Emissions bill must save chems - US House leader

13 November 2007 19:00  [Source: ICIS news]

Boucher says climate bill must not hurt US manufacturingWASHINGTON (ICIS news)--The leading US House Democrat on energy and environmental issues said on Tuesday that the US must conserve energy and limit greenhouse gas emissions but not at the expense of chemical and other manufacturing.


Representative Rick Boucher, chairman of the Energy and Air Quality Subcommittee in the House Energy and Commerce Committee, told a press conference that with the greenhouse gas emissions control bill his panel is developing and separate Democrat-sponsored energy conservation legislation, “we cannot have dislocation of the US economy by forcing coal-powered electric utilities to default to the next cheapest fuel, which is natural gas”.


US chemical industry officials and other manufacturing interests have warned that climate control legislation now pending in the US House and Senate could devastate the country’s manufacturing sector by forcing electric utilities to switch on a large scale from coal to natural gas in order to meet emissions reductions that climate legislation would impose.


Boucher said too that “something like half of American homes are heated by natural gas, actually about 58% of American homes, so if electric utilities were to default in large numbers from coal to natural gas, gas prices will spike, and they would likely spike in multiples of what they are today, about $7/m Btu”.


He also noted that at $7/m Btu, gas prices are already at multiples of the $2/m Btu range of a few years ago.


“We have to make sure that the provisions of this [climate control] bill do not accelerate that trend,” he said, referring to fuel-switching by utilities.


“Beyond the economic pain that would impose on homeowners, much of US industry is dependent on natural gas,” Boucher said.


“The chemical industry, for example, is completely gas dependent and has no alternative to natural gas as a critical feedstock,” he said. “We have already seen some chemical companies move overseas because gas is at $7, and we cannot afford to lose the rest of them.”


He said that in crafting a climate control cap and trade emissions bill, his committee will have to find a way to ensure that utilities can continue to use abundant US domestic coal resources in order to avoid a wholesale rush to natgas as an alternative power generation fuel.


“Fertilizer and aluminium production also are gas dependent, and there is a much longer list of American industry that would be broadly dislocated if coal-fired utilities were to default to natural gas,” he said.


Boucher, who represents a district in south-western Virginia where coal mining is a major industry, disputed charges that he is only trying to protect coal interests.


“My concern is the US economy, and the practical reality is that we simply should not pass legislation that inflicts pain on the economy at large,” he said.


Boucher said he expects to have his committee complete a climate control bill for consideration by the full House by early next year. Similar legislation is pending in the US Senate.

By: Joe Kamalick
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