the cap-and-trade system, will damage their economies.

Rep. Rick Boucher, a Democrat from coal-rich Southwestern Virginia who chairs a key House Energy and Commerce subcommittee, wants to spend $10 billion to develop "coal capture" technology, an idea likely to make it into Mr. Waxman's bill.

Joe Lucas, a spokesman for the American Coalition for Clean Coal Electricity, said Mr. Bingaman still might win backing for a renewables mandate, called a "renewable portfolio standard," but only if it contains enough flexibility for coal-dependent utilities and more money for "clean coal."

"If a renewable standard gives utilities the right tool kit to meet the standard, then people are going to go for that," he said.

Environmentalists see the best opportunity in years to advance both renewable energy and climate-change legislation.

"We're very optimistic about a renewable energy standard being adopted this year," said Jim Presswood, an energy analyst at the Natural Resources Defense Council.

But the timing of major new legislation remains uncertain. Mr. Waxman does not foresee passing his bill until Memorial Day at the earliest, and the final word from Congress may not come until next year. In the Senate, the cap-and-trade system will not even be considered by Environment and Public Works Committee until late this year or early next year.

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