President Obama Tuesday signaled at a town hall meeting in New Hampshire that the Senate may not be able to pass energy legislation this year that includes the controversial cap-and-trade system for reducing heat-trapping greenhouse gas (GHG) emissions.

"We may be able to separate these things [energy and climate change] out. And it's conceivable that that's where the Senate ends up," he said in response to questions following his remarks in Nashua, NH. "The House [last year] passed an energy bill and people complained about...this cap-and-trade thing" (see NGI, June 29, 2009).

"While many will declare Obama's speech in New Hampshire was the death knell for the climate change legislation, we're not sure it's so cut and dried," said energy analyst Christine Tezak of Robert W. Baird & Co.

She believes Obama is open to alternatives to cap-and-trade. The president questioned whether there was "a way that doesn't involve some big bureaucracy in a control and command system, but just says, 'Look...there's going to be a price to pollution.'"

Other options to the House's cap-and-trade structure "are being actively discussed by senators on both sides of the aisle. We believe that Obama is leaving himself plenty of room to endorse any agreement which may arise from cap-and-dividend [proposed by Sens. Maria Cantwell of Washington and Susan Collins of Maine]...or other discussions, if they come together. The [fiscal year 2011] White House budget proposal retained a place holder -- but no details -- for a regulatory structure for GHG emissions," Tezak said.

There's always the regulatory option, Tezak pointed out. "If the Senate is unable to move climate provisions with the energy legislation, Obama did not in any way suggest that the administration would abandon its efforts to address GHG pollution through the existing Clean Air Act via pending EPA [Environmental Protection Agency] rulemakings," she said (see related story).

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