US emissions bill would hike energy costs sharply

20 May 2008 23:33  [Source: ICIS news]

WASHINGTON (ICIS news)--Emissions control legislation being considered by the US Congress would trigger massive increases in energy costs and sharp cuts in US economic growth but with little impact on climate change, experts told a Senate panel on Tuesday.

 

The Energy Information Administration (EIA) told the Senate Energy and Natural Resources Committee that reductions on US emissions of carbon dioxide and other greenhouse gases (GHG) under pending bill S-2191 would force a rapid shutdown of almost all existing coal-fired electric power plants with resulting skyrocketing increases in power costs.

 

EIA deputy administrator Howard Gruenspecht said that his agency’s analysis of S-2191, also known as the Lieberman-Warner bill, found that “Compliance with the Lieberman-Warner emissions targets is expected to result in the rapid retirement of the existing fleet of coal-fired power plants”.

 

“With a large increase in capacity additions needed to replace those units and also meet rising demand under any of the technology cases, higher costs translate directly into increased energy and economic impacts,” Gruenspecht said.

 

He said it is doubtful that the forced retirement of those coal-fired electric power plants could be offset with nuclear power because of technical challenges “and additional questions regarding public acceptance of their widespread deployment”.

 

A study funded by the National Petrochemical & Refiners Association (NPRA) and conducted by NERA Economic Consulting predicted an increase of 50 cents/gal for the cost of gasoline by 2030 if the Lieberman-Warner bill - and all of its alternative energy assumptions - were brought into force.

 

However, NPRA president Charles Drevna noted that many of the bill’s assumptions are unlikely, including construction of at least 70 new nuclear power plants and installation of 40,000 new wind turbines on some 2m acres of land by 2030.

 

The bill, said Drevna, also assumes US production of 68bn gal/year of cellulosic and corn ethanol by 2030 along with replacement of almost all conventional gasoline-burning automobiles with ethanol-compatible vehicles.

 

Brian McLean, director of atmospheric programmes at the Environmental Protection Agency (EPA), said the Lieberman-Warner legislation would force a reduction in the US economy by nearly 7% by 2050 compared with projected growth of 215% if the bill were not made law.

 

McLean said the negative impact on the US economy would be doubled if the enabling technologies assumed by the Lieberman-Warner bill - the massive increases in nuclear power plant construction and biofuels production - are not achieved.

 

The bill, which seeks to reduce US greenhouse gas emissions to 63% below the nation’s 2005 emissions level by 2030, would cut carbon dioxide (CO2) concentrations in the global atmosphere by only some 4%, McLean indicated.

 

The impact of the Lieberman-Warner emissions control bill on global concentrations of greenhouse gases “is not enough to address the global climate challenge”, McLean said.

 

The full Senate is expected to debate and vote on the Lieberman-Warner bill in early June.

 

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