Senator Kerry hints at changes in U.S. climate bill

WASHINGTON (Reuters) - Senator John Kerry, leading the drive for compromise climate change legislation, on Tuesday said his proposal will not contain any sort of motor fuels tax and could scrap an oil sector “fee” that has been discussed.

In recent weeks, government and industry sources have said the bill that Kerry and Senators Joseph Lieberman and Lindsey Graham plan to unveil on Monday would contain a “linked fee” in the transportation sector.

Such a fee, they said, would be linked to a mechanism for pricing carbon dioxide pollution permits in the electric power sector as part of a global warming bill.

Any new tax or fee could be a lightning rod for opposition from Republican and Democratic senators, especially those running for reelection this year and at a time when domestic gasoline prices already are rising in a difficult economy.

But speaking to reporters, Kerry said: “There is not even a linked fee. There’s not a tax, there’s nothing similar.”

Pressed for clarification about the fee, Kerry then said, “certainly not the way it was described previously, nothing like that.” The Massachusetts Democrat refused to elaborate.

On Friday, a spokesman for Graham, a South Carolina Republican, issued a statement saying that the senator “does not support a gas tax and the bill he is working on does not include gas tax.” But the aide did not address whether a fee would be in the bill.

The bill authored by Kerry, Graham and Lieberman aims to reduce U.S. smokestack emissions of carbon dioxide and other greenhouse gases that scientists blame for global warming.

Expressing frustration with political opponents to such an effort, Kerry said, “They’ll say anything, they’ll lie and they’ll distort.”

The question of a new tax or fee being included in a climate bill has been a controversial issue because many Republicans have long dismissed climate control legislation as nothing more than a new tax on consumers, who would face higher energy prices when more expensive alternative energy like wind and solar power replace dirty-burning coal and oil.

Don Stewart, a spokesman for Senate Republican Leader Mitch McConnell, when asked about Kerry’s upcoming bill, told Reuters, “There could be pieces in the bill we like, pieces we don’t like. We don’t like a national energy tax.”

In an attempt to lure some additional Republican support for a climate bill, Kerry, Graham and Lieberman have been talking about expanding the nuclear power industry and offering new incentives for oil drilling off some U.S. coasts.

Reporting by Richard Cowan, editing by Anthony Boadle