Senate energy bill faces job-creation doubts

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Long-awaited legislation designed to reduce fossil-fuel use, curb carbon emissions and impose tighter restrictions on offshore drilling was introduced in the Senate on Wednesday, although the bill faces scrutiny from Republicans and moderate Democrats concerned about its economic impact.

Promises that the bill — authored by Sens. John Kerry and Joe Lieberman — would add a significant number of energy-related jobs also has come under question, most notably by the independent Congressional Budget Office.

Mr. Kerry said the so-called “American Power Act” would convert the nation’s energy policy “from a national weakness into a national strength.”

“We can finally tell the world that America is ready to take back our role as the world’s clean-energy leader,” the Massachusetts Democrat said. “This is a bill for energy independence after a devastating oil spill.”

The Senate bill, which had been months in the making and involved hundreds of meetings, aims to cut by 2020 carbon dioxide and other heat-trapping greenhouse gases by 17 percent below 2005 levels, and more than 80 percent by 2050. It also would set a price on carbon emissions for large polluters such as coal-fired power plants.

The bill calls for a single set of rules for achieving greenhouse-gas-emissions reductions instead of a patchwork of state and federal regulations. States wouldn’t be allowed to operate their own “cap and trade” emissions-trading programs.

It would allow coastal states to opt out of federal drilling up to 75 miles from their shores — a concession to lawmakers worried about offshore drilling accidents in the wake of the Gulf of Mexico oil spill.

States could veto drilling plans of neighboring states if the Interior Department determined that a leak could cause a significant economical and environmental negative impact.

Those states that go ahead with offshore drilling would retain 37.5 percent of the federal revenue generated. Currently, royalty revenue goes to the Treasury Department, with states getting nothing.

More than $6 billion annually would be dedicated for transportation-infrastructure improvements, a move designed to increase travel efficiency and decrease oil consumption. And billions of dollars in incentives would be available for alternative energy sources such as so called “clean coal” and nuclear power.

The measure is designed to help average Americans, with two-thirds of all revenues not specifically dedicated to reducing the deficit being rebated back to consumers through energy-related bill discounts and direct rebates.

Supporters say a fundamental difference between the bill and previous energy and climate proposals is the scope that it would create jobs and stimulate the economy, which Mr. Lieberman said “will strengthen our national security.”

But a recent CBO study casts doubt on the measure’s job-creating potential. The May 5 report, which analyzed how policies to reduce greenhouse-gas emissions could affect employment, concluded that total employment during the next few decades “would be slightly lower than would be the case in the absence of such policies.”

The report, which didn’t specifically take the Kerry-Lieberman bill into account, said job losses in industries that shrink would lower employment more than job gains in other industries that would increase employment, thereby raising the overall unemployment rate.

The CBO, however, did say that most workers who lost jobs would find new ones.

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