New US climate bill said to threaten industry

18 October 2007 22:40  [Source: ICIS news]

WASHINGTON (ICIS news)--Climate change legislation newly proposed in the US Senate would cause severe damage to the US manufacturing sector and employment, a leading chemical industry spokesman said on Thursday.

 

Jack Gerard, president of the American Chemistry Council (ACC), said that a major Senate bill introduced earlier on Thursday to cap and reduce greenhouse gas emissions by US industry would trigger soaring energy prices for manufacturers and consumers alike.

 

He said that if the bill were enacted as drafted, it would force many in the US chemicals industry to cut production and transfer capacity to overseas locations where energy costs are lower.

 

The bill, titled America’s Climate Security Act, was introduced today by Senators Joe Lieberman (Independent-Connecticut) and John Warner (Republican-Virginia). 

 

It would put in force a mandatory cap-and-trade emissions reductions plan to cut US industrial greenhouse gases to 70% below their 2005 levels in order to “avert catastrophic global warming” by 2050, according to the two senators.

 

Gerard warned, however, that “the bill’s proposed emissions reduction schedule would turn energy markets upside down, causing massive reductions in coal usage and enormous increases in natural gas and renewable fuels usage”.

 

More than 50% of US electric power generation is fuelled by emissions-heavy coal, and the US chemicals industry depends in large part on natural gas as both a feedstock and energy source.

 

“Yet there is no provision the bill for additional domestic natural gas supply,” Gerard said.

 

“Consequently, lower-emission energy choices such as natural gas would be stretched even further, energy prices would soar and manufacturers and residential consumers who rely on affordable natural gas and electricity would pay dearly,” Gerard said.

 

He warned that Congress cannot realistically address large-scale emissions reductions unless it also crafts a comprehensive energy policy to substantially increase fuel diversity and supply, including development of more US domestic gas supplies.

 

US chemicals producers and a broad range of other manufacturers have been asking Congress to end its 26-year-old ban on energy development in 85% of US offshore areas that are believed to hold vast reserves of oil and gas.

By: Joe Kamalick
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