In the wake of the Gulf oil spill, Senate Majority Leader Harry Reid (D-Nev.) is pushing for a new, potentially wide-ranging energy bill. Before the accident, legislative handicappers were giving long odds on the Senate’s passing an energy measure this year. The desire in Congress to take action to prevent future offshore oil disasters now has improved those odds.

Harry Reid (D-Nev.)

Brad Penney, the Alliance to Save Energy’s government-relations director, says, “We’ve experienced a national tragedy with the catastrophe in the Gulf, and out of that tragedy there appears to be a positive ... the increased likelihood of the Senate doing a meaningful clean-energy bill this summer.”

In a floor statement on June 7, the Senate’s first day back in session after the Memorial Day break, Reid said, “The Senate must take definitive action to hold companies like BP accountable for disasters like the one that’s poisoning our waters and shores more and more every day.”

Four days earlier, Reid asked the chairs of eight Senate committees for recommendations by the July 4 recess on provisions to be contained in an envisioned energy bill. He outlined several possible elements, including more oil-company accountability for damages caused by their operations, an emphasis on renewable energy and tightening emergency-response and safety requirements for drilling in deep water.

Reid also indicated that he isn’t contemplating a drilling ban, saying the U.S. cannot afford to stop domestic oil production that is done “safely and responsibly.” Provisions directly aimed at offshore-spill issues seem to have a strong chance of being in the final package.

Penney says, “At the present time, we don’t know whether it will be a comprehensive clean-energy bill, as the Majority Leader is styling it, or whether it will be a comprehensive energy-and-climate bill.” One possible starting point is an energy bill the Energy and Natural Resources Committee cleared in June 2009. It includes renewable-energy, energy-efficiency and oil and gas drilling provisions. Also on the table is a climate-change measure proposed in May by John Kerry (D-Mass.) and Joseph Lieberman (I-Conn.) that caps greenhouse-gas emissions and sets up an emissions-allowance trading mechanism.

But Frank Maisano, an energy analyst with the firm Bracewell & Giuliani, says, “My bet and the bet of a lot of analysts ... is that it’s going to be a significant uphill climb for [lawmakers] to be able to achieve success on an energy bill that has cap-and-trade in it.” Kerry-Lieberman’s compromise balances cap-and-trade, which environmentalists want, with provisions supporting offshore drilling, which oil-and-gas supporters want. But the picture has changed. Maisano notes, “The oil spill has taken drilling off the table as a potential vote-getter for moderate Democrats and perhaps some Republicans.”