By Darren Goode

House Energy and Commerce Committee Democrats might be inching toward a
deal on climate and energy policy after staff continued talks through
weekend. The discussions "are now down to the member level," Rep. Gene
Green, D-Texas, said today. Green said he is meeting with Energy and
Commerce Chairman Henry Waxman perhaps Wednesday to try to cement deals
giving refineries credits in a cap-and-trade program and making sure a
low-carbon fuel requirement does not overlap with a renewable fuels
requirement in law. One lobbying source said Energy and Commerce
will meet Tuesday night to try to finish things. Another source said the
committee will release details of a bill Wednesday. That may mean the
of a markup, likely in the full panel, as early as Thursday. Committee
Republicans are not expecting more than opening statements before next

Waxman is trying to finish something in his panel before lawmakers leave
for the Memorial Day recess. Even if Waxman succeeds, there are issues
be worked out between his panel and Ways and Means and among Democrats
there regarding how revenue from auctioning any cap-and-trade emission
credits would be allocated. The details of an emerging deal have proven
be as speculative and tentative as the schedule this week and next.
sources off Capitol Hill said Waxman has agreed to drop a short-term
of reducing greenhouse gas emissions 20 percent by 2020 in a
program down to the 14 percent level President Obama and the
environmentalist-business U.S. Climate Action Partnership recommended.
Waxman and a slate of Democrats on his panel representing low-income
residents, as well as coal, manufacturing, oil and gas, and other
companies, have spent much of the time trying to divvy up free emission
credits to businesses in a cap-and-trade program. While the details may
still be in flux, several sources said they expect local electricity
distribution companies would receive between 35 and 40 percent of their
credits early on for free. These sources expect trade-sensitive and
energy-intensive industries such as steel, aluminum, chemical and glass
would get 12 percent for free. While less than the 15 percent of free
credits they were seeking, they would no longer have to adhere to an
energy-efficiency criterion to receive the free credits. The percentage
going to the oil and gas sector is unclear, with industry sources
as much as 4 percent and as little as 1 percent. The refinery industry
asked for 5 percent. A low-carbon fuel standard has holes left to be
filled, including what year should serve as the baseline and whether it
would be confined to the refinery industry or be made broader.

Waxman has also worked with committee Democrats on a renewable
production mandate. The remaining issues are the stringency of that
and which energy sources would be covered under it. The Blue Dog
Friday adopted an official caucus position on a mandate, saying it needs
include such low-carbon sources as nuclear, cleaner coal, biomass,
hydropower and heat generated from waste. These Democrats also say an
unrealistic mandate "will not help electric utilities deploy more
renewables more quickly," according to a position statement agreed to by
least two thirds of the group. While the Blue Dogs do not call for a
specific target, they say a mandate should account for regional
in renewable energy production as well as energy efficiency efforts.