Washington (Platts)--5Mar2009

The chairman of the US Senate Energy and Natural Resources Committee said
Thursday that it is unlikely the Senate will pass a climate-change bill that
includes auctioning 100% of greenhouse gas emission credits.

New Mexico Senator Jeff Bingaman, the top Democrat on the committee,
declined to say what percentage of credits would likely be proposed for
auction, but said it was under discussion.

"To have 100% auction of allowances from the first day of a cap-and-trade
system being in effect, I do think it runs the risk of causing substantial
increased burdens on some utilities, some emitters," Bingaman said at a Platts
Energy Podium event in Washington. "I just don't know that you can properly
buffer that without some allocation of allowances in ways other than
auctioning."

Bingaman did say, however, that he thought a bill that would institute a
system to cap carbon dioxide emissions and trade the rights to those emissions
would pass the Senate.

President Barack Obama in his fiscal 2010 budget outline called for an
auction of 100% of the rights to emit carbon dioxide. He estimated it would
mean $646 billion over the next 10 years for the government.

Although the details are still to be worked out, it is expected that a
cap-and-trade bill will reach the Senate floor this year, but resistance from
business sectors and some lawmakers make its passage far from certain.

--Derek Sands, derek_sands@platts.com