Staff members from several U.S. Senate committees were meeting Monday to stitch together a slimmed-down energy bill that still needs approval from Majority Leader Harry Reid, a Senate source said.
If all goes well, the full Senate could begin consideration of Reid's bill Tuesday. Democrats would like to pass it by the early part of the following week.
With time running short ahead of a month-long recess starting Aug. 6, Democrats abandoned efforts last week to put climate-control measures in the bill, with Reid citing a lack of Republican support for carbon caps and mandates requiring utilities to generate some of their power from renewable fuels.
Reid said Congress could revisit climate legislation in September but lawmakers and analysts doubt there will be much appetite ahead of the mid-term elections in November.
And if Republicans pick up seats, as expected, the effort to put a price on carbon and cut emissions could be stalled for years, which would also hamper the Obama administration's efforts to take a lead role at the world climate talks.
The narrower bill would hold BP Plc accountable for the oil spill in the Gulf of Mexico and seek to prevent similar disasters, Reid said last week.
It will very likely include provisions to force companies to dole out more money to cover the costs of oil spills. The liability cap, which is currently $75 million, will likely be raised to $10 billion or more. One Senate committee passed a bill last month to lift all caps on liabilities.
The bill will also contain incentives to convert trucks to run on natural gas and for cars to run on electricity.
It will also outline $900 million a year for land and water conservation and increase energy efficiency in homes, the senate source said.
Analyst Kevin Book, of ClearView Energy Partners LLC, said he expects the energy efficiency measure known as Home Star to include $5 billion in incentives for plugging window leaks and insulating attics.
The natural gas trucks incentives could cost the government $4.1 billion, compared to the $19 billion price tag for an earlier bill that had been endorsed by energy tycoon T. Boone Pickens, Book said.
To pay for these measures, lawmakers may consider raising taxes on the the oil and gas industry.
"One possibility would be to raise the Oil Spill Liability Trust Fund tax from 8 cents per barrel to 49 cents per barrel, which would raise approximately $18 billion," said analyst Whitney Stanco of the Washington Research Group.
This fund, created in the aftermath of the Exxon-Valdez accident, helps pay claims for financial or property losses caused by oil spills.
Opponents of taking tough measures on oil companies have said such action could raise energy bills for consumers.
In a sign of a lack of bipartisan support, Republicans released an energy bill of their own Friday that would lift the deepwater drilling moratorium after requirements were met and inspections were completed. It would also allow for royalty revenue sharing with states.
Interest groups are lobbying to get measures boosting various energy sources attached to the bill.
Environmentalists are increasingly worried they are not winning in their battle to get a renewable power mandate in the bill. They warn that without such measures, China would surpass the United States in alternative energy.