Oil refiners would be given 2 percent of greenhouse gas emission permits under a proposed climate change bill that Democrats in the U.S. House of Representatives are writing, according to a document describing that legislation.

The proposal, which could still change in coming days, would also give local natural gas distribution companies 9 percent of the emissions permits. Those companies would have to use the free permits to protect consumers from natural gas price increases, according to the document.

Oil refiners had been seeking to receive 5 percent of the permits.

For the electricity sector, 30 percent of the free permits would go to local electric distribution companies, while merchant coal and long-term power purchase agreements will receive 5 percent of the allowances, according to the document.

The legislation, which broadly attempts to significantly reduce U.S. emissions of carbon dioxide and other greenhouse gases over the next few decades, is scheduled to be considered next week by the House Energy and Commerce Committee.

Democratic leaders hope the full House will pass a climate change bill by August, despite broad Republican opposition. Prospects in the Senate were less certain this year.

While some emissions permits would be sold to industry under the cap and trade plan, a large portion would be given to companies to help them transition to using cleaner, more expensive fuels and to protect consumers from higher energy bills.

(Reporting by Richard Cowan and Timothy Gardner; editing by Jim Marshall)

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