Growing concerns about global warming have prompted California, Arizona and seven Northeastern states to take steps to bypass President George W. Bush and set their own greenhouse limits.

Bush pulled out of the 163-nation Kyoto Protocol on global warming in 2001, saying it would hurt the economy and unfairly left rapidly developing countries like China and India without limits on emissions.

A national cap on emissions would mean heavy industries in the United States, the world's top emitter of greenhouse gases, might have to make big decisions, like investing in alternative energy or clean-burning natural gas.

Hellmer said Bush is sticking with his 2002 plan calling for voluntary reductions, with an eye to trimming greenhouse emissions intensity -- or emissions per unit of economic output of the US economy -- by 18 percent by 2012.

"If we're not meeting (the emissions intensity) goal, (Bush) has always said he will look at new policies and new ideas," Hellmer said. "But now we are on track to meet that goal."

Critics of Bush's voluntary greenhouse plan say it is too lenient to industry, especially as overall US greenhouse gas emissions have risen 13 percent since 1990.

EXPLORATORY TEAM

A source who has worked in the energy profession for decades told Reuters he was approached in New York last month by a team containing White House staff that was exploring the use of national regulations on greenhouse emissions.

The source, who declined to be named, said the team, led by an official at the Department of Energy, was weighing the benefits of three ways to regulate several sources of greenhouse emissions.

"One is for the electric utility industry, one for industrial sources, and another for what they are calling fuels, or vehicles," said the source, who added he thinks the team was far from making conclusions on emissions.

A DOE spokeswoman said the department official said to lead the team was not available to comment on whether he had met with the source to talk about an emissions cap, and said the agency had no knowledge of such contacts.

The source said talks centered on trying to provide regulatory certainty for businesses by extending the plan far past Kyoto's first phase, which requires about 40 developed countries to cut emissions about 5 percent below 1990 levels by 2008 to 2012.

The team has talked about cutting emissions by a yet-to-be-determined amount by 2020 using the year 2000 as an emissions baseline, the source said.

"It's certainly nothing to do with Kyoto," the source said.