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Lieberman-Warner bill could raise gas prices - The Hill
Tuesday May 20, 2008
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The Hill
Lieberman-Warner bill could raise gas prices
By Jim Snyder
Posted: 05/19/08 06:09 PM [ET]
A bill that the Senate will debate after Memorial Day could add about 50 cents to the price of a gallon of gasoline, according to a study.
Lawmakers have spent the spring debating ways to lower prices at the pump. But they will soon find themselves discussing a measure that could push fuel costs even higher.
A study paid for by a group that represents oil refiners found that the global warming bill, co-authored by Sens. Joe Lieberman (I-Conn.) and John Warner (R-Va.), would raise pump prices by around 48 cents (in 2007 currency) by 2030. It also found that the bill would increase gas prices by as much as 13 cents over the next four years.
The debate highlights the difficulty lawmakers will face in trying to tackle global warming as they simultaneously try to provide economic relief to the nation’s drivers.
The Warner-Lieberman bill, which is expected to be debated on the Senate floor the first week of June, seeks to cut greenhouse gas emissions to 65 percent below 2005 levels by 2050.
It does so by imposing a cap on the amount of greenhouse gases an industrial sector can release. Companies that exceed that cap could buy emission allowances from greener businesses in an open market.
For refiners, the bill would act like a tax on carbon dioxide, a leading greenhouse gas released when fossil fuels are burned. The total price hit would reach 60 cents, the study predicts.
About 80 percent of that would be passed on to consumers.
The report was performed by NERA Economic Consulting , a group that has helped craft a cap-and-trade system in Europe, and underwritten by the National Petrochemical and Refiners Association (NPRA) , a group that has called efforts in the United States to reduce greenhouse gas emissions “premature.”
But the study reflects the findings of an earlier report performed by the impartial Energy Information Administration, a division of the Energy Department that tracks and reviews energy data. That report also projected around a 50-cent increase in gas prices due to new carbon dioxide emissions restraints.
Both reports also say a climate bill could lead people to drive less, which would lower demand and therefore the price of gas.
David Harrison, who heads NERA’s global environment group, said reduced demand could lower the price of gasoline and other refined products by nine cents. Overall, “There is a lot of uncertainty related to price,” he said.
The NPRA study and others could, however, leave supporters of a climate change bill open to charges of hypocrisy, given their simultaneous efforts to reduce gasoline costs by requiring the administration, for example, to stop filling the Strategic Petroleum Reserve, leaving more oil on the market.
The subject of gas prices will continue to dominate debate on Capitol Hill this week. House Democrats plan to take up a bill that would allow antitrust challenges to OPEC, the oil cartel.
Republicans will again push for measures that would open up areas that are now off-limits to oil and gas development as a way to boost domestic supply.
With debate on climate change set for the first week in June, the Senate Energy and Natural Resources Committee, meanwhile, is wading into the various economic analyses on Warner-Lieberman and other climate change bills at a hearing scheduled for Tuesday.
The National Association of Manufacturers , National Mining Association , Congressional Budget Office, Congressional Research Service, Environmental Protection Agency and Environmental Defense Fund have all examined the potential costs.
Charlie Drevna, the president and CEO of NPRA, said the reports should convince lawmakers to think twice before pursing aggressive climate change bills.
“Policymakers are going to have to get mugged by reality,” Drevna said. “This study is but one step in that mugging.”
But Paul Bledsoe, a spokesman for the National Commission on Energy Policy , a nonpartisan think tank, said lawmakers should be wary of economic predictions relating to a climate change bill.
“There is a lot of data out there,” Bledsoe said.
“The tricky part is that every one of the analyses makes assumptions about what the world is going to look like. It all depends on how quickly clean-energy technology will penetrate the marketplace.”
The studies do underscore, Bledsoe added, the need for some type of mechanism to control the costs to the economy. The Warner-Lieberman bill, for example, would create a Federal Reserve-like board that would keep track of allowance prices. If prices rose too high, the board could decide to release more credits in the market, thereby reducing the price.
Other bills include a safety valve that establishes a price ceiling for an emissions allowance.
There is also a cost to not acting, supporters of climate change legislation point out.
A manager’s amendment of the Warner-Lieberman bill released to lobbyists last week notes predictions by the Intergovernmental Panel on Climate Change (IPCC) that rising temperatures caused in part by humans will lead to more erosion on the coasts, decreased snow pack in the West — and therefore less water — and new threats to forests from insects and fire.
Crop output in Africa could decline 50 percent due to global climate change, IPCC reported.
