Washington (Platts)--26Dec2007

A provision in the omnibus spending bill that the US Congress passed last
week and signed Wednesday by President George W. Bush requires the federal
Environmental Protection Agency to develop a "registry" for oil refineries and
other industrial facilities to use in reporting their emissions of carbon
dioxide and other greenhouse gases that are blamed for global warming.

The provision was inserted in the bill by Senator Dianne Feinstein, the
California Democrat who chairs the Senate Appropriations Subcommittee on
Interior, Environment and Related Agencies, which sets EPA's annual budget.

The Feinstein language provides EPA with $3.5 million in fiscal 2008 to
develop a draft registry rule within nine months and a final rule within 18
months. Mandatory emissions reporting would be required at "appropriate
thresholds in all sectors of the economy" as determined by EPA, according to a
congressional report accompanying the spending bill.

The provision requires both upstream and downstream reporting, meaning
oil and coal companies will have to report the carbon content of the products
they produce, and industrial plants will have to report the emissions they
release into the environment.

Currently, only electric utilities are required to report their GHG
emissions to EPA, though some other types of plants voluntarily disclose their
emissions to EPA and the Energy Information Administration, a branch of the
Energy Department.

The new registry provision in the funding bill is significant because it
could make it easier for Congress to later establish a mandatory
emissions-reductions program.

"It is the first step [to] a cap and-trade" regime, an aide to Senator
Amy Klobuchar, Democrat-Minnesota, said. Klobuchar tried unsuccessfully to
attach her own registry language to the comprehensive energy bill that Bush
signed into law last week. Her registry language also is the first title of a
global warming cap-and-trade bill sponsored by Senators Joseph Lieberman and
John Warner, which passed the Environment and Public Works Committee earlier
in December.

As momentum builds in Congress towards enacting a mandatory cap-and-trade
scheme, it becomes increasingly important to have a sound emissions-reporting
program in place before the cap is established, the Klobuchar aide said.

--Alexander Duncan, alexander_duncan@platts.com