Though I've been in the "conventional wisdom" camp that the U.S. Senate would not move on a climate bill this year, we are starting to see some actual movement in that direction through the proposal by Sen. John Kerry, D-Mass., Sen. Joe Lieberman, I-Conn., and Sen. Lindsey Graham, R-S.C.

Articles from Wednesday report the senators briefed some business groups on the proposal, which had eight separate titles to it: Refining, America’s Farmers, Consumer Refunds, Clean Energy Innovation, Coal, Natural Gas, Nuclear and Energy Independence.

Kind of interesting that they laid out some details to business people on St. Patrick's Day. Maybe they are counting on the luck of the Irish.

Reports stated that comparable to the House bill the proposal would reduce carbon emissions by 17 percent in 2020 and up to 80 percent by 2050. (The House bill passed last year went to 83 percent).

The bill also would supersede the EPA using the Clean Air Act to regulate emissions and ensure that it would only go after major emitters, those producing over 25,000 tons of greenhouse-gases per year.

Like a bill proposed by Sens. Maria Cantwell, D-Wash., and Susan Collins, R-Maine, the bill also would have a "cap-and-dividend" model which would include rebates back to consumers on the sale of pollution permits.

Carbon Content of Fuel

Reports from D.C. state that automobile fuel would increase because there would be a tax paid by consumers based on the carbon content in the fuel. This is a key element for biofuels, especially given the raging debate over indirect land-use change and factoring in the carbon content. The fight over just how much carbon is in corn-based ethanol or biodiesel versus gasoline or other fuels will become an even bigger debate if the federal government is trying to establish a carbon tax paid for by consumers at the pump.

If you don't think the low-carbon debate is both complicated and political, wait until you read DTN ethanol reporter Todd Neeley's pieces on this issue expected to be published next week.

Ag Offsets?

It's been clear from the get-go that there would need to be agricultural offsets even if there were no cap-and-trade plan. "Don't Cap Our Future" may turn into "Don't Cap Our Offsets." The Kerry-Lieberman-Graham bill sets a price collar for carbon offsets, in other words, a floor and a ceiling on the offsets. While details of the plan for specific sectors have not been released, it's likely that the bill relies on the language drafted last fall by Sen. Debbie Stabenow, D-Mich., for the agricultural section in the bill. Senate Agriculture Committee Chairman Blanche Lincoln, D-Ark., is involved in child nutrition and derivatives legislation, and also has been resistant to climate legislation.

Stabenow's plan last fall called for the EPA administrator and the agriculture secretary to “establish a program to govern the creation of credits from emission reductions from uncapped domestic sources and sinks” within one year of enactment of the bill. The draft also calls on EPA and USDA to jointly protect the integrity of the program, prioritize rulemaking for activities “that present the fewest technical challenges and greatest certainty of net atmospheric benefits” and make sure that requirements between the two agencies are consistent.

The Stabenow proposal also set USDA to “administer as the lead agency” the role of creating a list of eligible methodologies that can be used to reduce emissions, approving petitions and verifying emission reductions under practices going back to Jan. 1, 2001.

Stabenow’s bill also stated that “lifecycle greenhouse gas emissions associated with the production and use of biofuels, bioproducts and bioenergy are significantly lower than the emissions associated with the production and use of fossils.”

Renewable Power: Another major question is just where will this bill set a renewable energy standard? Will it increase over time as well?

I can be found on Twitter at chrisclaytonDTN