Last week, a bipartisan trio of senators this week began rolling out ideas for cutting greenhouse gas emissions and transforming the nation’s energy economy that departs from the economy-wide cap-and-trade structure of earlier legislative proposals.  Floated by Senators John Kerry (D-MA), Lindsey Graham (R-SC), and Joe Lieberman (I-CT), the idea has been met with interest by a number of their counterparts.

The legislation would set a national target for reducing carbon, expected to be a cut of 17 percent below 2005 levels by 2020.  Additionally, electric utilities would be subject to a cap on greenhouse gas emissions, but the transportation sector would be subject to some form of tax based on carbon content in fuels, according to people familiar with the negotiations.  Finally, a cap on emissions by manufacturers, with possibly a separate cap-and-trade program or some other system of regulation, may be phased in later. Provisions to promote nuclear power, “clean” coal technology and offshore drilling would be included as sweeteners.

Kerry, Graham, and Lieberman hope that this approach, which could allow for fine-tuning regulations within industries, might assuage the concerns of a core group of moderates from coal, oil and Rust Belt states whose support will be critical to moving a climate bill.

Mary L. Landrieu of Louisiana, who represents one of the nation’s biggest oil-producing states and often votes with Republicans on energy issues, said the proposal is “moving in the right direction and would address some of these refinery concerns and would address concerns of big business and small business and consumers.”

The bill is not without opposition, of course.  Senator George Voinovich (R-OH) is concerned with the details of the bill, some of which has yet to be released, particularly of any ideas for a mandate to cut carbon emissions.

Secretary Chu states that the budget will take a stance on three strategic priorities:

ENERGY: The Administration has set a goal to reduce carbon emissions by 80% by 2050.  They plan to target initiatives addressing supply and demand through increased energy efficiency, renewable generation, and grid modernization, as well as improvements in existing technologies and information analysis.  To help stimulate the energy economy, the DOE will invest nearly $40 billion in the form of loan grants to innovative energy technology development.

Additionally, the budget sets aside $2.4 billion for energy efficiency and renewables development.  This money is set to help fund state-level energy programs, the generation of solar, wind, water, hydrogen, geothermal, and biomass infrastructure, as well as support for grid modernization efforts (particularly the integration of the “Smart Grid”).

INNOVATION: The Administration believes that leading the world in clean energy agenda requires assembling a critical mass of the best scientists and engineers to engage in mission-oriented, cross-disciplinary approaches to addressing current and future energy challenges.  Accordingly, the budget is earmarking $55 million for science based education programs to cultivate innovation from grades K-20+ in a program called RE-ENERGYSE.

Secretary Chu also cites his appreciation for those who headed The Manhattan Project and their commitment/attention to every detail of the project.  Furthermore, the budget has requested $5.1 billion for the Office of Science in order to create Energy Frontier Research Centers (EFRC’s), or a network of smaller groups where scientists can work intimately in laboratories designed specifically for groundbreaking testing.  These centers will complement the Energy Innovation Hubs funded in FY2010.

Lastly, to help achieve the game-changing breakthroughs needed to continue leading the global economy, the FY2011 budget is requesting $300 million for the Advanced Research Projects Agency—Energy (ARPA-E).  ARPA-E is responsible for enabling specific high-risk and high-payoff transformational research and development projects.  Along with the $400 million made available through the Recovery Act, this funding will provide sustained investment in this program.

SECURITY: The President has gone on record stating that, “the most immediate and extreme threat to global security is the threat of nuclear proliferation.” The budget provides $2.7 billion in FY2011, and $13.7 billion through FY2015 to detect, secure, and dispose of dangerous nuclear and radiological material worldwide.  Investments will also include strategies to modernize key nuclear facilities, better manage the nuclear stockpile, as well as enables execution of a nuclear defense strategy based on current and projected global threats that relies less on nuclear weapons and enhances national security by strengthening the NNSA’s nuclear security program. 

The Nuclear Regulatory Commission and the Administration have decided that the Nuclear Waste Storage Facility at Yucca Mountain is “no longer a workable option.”  According to the Secretary, "When one looks back at the history of the choice of Yucca, one finds that other things, knowledge, conditions made it look like Yucca was not the best choice.  There was a number of unfolding issues.  Climate is hard to predict over a million years, and other geological sites where we can effectively say that it is more geologically stable exist."

When asked about the Department's strategy for nuclear expansion in the future, the Secretary claimed that research shows that shutting down plans for Yucca Mountain will have no impact on nuclear expansion.  He also added that    waste is safe where it is for many decades and that there are no space limitations.