Energy prices, from fuel for interstate trucking to electric utility costs, would rise significantly under climate change legislation pending in the U.S. Congress, industry officials said on Tuesday.

The global warming legislation, which aims to drastically reduce emissions of carbon dioxide and other industrial pollutants over the next 40 years, could face a vote by the full House of Representatives this month or next.

It has an uncertain future in the Senate this year even though President Barack Obama has called for quick enactment.

This bill will cost (consumers) hundreds of billions of dollars, said David Sokol, chairman of MidAmerican Energy Holdings Co., which serves electric and natural gas customers in 10 U.S. states.

Many of its plants are coal-fired and thus major sources of emissions associated with climate-related problems such as rising global temperatures and more intense storms.

Sokol told a House panel overseeing the climate change measure that provisions in the bill to compensate companies and consumers from higher energy costs would be inadequate.

Instead, Sokol said, the bill would essentially create a tax of between 12 percent and 28 percent for customers' power bills in the states where MidAmerican Energy operates.

But Representative Edward Markey, chairman of the House Energy and Commerce subcommittee that held Tuesday's hearing, said the bill is heavily weighted toward protecting consumers from higher energy prices. The U.S. Environmental Protection Agency has forecast minimal consumer impact from the bill.

'CAP AND TRADE'

Obama wants to help fight climate change by capping emissions of greenhouse gases such as carbon dioxide from industries and allowing them to trade rights to pollute. Such systems are commonly called cap and trade.

Under the program, the government would either give or sell industries permits to emit carbon dioxide and other greenhouse gases. The number of permits would diminish over time.

The nonpartisan Congressional Budget Office has estimated that government sales of a portion of the pollution permits to companies would generate about $846 billion in revenues over 10 years and reduce budget deficits by about $24 billion.

The cap and trade system would be set up to reduce the overall number of permits that industry could hold. Companies could trade permits with each other on an as-needed basis. The CBO said in 2012, a market valued at more than $60 billion for trading the permits would be realized.

By encouraging use of alternative energy sources, from wind and solar to biofuels, Markey also said the bill would help wean the United States from oil imported from OPEC nations, which he said will rise in price independent of any climate change legislation.

We're in the eye of the storm heading back to $4 (per gallon) gas, Markey said, adding, We can't run the risk of living on this roller coaster.

The pollution-control bill, which aims to cut carbon emissions 17 percent by 2020 and 83 percent by 2050, has won the support of some key industry groups.

Thomas Farrell, CEO of Dominion Resources, said the pollution permitting system that the legislation would establish offers the best means of protecting electricity consumers of all types without sacrificing the desired environmental improvements.

Farrell, who testified on behalf of the Edison Electric Institute electric companies association, said some changes to the legislation were needed, including extending the phaseout period for free pollution permits to companies. Currently, those permits would begin being sold to companies after 2025.

Tommy Hodges, who testified on behalf of the American Trucking Associations, said higher oil refinery costs and other factors would bring potentially crippling increases in diesel fuel prices.

Depending on how much they were to rise, Hodges said the climate bill would cost his Tennessee-based trucking firm, Titan Transfer, Inc., $3 million to $30 million per year, costs that will be difficult to absorb.

A small oil refiner, Lion Oil Co., in Arkansas would have to shut down, resulting in 1,200 jobs being lost if the legislation is enacted in its current form, said Steve Cousins, the firm's vice president.

Refining 70,000 barrels per day of oil for gasoline, diesel fuel and asphalt, Cousins said his company would have to spend $180 million a year to buy pollution permits in the initial years of the program. He testified the added costs would make Lion Oil insolvent within a matter of months.

(Editing by Will Dunham)

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