US Senate leaders introduce climate change bill

30 September 2009 21:38  [Source: ICIS news]

WASHINGTON (ICIS news)--The US Senate’s Democrat leadership on Wednesday introduced their major climate change bill, saying it would help clean the global atmosphere and rescue the nation from oil dependency.

Industrial and Republican opponents of the Democrats’ climate change approach quickly condemned the Senate bill, warning it would significantly raise energy costs for American consumers and impose additional costs and regulatory burdens on refiners, chemical makers and other manufacturers.

Senator Barbara Boxer (Democrat-California), chair of the Senate Environment and Public Works Committee and co-author of the “Clean Energy Jobs and American Power Act”, said the bill would go far to meet the global warming challenge and advance US economic recovery.

Senator John Kerry (Democrat-Massachusetts), co-author of the legislation and chairman of the Senate Foreign Relations Committee, said the measure “makes it clear that we will combat global climate change with American ingenuity”.

At its core, the 800-page climate bill is a cap-and-trade mandate - although Boxer and Kerry prefer to call it a “pollution reduction and investment” measure - which would force US cuts in greenhouse gas (GHG) emissions to 20% below the nation’s 2005 level by 2020 and to 80% below that mark by 2050.

Like the climate change bill approved by the US House of Representatives in June this year, the Boxer-Kerry Senate bill would place increasing year-by-year reductions - a cap - on total emissions by manufacturers and utilities and auction or give emissions permits to industries. 

Those production facilities that emit GHG below the level they are permitted could sell their excess emissions permits, the “trade” part of cap-and-trade.

According to a summary provided by the Senate Environment Committee, the Senate bill would provide “additional support to energy-intensive and trade-exposed industries, like the chemicals industry, so that no advantage is given to companies that simply relocate their pollution overseas”.

The US refining and chemical sectors were quick to blast the Boxer-Kerry bill, however. The National Petrochemical & Refiners Association (NPRA) said that the new Senate bill “represents an abject policy failure” and is even worse than the climate measure passed by the House.

NPRA president Charlie Drevna said that the Senate bill “goes even further [than the House bill] in seeking more unrealistic reductions that will impose onerous regulatory burdens on domestic refiners amidst fierce global competition and increased costs on the driving public, farmers and truckers”.

The Industrial Energy Consumers of America (IECA), whose member firms include many major US petrochemical and chemical producers, said that cap-and-trade “is not a viable policy option”.

“The US should not consider imposing a cap-and-trade regulatory regime on the nation without the entire world simultaneously implementing a cap-and-trade system,” said IECA spokesman Michael Massiwer.

“Without a global system, those without a cap are rewarded and incentivised to not accept a cap,” he said, adding that the US and other countries cannot force non-compliant nations to accept emissions reductions.

President Barack Obama issued a statement praising Boxer and Kerry, saying their bill puts the US “one step closer to putting America in control of our energy future and making America more energy independent”, adding that he is committed to seeing a climate bill pass in Congress.

Senate Republican Leader Mitch McConnell of Kentucky said that the Boxer-Kerry bill “appears to be even more expensive for consumers and for our economy than the bill that passed the House”.

Senator James Inhofe of Oklahoma, the ranking Republican on Boxer’s committee and an outspoken sceptic on global warming, said the Boxer-Kerry bill would “produce yet another massive energy tax that will destroy jobs, raise electricity and gasoline prices and make America less competitive”.

“What’s more, this bill is even worse than the energy tax passed in the House,” he said, adding: “The sponsors know this, so the bill is lacking in key details, an attempt no doubt to hide the central fact: this is an energy tax that will affect every American.”

The Senate Environment and Public Works Committee was expected to begin hearings on the climate change bill later this week or early next week. As many as five other Senate panels have jurisdiction over the bill, and full Senate debate of the issue was expected to take months.

Some in industry believe there was not sufficient support in the Senate to pass any cap-and-trade climate measure.

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