Petrogram - Fall 2009 - (Page 23)
FEATURE Impacts of the American Clean Energy and Security Act Eric Hamilton I n a whirlwind effort this summer, the U.S. House of Representatives crafted a climate bill, often referred to as the American Clean Energy and Security Act, that will increase costs of gasoline, diesel and aviation fuel while driving jobs and production overseas leading to increased greenhouse gas emissions in foreign countries. U.S. jobs will be lost and, contrary to the bill’s intention, America will be less energy secure and more reliant on imports of gasoline and other refined products. To put it simply, the legislation is unbalanced. The bill puts disproportionate costs on people who drive a car, truck, tractor or take a flight. In an analysis of the House climate change bill, the federal government’s Energy Information Administration (EIA) said the bill would increase gasoline prices by as much as 33.5 percent above projected 2030 levels and push pump prices above $5 per gallon. In the same analysis, diesel prices could rise by more than 44 percent by 2030 and push prices above $5.50 per gallon. According to the analysis, energy costs for the average American is estimated to increase up to $1,870 in 2030. Other analyses provide independent confirmation of these dreary numbers; for example, the Heritage Foundation projects 90 percent increases in electricity costs and 55 percent increase in natural gas costs if this bill became law. The legislation drives up individual and business fuel costs because it inequitably distributes free emission “allowances” to various sectors. Refiners are held responsible for 44 percent of emissions, including the refinery emissions (about 4 percent) as well consumer emissions from planes, trains, automobiles, heating oil and other petroleum use. Yet refiners are allocated only 2.25 percent of allowances. In contrast, some other sectors receive free allowances that match or exceed their obligation. Unlike power generation, which has the ability of switching to a low-carbon fuel source, there is no commercial scale low-carbon source to fuel the nation’s 250 million cars or the millions of trucks and buses. This inequitable system of allocations will disproportionately hurt Americans that rely on gasoline, diesel fuel, heating oil, jet fuel, propane and crude oil. The unbalanced cost burden of the bill is contrary to a “market-based” approach. The bill would also have a ripple effect throughout the economy as increased energy costs will impact the costs of goods and services. Ultimately, the bill requires outs ou rc i n g re f i n i n g capacity and weakens our energ y security. The bill compounds inequities by barring U.S. refiners from receiving domestic protections granted to other industries exposed to foreign competition. The bill establishes international competitiveness protections for “energy-intensive, trade exposed industries” with one exception – petroleum refiners – even though the federal government ranks refining as the nation’s second most energy-intensive industry. As an aside, the government and U.S. companies spent $133 billion on new energy technology to reduce greenhouse gases since the beginning of the decade; nearly half of that “clean energy” investment is by American oil and natural gas companies. By singling out one sector as ineligible for these protections, the bill’s sponsors Petrogram | Fall 2009 |
Table of Contents for the Digital Edition of Petrogram - Fall 2009
Petrogram - Fall 2009
Welcome, New Board Members
Spotlight on FPMA’s 2009 Convention & Trade Show!
Protecting Your Business
Impacts of the American Clean Energy and Security Act
Out & About the Industry
SPECIAL REPORT: U.S. Petroleum Industry Statistics
Why (Your Insurance Company Thinks) Your Tank Insurance Policy Is Worthless
Index of Advertisers/Advertiser.com
Petrogram - Fall 2009
If you would like to try to load the digital publication without using Flash Player detection, please click here.