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A Senate bill to cut U.S. greenhouse gas emissions would raise energy prices and also reduce American economic output by more than half a trillion dollars over two decades, according to a government report released on Monday.

Congress is expected to consider climate legislation this fall that would fight global warming. Many businesses worry the U.S. economy would suffer under a measure to impose tough mandatory cuts in emissions.

One proposal, introduced by Sens. Joseph Lieberman and John McCain, would gradually reduce total U.S. emissions by the year 2050 to 60 percent below 1990 levels.

The bill would require companies to report their yearly greenhouse gas emissions and submit a matching number of government-issued allowances to equal the emissions spewed. Companies that emit more would have to buy allowances from cleaner companies that produce fewer emissions.

However, the proposal would cut into the U.S. economy and raise gasoline and other energy prices paid by consumers, according to an analysis of the legislation by the Energy Information Administration.

The legislation “increases the cost of using energy, which reduces real economic output, reduces purchasing power, and lowers aggregate demand for goods and services,” the EIA said.

With companies trying to meet the shrinking emissions levels, U.S. economic output would be $533 billion lower over the 2009 to 2030 time period, the agency said.

In the transportation sector, gasoline and other petroleum products would cost more as oil refiners buy allowances to cover the emissions spewed by their facilities.

“The cost of the allowances will be included in the prices of the fuels,” the EIA said.

Gasoline prices are forecast to be 23 cents a gallon higher in 2020 and 41 cents more in 2030 because of the required emission cuts, the agency said.

The EIA said the fuel price increases would not be large enough “to create dramatic shifts in consumer behavior,” but there would be more demand for fuel efficient vehicles.

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Declaring a new direction in energy policy, the House on Saturday approved $16 billion in taxes on oil companies, while providing billions of dollars in tax breaks and incentives for renewable energy and conservation efforts.

Republican opponents said the legislation ignored the need to produce more domestic oil, natural gas and coal. One GOP lawmaker bemoaned “the pure venom … against the oil and gas industry.”

The House passed the tax provisions by a vote of 221-189. Earlier it had approved, 241-172, a companion energy package aimed at boosting energy efficiency and expanding use of biofuels, wind power and other renewable energy sources.

“We are turning to the future,” said House Speaker Nancy Pelosi.

The two bills, passed at an unusual Saturday session as lawmakers prepared to leave town for their monthlong summer recess, will be merged with legislation passed by the Senate in June.

On one of the most contentious and heavily lobbied issues, the House voted to require investor-owned electric utilities nationwide to generate at least 15 percent of their electricity from renewable energy sources such as wind or biofuels.

The utilities and business interests had argued aggressively against the federal renewables mandate, saying it would raise electricity prices in regions of the country that do not have abundant wind energy. But environmentalists said the requirement will spur investments in renewable fuels and help address global warming as utilities use less coal.

“This will save consumers money,” said Rep. Tom Udall, D-N.M., the provision’s co-sponsor, maintaining utilities will have to use less high-priced natural gas. He noted that nearly half the states already have a renewable energy mandate for utilities, and if utilities can’t find enough renewable they can meet part of the requirement through power conservation measures.

The bill also calls for more stringent energy efficiency standards for appliances and lighting and incentives for building more energy-efficient “green” buildings. It would authorize special bonds for cities and counties to reduce energy demand.

Pelosi, D-Calif., said it was essential to commit to renewable energy while reducing reliance on fossil fuels. Doing so, she said, will help address global warming and make the country more energy-independent.

“It’s about our children, about our future, the world in which they live,” Pelosi said.

Democrats avoided a nasty fight by ignoring - at least for the time being - calls for automakers to make vehicles more fuel-efficient. Cars, sport utility vehicles and small trucks use most of the country’s oil and produce almost one-third of the carbon dioxide emissions linked to global warming.

That issue, as well as whether to require huge increases in the use of corn-based ethanol as a substitute for gasoline, were left to be thrashed out when the House bill is merged with energy legislation the Senate passed in June.

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Russian explorers readied for a historic descent to the bottom of the Arctic Ocean under the North Pole on Wednesday as part of an expedition to claim the area for Russia, expedition organisers said.
Two Russian ships carrying the explorers, a research vessel and a nuclear ice-breaker were due to reach by 1600 GMT the site from which two mini-submarines will make the descent, they said in a statement.

“The dive is due to happen on Wednesday night,” said Sergei Bolyasnikov, an official at the Arctic and Antarctic Institute in Saint Petersburg, which is organizing the mission.

The dive is believed to be the first of its kind and is part of an epic voyage that aims to advance Russian claims to a swathe of Arctic seabed thought to be rich in oil and gas.

Two Mir mini-submarines were to take the explorers, led by parliament member Artur Chilingarov, to a depth of around 4,200 metres (14,000 feet) to the seabed, where they will carry out scientific tests and deposit a Russian flag.

“Having your feet reach such a depth is like taking the first step on the moon,” Chilingarov, a veteran Arctic explorer, was quoted as saying in an interview with RIA Novosti news agency.

“The Arctic-2007 mission should become a landmark in Russia’s mastery of the North Pole,” the Novye Izvestia daily wrote Wednesday. “There is already serious talk of a new Cold War.”

Russian media reports suggested a US expedition that set off from Norway on July 1 to study another part of the Arctic seabed, the Gakkel Ridge, was part of a race between Moscow and Washington for the Arctic’s mineral riches.

But the US expedition’s robotic vehicles were to hunt for “life and hydrothermal vents on the Arctic seafloor,” said the website of the Woods Hole Oceanographic Institution, which was organising the voyage.

The Russian expedition, which set off on July 24 from the northern Russian port of Murmansk, hopes to establish that a section of seabed passing through the North Pole is in fact an extension of Russia’s landmass.

There is growing international rivalry in the region as energy reserves grow scarce in other parts of the world and the melting of the polar ice caps makes the area more accessible for research and economic activity.

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