19 June 2008 23:05 [Source: ICIS news]
Paul Cicio, president of the Industrial Energy Consumers of America (IECA), told the House Subcommittee on Energy and Air Quality that the five climate control bills pending in Congress unfairly target US production industries and if enacted will drive the manufacturing sector overseas.
Climate change bills pending in the House and Senate have in common a federal mandate to cap and then reduce US emissions of greenhouse gases (GHG) in hopes of averting global warming. The bills aim to reduce emissions by industry to 50-80% below their 2005 levels by 2050.
However, Cicio argued that
IECA, whose member firms include chemical producers and other energy-intensive sectors such as automotive, paper, building supplies and food manufacturers, contends that a mandatory emissions cap would trigger a “massive coal to natural gas fuel switching and will drive up the price of natural gas and electricity nationwide”.
“Unless the Congress takes decisive action to increase domestic production of natural gas and bring down the price, manufacturing will accelerate its movement offshore,” Cicio said.
John Felmy, chief economist at the American Petroleum Institute (API), told the panel that in addition to driving huge new demand for natural gas, the pending climate control bills would reduce domestic natgas supplies by adding heavy costs to exploration and development, rendering marginal gas fields cost-prohibitive.
Those cost pressures, said Felmy, also would drive as much as 20% of
Representative Joe Barton of
He warned that with US natural gas prices at $12/m Btu compared with $6/m Btu in early 2007,
With additional natgas demand and pricing pressures under climate control legislation, Barton said, “industries that rely heavily on natural gas - including chemicals, fertilizers and other manufacturing - will continue their exodus to other countries”.
However, Representative John Dingell (Democrat-Michigan), chairman of the Energy and Commerce Committee, said that while reaching a congressional consensus on climate change legislation “is the most complicated issue I have addressed in my time in Congress”, it must be resolved.
“I have no illusions about the amount of effort it will take to build a collation to pass responsible climate change legislation, but pass it we must,” Dingell said.
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