Details about the forthcoming Senate climate bill are still scarce, alas. As mentioned earlier, the hot rumor of late is that Kerry, Graham, and Lieberman are planning to unveil a plan that would have a cap-and-trade system for emissions from electric utilities and then a separate "carbon fee" for oil and other transportation fuels, with the revenue either getting funneled back to consumers or used for projects that reduce oil consumption. And there are even some signs that this strategy could boost the bill's chances of passage. Darren Samuelsohn reports that the trial balloon is going over well with the big oil companies, who prefer the fee approach to a single unified cap-and-trade program:

If accepted, the approach—supported by ConocoPhillips, BP America and Exxon Mobil Corp.—could rearrange the politics of the Senate climate debate and potentially open up votes that may not be there otherwise.

"It gets you a solution to the carbon problem that doesn't destroy that part of the economy," Sen. Lindsey Graham (R-S.C.), a lead co-author of the Senate legislation, said yesterday. "Once you have oil people saying, 'We can live with this, this was our idea,' then hopefully everybody else begins to look at this thing anew. That's the hope." ...

"Clearly it softens the reaction and increases the likelihood that a number of people who've been forced to push back will be much more cooperative in the dialogue," said Jack Gerard, president of the American Petroleum Institute.

Now, API and other big oil companies were unrelentingly hostile toward the House climate bill, and I'm a little skeptical that, in the end, they'll ever come around to supporting a Senate bill—even one that explicitly adopts their ideas. But who knows? One reason that electric utilities made out relatively well in the House climate bill is that they played a cooperative role during the debate, while most of the oil industry sat on the sidelines, trying to scuttle the bill altogether. Maybe API will try a different tack this time.

It's also notable that a few key oil-state Democrats have spoken favorably about the new carbon fee proposal. Louisiana's Mary Landrieu, who was long thought to be a surefire "no" vote on any clean-energy bill, said this week that the Kerry-Graham-Lieberman approach was "moving in the right direction." Still, it's too early for optimism. Not only does this legislation need 60 votes, but it then has to get reconciled with the House climate bill. And a lot of coal-state Dems in the House, especially Virginia's Rick Boucher, don't like the idea of moving away from the unified cap-and-trade system—since, after all, they designed the system to be more favorable to coal.

(Flickr photo credit: mrchriscornwell)

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