US chemicals, steel warn of climate bill costs

13 November 2007 21:19  [Source: ICIS news]

WASHINGTON (ICIS news)--US chemical, steel, aluminium and paper industry officials warned Congress on Tuesday that pending climate control legislation could force major industries offshore and accelerate global emissions of greenhouse gases.


Testifying before the Senate Environment and Public Works Committee, industry officials cautioned that a bill to reduce US emissions of greenhouse gases (GHG) would trigger widespread fuel-switching among electric utility companies as they abandon coal-fired power generation plants for the lower emissions of gas-powered generators.


Industry officials said that heavy additional demand on natural gas would increase gas prices far beyond their already high levels and put US producers of chemicals, steel, aluminium and other manufactured products at a competitive disadvantage with foreign producers who enjoy lower-cost gas supplies and little or no emissions-related restrictions.


Andrew Sharkey, president of the American Iron and Steel Institute, said:  “If climate legislation fails to address the competitiveness issues vis à vis foreign products, it will have devastating consequences not only for the US economy but also for the environment.”


“Not only will we export American jobs, greenhouse gas emissions will rise,” he said.  “The carbon footprint of our major foreign competitors selling in the US market is substantially higher than that of the domestics as a whole.”


The Senate panel is considering S-2191, the America’s Climate Security Act, which would impose limits or caps on US industrial emissions of six greenhouse gases (GHG) and provide or auction emissions permits to individual companies.  Those companies whose plants emit less greenhouse gases than permitted could sell remaining emission credits to other firms whose facilities exceed allotted maximums.


The bill imposes emissions limits on three main economic sectors, manufacturing, transportation and electric power generation and also would put caps on emissions by general consumption of natural gas.


Speaking for his trade group and for the American Chemistry Council (ACC), the Aluminum Association and the American Forest & Paper Association, Sharkey also was critical of a provision in S-2191 that would encourage US states to impose their own and more stringent cap and trade systems on US manufacturing and utilities.


“I shudder to think how American industry can cope with a federal cap and trade programme and a multitude of conflicting, more stringent state programmes,” Starkey said.


Committee Chairwoman Barbara Boxer (Democrat-California) said she is “committed to making this bill stronger at every step of the process”.  She said she hopes to complete committee work on the bill by 5 December.

By: Joe Kamalick
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