Posted by: David Lungren David_Lungren@epw.senate.gov

EPW Climate Hearings Day 2: Roundup

www.epw.senate.gov/inhofeblog

Hearing Highlights  . . .

In today's hearing, the EPW Committee heard a few key things about Kerry-Boxer:

-It will undermine the global competitiveness of America's manufacturers, and give a huge competitive advantage to countries such as China and India.

-It will weaken America's national security because it will weaken the economy, and thus compromise our ability to protect the country against foreign threats.

-It is an energy tax that will make consumers pay higher prices for electricity.

Kerry-Boxer bill will penalize America's manufacturers by raising their energy costs. 

- According to Brett Vassey, vice president of the Virginia Manufacturers, higher energy costs will hamper the ability of manufacturers to compete against countries such as China and India, which have refused to accept binding emissions cuts. As Vassey stated, cap & trade is "just another tax on businesses and consumers-regressively so on manufacturing." Vassey also noted that Kerry-Boxer does nothing to stop jobs and emissions from moving overseas, which harms the economy and increases emissions. Even if Virginia limited all of its CO2 emissions, Vassey stated, China's CO2 emissions growth alone would replace all of Virginia's CO2 emissions in only 77 days. Virginia is .44% of the global GHG emissions.

America must develop its own resources to protect against foreign threats and mobilize for war. 

- Cap-and-trade will make America more dependent on foreign oil and undermine our national security by destroying jobs and economic growth. But the key point was made by Major General (Ret.) Robert Scales: Kerry-Boxer will do nothing to stop global warming but it will harm the economy and thus weaken America's national security. As Scales said, "Advocates of [Kerry-Boxer] believe passionately that it will reduce America's production of greenhouse gasses. Some suggest that it will create jobs. They may or may not be correct. But nothing in this bill will either reduce the likelihood of American involvement in future wars nor will it improve America's war making capabilities. Indeed over the decades the consequences of the bill might well reduce American influence and retard our ability to deter and fight wars in the future."

More: Testimony from Lieutenant Colonel James Jay Carafano (Ret.) 

The Kerry-Boxer energy tax will hurt electricity consumers, especially those in the Midwest, South, and Great Plains.

- Dustin Johnson, the chairman of the South Dakota Public Utilities Commission: "This bill will hurt Midwestern consumers because it substantially raises their monthly utility bills." Johnson pointed to an analysis of Waxman-Markey that shows "South Dakota consumers will be paying as much as 25 percent more for their electricity as soon as 2012. It could be even more for customers of some companies."

WATCH: Dustin Johnson Testimony

- Barry Hart, Chief Executive Officer of the Association of Missouri Electric Cooperatives: "Thank you very much Senator. I do want to make it clear that regional disparities are some of the things that bother us the most. No one on this panel has argued for inaction. No one on this panel has said that carbon shouldn't come with some price. The concerns that have been raised have been primarily around regional disparities."

WATCH:  Barry Hart Testimony  

Hearing Fact Check . . .

Today, Sen. Boxer cited a CNN poll claiming 60% support cap-and-trade.  But the poll is misleading: it made no mention of the costs and economic burdens of cap-and-trade on consumers. 

- As the Republican Policy Committee noted, "The CNN poll, however, simply asked respondents whether they supported cap-and-trade, with no mention of any costs."

- When Americans are made aware of the costs of cap-and-trade, the picture looks quite different. Again, here's RPC: "A Rasmussen poll found that 56% of respondents would not pay anything to fight global warming. Only 21% would pay $100 a year more. ABC news found 59% opposition to cap-and-trade if it would cost $25 a month (compared to 52% support without mention of cost). A Washington Post poll saw majority support (52%) go to majority opposition (54%) if cap-and-trade would cost just $25 per month."

- RPC notes that cap-and-trade would cost much more than $25 per month. For example, the Energy Information Administration found that the average household up to $1,870 more a year ($155.83/month) in 2030 because of cap-and-trade. Even EIA's most optimistic scenario pegged costs at $282, roughly equivalent to $23.50 per month.

In The News  . . .

Energy Daily:  Valero Chief Says Senate Climate Bill Threatens Refiners (10/28/09)  "This bill is inherently unfair [and] penalizes the oil and gas industry directly and picks winners and losers," Klesse said. "For example, the direct impact to Valero refineries will be staggering, even with an allowance price of $20 per ton," Klesse said, noting that at that allowance price, Valero's Delaware City, Del., refinery would see an increase in its annual production costs of $40 million to $80 million. But Klesse said foreign competitors not bound by a carbon constraint would have far lower costs and would be able to scoop up market share and put smaller U.S. refiners out of business.   A study released Tuesday by the consulting firm Wood Mackenzie suggests that interest in U.S. gasoline markets would not be limited to developing countries such as China and India that for decades have been net importers of U.S. refined products but are gearing up to sell gasoline in U.S. markets.

Politico:  Climate bill forecast: Cloudy  (10/28/09)  Moderate members of the Senate Environment and Public Works Committee on Tuesday signaled a tough battle ahead to win Senate approval of climate change legislation, even if the White House pours significant political capital into the fight.  Sen. Max Baucus (D-Mont.), who's also chairman of the Senate Finance Committee, criticized the legislation sponsored by the environment committee's chairwoman, Sen. Barbara Boxer (D-Calif.), and Sen. John Kerry (D-Mass.), saying he had "overall concerns" about the proposal.  "We cannot afford the unmitigated impacts of climate change, but we also cannot afford the unmitigated effects of legislation," Baucus said during the first in a series of climate change hearings this week before the Senate committee.