Opponents will use more than costs to lobby against the Warner-Lieberman bill. The NPRA study also questions whether the emissions curbs called for in Warner-Lieberman are achievable.
For example, the study found that it would take “at least” 70 new nuclear reactors by 2030 to meet the bill’s climate goals. But the report suggests that could be an unrealistic expectation given the costs of constructing a nuclear plant.
Progress Energy estimated in March that it would cost nearly $15 billion to construct two 1,000-megawatt nuclear units. That price is more than 40 percent of an average investor-owned utility’s market capitalization, the study notes.
Also, NERA’s study says there would have to be a tenfold increase in wind power generation.
That translates into 40,000 new turbines, which would cover 2 millions acres, an area three times the size of Rhode Island.
Drevna said the addition of that many new turbines is likely to raise land-use issues and not-in-my-backyard concerns similar to those already seen in the debate over whether to build a wind farm in Nantucket Sound.
Harrison said NPRA did not seek to influence the outcome of the report. He said that lawmakers should view it and other studies as indicators of the potential effects of the Warner-Lieberman bill but that there were a number of uncertainties in such a broad bill that could affect the ultimate outcome.
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Lieberman-Warner Debate Just Two Weeks Away
New Inhofe White Paper, Web Page Detail Harmful Impacts of Lieberman-Warner Bill
Friday May 16, 2008
The page will be updated frequently over the next two weeks and throughout consideration of the bill. A sampling of the latest news now included on the new web page is included below:
Environmentalists' Wild Predictions
Tuesday May 13, 2008
Weblink to Walter Williams Column:
Environmentalists' Wild Predictions
May 07, 2008
By Walter E. Williams
Now that another Earth Day has come and gone, let's look at some environmentalist predictions that they would prefer we forget.
At the first Earth Day celebration, in 1969, environmentalist Nigel Calder warned, "The threat of a new ice age must now stand alongside nuclear war as a likely source of wholesale death and misery for mankind." C.C. Wallen of the World Meteorological Organization said, "The cooling since 1940 has been large enough and consistent enough that it will not soon be reversed."
In 1968, Professor Paul Ehrlich, Vice President Gore's hero and mentor, predicted there would be a major food shortage in the U.S. and "in the 1970s ... hundreds of millions of people are going to starve to death." Ehrlich forecasted that 65 million Americans would die of starvation between 1980 and 1989, and by 1999 the U.S. population would have declined to 22.6 million. Ehrlich's predictions about England were gloomier: "If I were a gambler, I would take even money that England will not exist in the year 2000."
In 1972, a report was written for the Club of Rome warning the world would run out of gold by 1981, mercury and silver by 1985, tin by 1987 and petroleum, copper, lead and natural gas by 1992. Gordon Taylor, in his 1970 book "The Doomsday Book," said Americans were using 50 percent of the world's resources and "by 2000 they [Americans] will, if permitted, be using all of them." In 1975, the Environmental Fund took out full-page ads warning, "The World as we know it will likely be ruined by the year 2000."
Harvard University biologist George Wald in 1970 warned, "... civilization will end within 15 or 30 years unless immediate action is taken against problems facing mankind." That was the same year that Sen. Gaylord Nelson warned, in Look Magazine, that by 1995 "... somewhere between 75 and 85 percent of all the species of living animals will be extinct."
It's not just latter-day doomsayers who have been wrong; doomsayers have always been wrong. In 1885, the U.S. Geological Survey announced there was "little or no chance" of oil being discovered in California, and a few years later they said the same about Kansas and Texas. In 1939, the U.S. Department of the Interior said American oil supplies would last only another 13 years. In 1949, the Secretary of the Interior said the end of U.S. oil supplies was in sight. Having learned nothing from its earlier erroneous claims, in 1974 the U.S. Geological Survey advised us that the U.S. had only a 10-year supply of natural gas. The fact of the matter, according to the American Gas Association, there's a 1,000 to 2,500 year supply.
Here are my questions: In 1970, when environmentalists were making predictions of manmade global cooling and the threat of an ice age and millions of Americans starving to death, what kind of government policy should we have undertaken to prevent such a calamity? When Ehrlich predicted that England would not exist in the year 2000, what steps should the British Parliament have taken in 1970 to prevent such a dire outcome? In 1939, when the U.S. Department of the Interior warned that we only had oil supplies for another 13 years, what actions should President Roosevelt have taken? Finally, what makes us think that environmental alarmism is any more correct now that they have switched their tune to manmade global warming?
