US cap-and-trade bill treats refineries unfairly - trade group

04 August 2009 23:49  [Source: ICIS news]

WASHINGTON (ICIS news)--Proposed cap-and-trade legislation unfairly burdens the US refineries by awarding them fewer credits, a trade group said on Tuesday.

The Senate Finance Committee convened a hearing to consider ways to divide the carbon-emission allowances, which serve as permits for emitting 1 ton (0.91 tonne) of carbon into the environment.

Jack Gerard, president of the American Petroleum Institute (API), reacted to the hearing by calling upon the Senate to abandon the proposed means of distributing any free allowances under a bill (HR 2454) passed by the House of Representatives on 26 June.

The House proposal would treat refineries unfairly because they would not receive enough free allowances, Gerard said.

"Senators should understand that copying the ill-conceived House approach will not contribute to a comprehensive energy policy that creates jobs, grows the economy and addresses climate change. The House approach places a disproportionate burden on all consumers of gasoline, diesel fuel, heating oil, jet fuel, propane and other petroleum products," Gerard said in a statement.

"The House approach relies on a flawed distribution of free allowances that picks winners and losers as the nation transitions to low-carbon sources. The House plan would hold refiners responsible for 44% of emissions but only allocate to them 2.25% of allowances," Gerard said.

The Senate should solicit greater input from users and producers of transportation fuels from the oil and natural gas industry to assist with the development of an equitable and efficient system that avoids undue burdens on consumers and transportation industries, Gerard said.

Markup of a Senate bill would commence this fall, sometime after the Senate returns from its summer recess, set to begin at the end of this week.

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By: Mickey McCarter
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