US Senate support for climate bill said to weaken

29 May 2008 23:24  [Source: ICIS news]

WASHINGTON (ICIS news)--US Senate support for a climate control bill is beginning to wane amid widespread consumer concerns over fuel and electricity price increases, Republican officials said on Thursday.

 

The Senate is to begin floor debate next week on S-2191, the "America’s Climate Security Act," which would impose mandatory limits or caps on US industrial emissions of greenhouse gases in hopes of reducing global warming.

 

The bill would force annual emissions reductions by US industry, the transportation sector and power generation to a level 65% below the nation’s 2005 emissions by 2050. 

 

It would provide for federal government auction of emissions permits that could be traded among manufacturers and utilities that have less or more emissions than the law allows them for any given year.

 

The permits auctions are projected to raise some $6,700bn (€4,288bn) in federal revenues that in part would be doled out to low-income taxpayers and directed to clean energy research.

 

However, even the measure’s sponsors concede that a cap-and-trade system would drive up fuel and electricity costs.

 

Most US chemicals producers and a broad array of other manufacturing interests oppose the legislation on grounds it would trigger huge demand increases and resulting higher prices for cleaner-burning natural gas.  Natgas is a major feedstock for US chemicals producers and is widely used as a general industrial power fuel as well.

 

“Our domestic energy supply will be weakened by this bill,” said Andrew Wheeler, Republican staff director and chief counsel on the Senate Environment Committee.

 

Speaking at a briefing on next week’s Senate climate debate, Wheeler said that “This bill is going to increase demand for natural gas and the bill does nothing to increase supply.”

 

“Some Democrats in the Senate, maybe 10 to 15 of them, are concerned about domestic energy supply and quite a few of them are sitting on the fence about this bill,” Wheeler said, meaning that they are uncertain about supporting the measure.

 

With the price of oil at $130/bbl and US retail gasoline prices at $4/gal, Wheeler said more Democrats are “hearing pressure from their constituents at home about gas prices and electric utility costs, and they’re concerned about the timing of this legislation when Americans are so concerned about the price of energy”.

 

In any event, Wheeler said he did not think the climate bill has any real chance of passage this year and that next week’s Senate debate chiefly will be a political exercise as part of the run-up to the November US national elections.

 

A similar cap-and-trade bill is to be introduced in the House of Representatives next week, but no real action on either the Senate or House versions is likely before a new administration takes office in January next year.

 

($1 = €0.64)

 

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