Here are a few facts: Over 95 percent of the greenhouse effect is the result of water vapor in Earth's atmosphere. Without the greenhouse effect, Earth's average temperature would be zero degrees Fahrenheit. Most climate change is a result of the orbital eccentricities of Earth and variations in the sun's output. On top of that, natural wetlands produce more greenhouse gas contributions annually than all human sources combined.
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Analyses Show Lieberman-Warner Depends on Significant Nuclear Energy Increases
Monday May 12, 2008
The expansion of nuclear energy will be a key debate if the America's Climate Security Act – S.2191 (Lieberman-Warner) cap-and-trade bill comes to the Senate Floor. As economic analyses show, significant carbon reductions are contingent on the construction of extensive numbers of new nuclear plants.
FACT: Economic analyses show Lieberman-Warner would require massive development of nuclear energy, up to 268 new plants by 2030, according to the Energy Information Agency’s (EIA) most recent analysis: that’s two and a half times the number of plants we have operating today - an increase so massive and unrealistic as to be fictional.
In addition to EIA, the chart below shows necessary projections as determined by the Environmental Protection Agency (EPA), the Electric Power Research Institute (EPRI), and the Clean Air Task Force (CATF):
EIA’s analysis further showed that merely limiting the construction of new nuclear plants dramatically increased allowance costs and electricity costs, while decreasing reductions in carbon emissions. This clearly indicates that nuclear energy is the key to reducing carbon emissions and reducing the costs of any such effort. Proponents of climate change legislation can’t continue to reject the world’s largest source of carbon-free energy. However, any large-scale development of nuclear energy will face several challenges including regulatory predictability and waste management, but perhaps the most significant challenge will be the scale of the financing needed to accommodate such a large number of projects.
The Electric Power Research Institute’s projection of 64 new plants by 2030, which is considered an extremely optimistic goal by industry experts, would require the industry to find financing of approximately $384 billion. Companies looking to build just one or two plants may need financing equal to half of their total market capitalization. CEO’s will not gamble the health of their companies if the financial risks are too high or if political support is shaky. One of the ways the federal government can address this situation is by helping to create a stable financing platform upon which executives can base their decisions. Loan guarantees is one such tool.
If proponents of climate change legislation are serious about reducing carbon emissions, it’s time to stop dodging the issue and embrace nuclear energy. Robust construction of emissions-free nuclear plants requires robust support from the Congress now.
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Inhofe Floor Remarks on Bringing Down Energy Prices
Friday May 9, 2008
In remarks on the Senate Floor on Thursday, May 8, 2008– which can be viewed on You Tube by clicking here – Senator Inhofe made the following points:
-Rather than raise taxes, block production, increase regulations, and call for investigations, I joined with other colleagues last week introducing the Domestic Energy Production Act of 2008.
Democrats’ Political Science Hypocrisy
Tuesday May 6, 2008
Democrats’ Political Science Hypocrisy
Senate Democrats claimed today that the Environmental Protection Agency (EPA) was “foot-dragging” when it comes to deciding whether or not to regulate perchlorate. The latest political posturing occurred during todays EPW Committee hearing entitled “Perchlorate and TCE in Water.” Legislation discussed at today hearing is designed to circumvent the EPA’s regulatory process. Democrats seem to believe that the political process, not the scientific process, should decide what gets regulated and when.
FACT: In circumventing the EPA regulatory process, Democrats would limit public comment and review as well as force EPA to accept scientific findings without the opportunity to weigh important science and data collected over the past several years by the EPA, FDA, CDC, and NAS.
There is a better way to govern – as Congress concluded in 1996. Under leadership of Chairman Chaffee and Ranking Member Baucus, Congress was successful in amending the Safe Drinking Water Act in such a way as to force the EPA to set standards if the contaminants “have known health effects,” are “known to occur in public water systems with a frequency and at levels of public health concern,” and will provide EPA "the meaningful opportunity for health risk reduction for persons served by a public water system.”
At today’s hearing, Mike Baker from the Ohio Environmental Protection Agency testified on behalf of the Association of State Drinking Water Administrators about the current process and the concern of legislating contaminants rather than following the process outlined in the Safe Drinking Water Act. The Association of State Drinking Water Administrators are responsible for carrying out the Safe Drinking Water Act and the subsequent regulations and programs enacted to help safeguard the quality of America’s drinking water.
Baker stated in his opening statement today that:
“An underlying tenant of the Act, we believe, is that environmental and public health standard-setting and review should be driven by sound science…”
“…as a general matter, we believe the science-based decision-making processes of the Act should be allowed to function as envisioned. We are concerned about the precedent of using legislative action that supersedes the provisions of the statute for particular contaminants and contaminant categories…”
“Unless a balanced, rational, and transparent approach is used, we’re concerned that EPA will jump from one contaminant to another -- based on media and political attention -- rather than on the potential for meaningful public health gains.”