Missouri.net : Bond slams rising electricity costs associated with cap-and-trade (10/28/09)  Senator Christopher "Kit" Bond is lashing out, again, at cap-and-trade legislation which is making its way through Capitol Hill in Washington, D.C.  The cap-and-trade legislation is designed to cut carbon emissions.  But Bond fears any cap and trade bill that clears Congress would result in higher electricity bills for Missourians because much of our power comes from coal. Bond points to warnings that Missouri electricity rates would go up 26 percent starting in 2012 to 42 percent as soon as 2020.  Asked to comment on a CNN /Opinion Research Corporation survey suggesting most Americans favor cap-and-trade legislation, Bond said people don't want to pay higher costs for electricity.

Charleston Gazette:  Senate climate bill hearings: What about coal? (10/28/09) The hearings before the Senate Environment and Public Works Committee continue tomorrow, and it's apparently coal day ... testimony is expected from Mike Carey, President of the Ohio Coal Association and Gene Trisko of the United Mine Workers of America union.. When the latest version of the bill was released very late Friday night, Committee Chairwoman Barbara Boxer listed "new provisions to address clean coal technology" among the changes.  A fact sheet released by the committee outlined these changes: -New provisions to stimulate development of commercial-scale carbon capture and sequestration (CCS) technologies; - A modified "bonus allowance program" that allows for advanced payments to "early actors" in installing CCS technology, provided that funded projects will achieve at least a 50 percent reduction in greenhouse gases. - Provisions that require coal-fired power plants to meet emissions performance standards once sufficient commercial-scale CCS technology has been deployed, while also ensuring timely reductions in global warming pollution from power plants.

E & E News: Refiners warn of 'staggering' costs, job losses from Senate bill (10/28/2009) The CEO of refining giant Valero Energy Corp. warned today that the Senate climate legislation would give a competitive advantage to foreign refiners and cost U.S. jobs. Addressing the Senate Environment and Public Works Committee, Valero's Bill Klesse alleged that the Senate bill and its House counterpart would create large new costs that would drive domestic gasoline and diesel production offshore, cause job loss, and reduce U.S. energy security. He spoke on behalf of the National Petrochemical and Refiners Association, the industry's main trade group. "You must remember we are a global business," Klesse said. "You will simply be driving the carbon dioxide emissions overseas." Klesse said Texas-based Valero -- a large independent refiner with 16 refineries in the United States, Canada and the Caribbean -- would face "staggering" costs even at a carbon price of $20 per ton, he said.

E & E News : Midwestern utility reps warn of inequities from global warming bill (10/28/2009) Electric utility representatives clashed today over the costs to their consumers from global warming legislation under consideration in the Senate. Barry Hart, head of the Association of Missouri Electric Cooperatives, complained about the soaring electricity rates that he said would come if S. 1733, the climate bill before the Environment and Public Works Committee, were to become law. "This bill is not good for Missouri, I have to be honest with you," Hart said, adding that the Senate bill's allowance formula leaves his organization about 40 percent short of the allocations it needs to avoid passing higher energy prices on to its 2 million customers. "I'm concerned this bill is not fair, and I'm concerned this bill hurts Midwestern consumers more than it has to," added Dustin Johnson, the head of the South Dakota Public Utilities Commission.

U.S. climate bill spurs low-carbon jobs debate (10/28/09)  An aide to West Virginia Democratic Senator John Rockefeller said the tougher emissions goal is unrealistic and harmful as there is not enough time to deploy the carbon capture and storage and energy efficiency technologies. Senate Finance Committee Chairman Max Baucus, who represents Montana, another coal state, also voiced opposition on Tuesday to the 20 percent target. A third Democratic senator, Robert Byrd, also of West Virginia, has not yet staked out a position on the revised Senate bill. Byrd praised Boxer's additions in the bill that put more focus on clean coal technology. But he warned, "I will actively oppose any bill that would harm the workers, families, industries, or our resource-based economy in West Virginia.

Wash. Post:  Economics of climate change in forefront (10/28/09)  The panel's top Republican, Sen. James M. Inhofe (Okla.), voiced widely held worries about adding to the economic problems of many workers. The fact that the measure includes provisions to soften the transition to a low-carbon economy, he said, "is an implicit acknowledgment that the bill will destroy jobs. . . . I'm sure the worker at a {cement plant, when he loses his job, won't find much consolation in green welfare programs." [   ] Some Republicans highlighted CBO Director Douglas W. Elmendorf's Oct. 14 testimony that the bill by Democratic Reps. Henry A. Waxman (Calif.) and Edward J. Markey (Mass.), which the House passed over the summer, would cause "significant" job losses in fossil-fuel industries and would slow U.S. economic growth for several decades, including between 0.25 and 0.75 percent by 2020. Sen. John Barrasso (R-Wyo.) said the policy reflected the administration's tendency "to promise jobs for all, create some for a few and let the rest of us fend for ourselves."

Newsmax: Inhofe: Cap-and-Trade Largest Tax Increase in U.S. History (10/28/09)  Sen. James Inhofe tells Newsmax that the cap-and-trade bill supported by Democrats would amount to "the largest tax increase in the history of America" - and won't accomplish anything.  The Oklahoma lawmaker also he would be "shocked" if the bill has enough votes to pass the Senate.  The bill, which was passed by the House, requires a 17 percent reduction of greenhouse gases - mainly carbon dioxide from burning fossil fuels such as coal - by 2020 compared to 2005 levels, and about an 80 percent reduction by mid-century. It would also allow polluters to buy and sell emission allowances as a way to ease the cost of compliance.

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