Climate-Change Bill Won't Have `Linked' Oil Fee, U.S. Senator Graham Says

U.S. Senator Lindsey Graham, a South Carolina Republican, said new climate-change legislation won’t include a so-called linked fee on oil-related emissions or any measure that could be viewed as a tax on gasoline.

“There won’t be a gas tax,” Graham told reporters in Washington today. “We are trying to find a way to get the transportation sector covered in the most business friendly manner and the linked-fee idea is not going to be in there.”

The fee’s removal from the draft legislation underscores the difficulty in crafting a climate-change measure that can win the support of a majority of senators. As recently as last month, Graham said the bill would call for oil companies to pay fixed emission fees tied to a proposed carbon-trading market, also known as a cap-and-trade program.

Graham, along with Senators John Kerry, a Massachusetts Democrat, and Joseph Lieberman, a Connecticut independent, are trying to craft compromise legislation to cap greenhouse gases blamed for global warming. The trio has spent months seeking support from both Democratic and Republican lawmakers, environmentalists and businesses including in the oil industry.

“Now I know why no one has done this before,” he said, referring to previous unsuccessful attempts by Congress to pass climate-change legislation.

McCain’s Nuclear Component

Senator John McCain, an Arizona Republican and co-author of prior global warming bills, said today that he doesn’t believe the new climate measure will include adequate measures to promote nuclear power.

“From what I’ve heard there is no meaningful nuclear component,” McCain said in an interview. “I’ve repeatedly said I would not support any proposal that didn’t have a robust nuclear power component.”

Graham said such concerns are unwarranted.

“No Republican who looks at this can be disappointed in the nuclear provisions,” he said. “They are the most robust I’ve seen and I think it’s the crown jewel of the entire exercise.”

The legislation, which the senators may formally unveil on April 26, also includes more money toward federal loan guarantees for construction of new nuclear power plants, Graham said. President Barack Obama has proposed in his fiscal 2011 budget to triple an Energy Department loan-guarantee program for new reactors to $54.5 billion.

‘This Is Tough’

While Lieberman told reporters yesterday that the climate bill would be released April 26, Graham today said that he is hopeful the measure will be ready.

“We don’t know yet, but I hope so,” Graham said. “This is tough,” he said.

Senator Sherrod Brown, an Ohio Democrat, said today that made-in-America requirements had to be in the new compromise measure. He didn’t elaborate.

Brown was among senators who earlier this month sent a letter to Graham, Kerry and Lieberman stating that the climate- change legislation must include provisions aimed at creating U.S. jobs and boosting U.S. manufacturing competitiveness worldwide.

To contact the reporter on this story: Kim Chipman in Washington at kchipman@bloomberg.net.

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