Source: Energy bill next week

In a high-stakes move, Sen. John Kerry (D-Mass.) and Sen. Joe Lieberman (I-Conn.) are planning to forge ahead with or without Sen. Lindsey Graham (R-S.C.) and introduce an energy bill next week, according to sources familiar with the planning.

In addition to the uncertainty about Graham’s status on the bill, Kerry and Lieberman are gambling that the dramatic oil spill in the Gulf of Mexico will help, rather than hurt, momentum for the legislation.

That’s not a sure thing. As described in interviews, the reform package includes provisions that allow an expansion of offshore drilling and generous revenue sharing for coastal states that allow it. Graham told POLITICO those provisions were essential to his support.

Since the explosion at the BP rig began pumping millions of gallons of oil into the gulf, a host of Democratic and Republican senators have expressed skepticism if not outright opposition to the idea of expanding offshore test wells.

Sen. Bill Nelson (D-Fla.) threatened to filibuster the legislation. "If offshore drilling off the coast of the continental United States is part of it, this legislation is not going anywhere,” he said.

According to sources familiar with the senators’ deliberations, Kerry and Lieberman have concluded that the crisis in the gulf – which is likely to get worse before it gets better – will focus the public’s attention on the nation’s dependency on oil and facilitate the debate about reforming the energy sector.

Since the actual language in the legislation has not been revealed publicly, advocates of the measure said Kerry and Lieberman may decide to change it in light of the gulf disaster.

For instance, the senators could insist that any future rigs include more safeguards against such a spill. They could also insert language that beefs up oil company liability in the case of such economic and environmental disasters.

In a speech at a green jobs conference on Wednesday, Kerry hinted at the decision to introduce the bill, saying “we will roll it out very, very soon.” He also said electric utilities and other businesses are expected to push for its passage.

The introduction of the legislation would be just the latest twist in the energy reform package’s troubled path to the Senate floor.

The three senators were scheduled to unveil it at an elaborate press conference last week. The event was abruptly canceled when Graham withdrew his co-sponsorship in protest of the decision by the White House and Sen. Harry Reid to move immigration this year, too.

Since then, Graham has lashed out at President Barack Obama on the immigration issue but quietly continued work on the energy reform bill. With his approval, Kerry and Lieberman forwarded it to the Environmental Protection Agency last week for analysis.

Before Graham’s defection, Reid had said he intended to take up the energy bill after the Senate completes work on financial regulation reform, a process that is beginning to wind down now that key, bipartisan agreements have been worked out.

The introduction of the legislation next week would put it in a position to be taken up on that schedule.

The package is expected to be a grab bag of incentives and penalties aimed at reducing dangerous greenhouse emissions while also driving changes in the economy and consumer habits toward newer, cleaner fuels. The legislation is also designed to rid the U.S. dependency on OPEC oil.

The coal industry has already voiced concerns about the measure. Although it is expected to include millions to encourage the development of clean coal technology that is essential to the industry’s future, some insiders say the Senate bill isn’t as generous as the House version. That could prompt an aggressive push against the bill by coal state senators, including ten powerful Democrats.

In other sections of the package, the nuclear industry is set to receive millions in government-backed loans that could revive it. The legislation also includes incentives for expansion of natural gas powered truck fleets.

The bill includes a variety of methods for putting a price on carbon, a development that is essential to making wind, solar and other renewable sources more valuable. The package also will incorporate another Senate bill that targeting energy efficiency.