The discussion of the politicization of the science couldn’t be timed any better, considering Democrats will hold another hearing this week taking aim at the Bush Administration for politicizing science. As Senator Bond states in his opening statement from today’s hearing, that before Democrats throw stones tomorrow, they should examine the glass house they are living in today. Bond states:
“Madame Chairman, thank you for holding this hearing today. This hearing allows us to examine the politicization of environmental protection, attempts to roll back environmental law and the disregard of scientific study. Some may think that I am one day early. That is the goal of tomorrow’s hearing as I understand it. However, I would say that before stones are thrown tomorrow, we should examine the glass house some are living in today. Part of the purpose of this hearing is to establish the need for a bill currently before the Senate, S. 150. That legislation would require EPA to issue regulations on perchlorate levels in drinking water. Sponsors of this legislation are well meaning. They have the best interests of their constituents at heart, but they fail to acknowledge that their effort is the very definition of political regulation. It is politicians here in the Senate dictating the outcome of EPA’s environmental decisionmaking.”
Sen. Bond then shows illustrates how Democrats pick and choose their science.
“The Safe Drinking Water Act now includes a specific process designed to protect public health. The law specifically requires risk assessment and the use of science in decisionmaking. Under the law, the Administrator must present information to the public and conduct a health risk reduction and cost analysis. But advocates would sweep that environmental law aside and go straight to the conclusion they favor. Apparently, rolling back environmental laws are ok with them if and when they choose. This effort also includes a minimization of the work of the National Academy of Sciences. Witnesses will tell us today why we should not follow the natural conclusions of an NAS study on perchlorate. But how many times have we heard charges of heeding the advice of political figures instead of peer reviewed science? Indeed, two weeks ago, an NAS study by the National Research Council was heralded when it determined that short-term exposure to ozone is likely to cause premature death in some cases. Two weeks later when the NAS is not so helpful, it becomes an inconvenient truth to be minimized or discounted.”
The inconvenient fact for Senate Democrats is that today's hearing highlighted their record of meddling in the scientific process.
Senators Call on EPA to Act on Rising Food and Feed Prices by Waiving Ethanol Mandates
Monday May 5, 2008
The letter states:
“Congress gave the EPA authority to waive all or portions of these mandates, as well as rule-making authority to structure the mandates for the benefit of all Americans. We believe the EPA should begin the process of examining alternatives to ease severe economic and emerging environmental consequences that are developing in America as a result of the mandate…
“American families are feeling the financial strain of these food-to-fuel mandates in the grocery aisle and are growing more concerned about the emerging environmental concerns of growing corn-based ethanol. It is essential for the EPA to respond quickly to the consequences of these mandates. Congress made the mandates in the EISA different from existing mandates to provide flexibility and to encourage innovation in advanced and cellulosic fuels. We believe today’s circumstances merit the use of this flexibility.”
As noted on the Inhofe EPW Press Blog last week, momentum appears to be growing on Capitol Hill to revisit the increased ethanol mandate signed into law last December. In addition to Sen. Inhofe’s Senate floor speech on April 29, several Senators have spoken out on the need to take action regarding the ethanol mandate.
Calls For Congressional Action on Biofuels Mandate Growing
Friday May 2, 2008
'Global Warming Will Stop', New Peer-Reviewed Study Says
Wednesday April 30, 2008
This significant new study adds to a growing body of peer-reviewed literature and other scientific analysis challenging former Vice President Al Gore and the United Nations Intergovernmental Panel on Climate change (IPCC).
Democrats’ Inconvenient Gas Price Problem
EPA Analysis Projects Climate Bill Will Raise Gas Prices 53 Cents Per Gallon
Monday April 28, 2008
The article continued: “A U.S. EPA analysis of the Lieberman-Warner bill last month projects significant increases in consumer power and gasoline costs, with the latter increasing about 53 cents per gallon in 2030 and $1.40 per gallon in 2050, though EPA did not study in detail a recent law that increases auto mileage standards and expands the national biofuels mandate.”
As record gas, energy, and food prices continue to soar and American families continue to face growing anxiety over an economic downturn, the costly and symbolic Lieberman-Warner global warming cap-and-trade bill is set to debut on the U.S. Senate floor in June. With the U.S. acting unilaterally, the bill will not have a detectable impact on the global temperatures, but it will (as correctly noted in the Greenwire article) have a very detectable impact on gas and energy prices for already suffering Americans.
