Washington (Platts)--14May2009

US House Energy and Commerce Committee Chairman Henry Waxman and
committee member Rick Boucher, a Virginia Democrat, on Thursday said committee
Democrats had largely reached agreement on a compromise climate-change bill
designed to win the support of committee Democrats representing coal-producing
and energy-intensive districts.

      In a news conference in Washington, Waxman said he is confident his
committee will approve the measure, which would cut US greenhouse gas
emissions 83% below 2005 levels, by 2050, sometime next week. The panel is
scheduled to begin meeting Monday to debate amendments to the legislation.

      Although some issues, including how many carbon emission allowances
should be given to the oil refining sector, are still in negotiations, the
lawmakers made clear that agreement had been reached on a broad range of
issues.

      Boucher and Waxman, who earlier this week said the revised bill would
give the US electric power sector 35% of total greenhouse gas emissions, said
negotiators had agreed to a gradual phaseout of free allowances beginning in
2026. Under the proposal, the power sector would have to buy all of its
emission allowances through auction, beginning in 2030.

      In addition, Boucher said the modified bill would make available $1
billion a year to fund the development and deployment of carbon sequestration
and capture technologies at coal-fired power plants and would provide up to
$100-billion-worth of "bonus allowances" to generators to encourage the
deployment of CCS technologies.

      Further, the bill would require that all coal plants built after 2025 be
equipped with CCS technology and states that any coal-fired plants built after
January 1, 2009, be retrofitted with CCS systems. 

      The revised bill retains language in the original draft that would keep
an annual 2-billion metric ton cap on carbon offsets and the choice to buy
offsets generated in the US or abroad. The new version, however, would allow
emitters to buy offsets generated abroad of up to 1.5 billion mt/year, up from
1 billion mt/year under the draft, while the cap for US-generated offsets
could fall to 500 million mt/year.  

      Boucher, who led moderate committee Democrats in seeking changes to the
draft bill offered in late March by Waxman, a California Democrat, and Energy
and Environment Subcommittee Chairman Ed Markey, a Massachusetts Democrat,
said while the compromise is not all that he had hoped for, he is committed to
supporting the measure.

      He added, however, that he does not have firm commitments of support
from other committee Democrats from coal or manufacturing districts.

		--Cathy Cash, cathy_cash@platts.com