UpdateDow lauds US House panel on climate change bill

22 May 2009 21:47  [Source: ICIS news]

(adds Dow comments paragraphs 1-2)

HOUSTON (ICIS news)--US major Dow Chemical issued a positive response on Friday to a major US climate change bill that had earlier drawn criticism from many trade groups.

“Dow believes that US leadership is essential to fostering a global solution to rising greenhouse gas emissions,” the company said. “Sound and predictable climate policy will not only protect our environment but will also unleash investment in new technologies that will advance energy security and sustainability.”

Unlike Dow, US chemical and energy industry groups expressed concern on Friday that a major climate change bill approved by a House committee could put companies in a competitve bind and ultimately hurt consumers.

The House Committee on Energy and Commerce passed HR 2454, the American Clean Energy and Security Act (ACES Act), late on Thursday.

Charles Drevna, president of the National Petrochemical & Refiners Association (NPRA), said the bill's authors issue allowances disproportionately to favoured industries while hoping that the false promise of "green jobs" could gloss over the current jobs lost should the measure become law.

"While this may appear, in the short-term, to be a monumental political success, ultimately it represents nothing more than an abject policy failure," Drevna said. "Ultimately at stake are American energy security and the ability of our home-grown energy providers to compete in global markets, as we must."

Cal Dooley, chief executive of the American Chemistry Council (ACC), said changes to the bill would be necessary because the bill treats energy-intensive industries including chemicals differently from every other sector in the US economy.

That provision – widely opposed by US business and industry - would cap US industrial and transportation emissions of carbon dioxide (CO2) and other greenhouse gases (GHG) and mandate annual reductions to 83% below 2005 levels by 2050. 

“The bill assigns a baseline year of 2005 for energy-intensives versus a flexible, multi-year base period for other sectors,” Dooley said.

The bill also provides for the auction or distribution of emissions permits that industrial facilities could purchase and trade to cover excess amounts of GHG production they generate beyond the level of a baseline year assigned to each industrial sector.

However, to lower the economic impact of the cap-and-trade mandate - which supporters concede would raise US energy prices - some of the emissions permits are to be distributed at no cost to various industries.

Jack Gerard, president of the American Petroleum Institute, said, “While the bill has laudable environmental and economic goals, its inequitable system of allocations remains intact and if enacted would have a disproportionate adverse impact on consumers, business and producers of gasoline, diesel fuel, jet fuel, crude oil and natural gas.” .

The bill faces likely revisions as it is taken up by several other pertinent committees before it can be brought up for a floor vote in the full House.

The measure also faces major challenges in the US Senate.

President Barack Obama spoke positively of the bill.

"We are now one step closer to delivering on the promise of a new clean energy economy that will make America less dependent on foreign oil, crack down on polluters, and create millions of new jobs all across America," Obama said in a statement. "The bill is historic for what it achieves, providing clean energy incentives that encourage innovation while recognising the concerns of sensitive industries and regions in this country."

(Additional reporting by Joe Kamalick)

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By: Ben DuBose
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