GOP Unveils Energy Bill Prioritizing Fossil Fuels, Nuclear

House Republicans Wednesday unveiled an alternative energy bill to the Democrats' climate legislation advancing in the chamber, a plan that largely focuses on domestic fossil fuel production and new nuclear power.

The minority's legislation is highly unlikely to gain traction in the House, but is meant to politically sabotage the opposition's energy and climate bill expected on the floor in July.

As the authors of the Democrats' plan to cut greenhouse gas emissions try to gather support among their colleagues, GOP lawmakers are highlighting what they believe are the weaknesses in their foes' bill.

"The Democrats cap-and-trade legislation amounts to an economic declaration of war on American families and small businesses," said Rep. Mike Pence, R-Ind., who heads a GOP task force on energy.

Besides renewing calls for expanded oil and natural gas exploration both on- and offshore, the Republican bill sets a goal to build 100 new nuclear power plants, makes permanent tax credits for renewable energy and creates additional credits to encourage energy efficiency. In stark contrast to Democratic policies, the GOP would allow new drilling in areas long closed to drilling off both the Pacific and Atlantic coasts, in the Arctic and allow oil-shale development in the midwest, where geologists estimate hundreds of billions of barrels of untapped petroleum lie underground.

Last month, the House Energy and Commerce Committee passed a bill that would establish a falling cap on emissions thought to contribute to global warming and create a market to buy and sell the right to emit. It also mandates new renewable energy and efficiency targets across the U.S., requiring utilities to provide an increasing amount of power from sources such as wind and solar.

In addition to the climate bill that leaves the oil industry as one of the few unprotected sectors of the economy, the Administration and Democratic leaders have delayed new drilling programs and are proposing to raise royalty rates and taxes on the petroleum industry.

Republicans, meanwhile, are hoping to capitalize on the current rise in energy prices and the potential for more public outcry like that seen last year when oil, natural gas and gasoline costs rose to record levels, kicking an economy already on the way down.

Although cost estimates of the Democrats' climate bill vary widely from a few cents a day to several thousand extra dollars a year for an average family, the GOP hopes that by pressing the fact that the cap-and-trade bill is likely to increase energy costs at all could undermine support for the proposal as it heads to the floor.

"You can debate the level of the wreckage, but you cannot debate...that you de-industrialize America as you know it," by passing the climate bill, said Rep. Joe Barton, R-Texas, the ranking member of the House energy committee.

Rather than penalize emitting industries and using command-and-control policies, the GOP say they want to create incentives for lower-emission technologies, a strategy they say would put less pressure on the economy.

A portion of the revenue from the fossil-fuel sectors would be diverted to a renewable energy fund, which would then capitalize new technologies.

But while Republicans want to encourage new nuclear power plants, saying it would cut greenhouse gases, there's no clear financial incentive for utilities to invest in nuclear generation rather than cheaper alternatives, such as coal-fired power plants.

Pence said, however, that if permitting regulations were streamlined, and once the next generations of reactors were approved, the standardization of nuclear power plants would cut the sector's costs.

Furthermore, McDermott International Inc.'s (MDR) Babcock & Wilcox Co. said Wednesday it could produce a new, smaller reactor module for less-than-traditional plants, potentially changing the competitive dynamics of nuclear compared to other types of generation.

Fundamentally, the difference between the Democratic and Republican approaches lie in the conviction of how much - or whether or not - human-generated greenhouse gas emissions are contributing to global warming.

Democratic leaders clearly are believers, while many in the GOP argue the debate within the scientific community isn't resolved. The Minority are counting on the average citizen to care more about their budgets than the potential for climate change.

-By Ian Talley, Dow Jones Newswires; [phone]; [e-mail];

(Siobhan Hughes contributed to this report)