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Industry reacts to Waxman-Markey Bill

WHILE the margin was close, the US House of Representatives passed the landmark American Clean En...

Donna Schmidt

The proposed legislation will allow for the establishment of annual emissions tonnage limits and aims to reduce a host of designated greenhouse gas emissions, including carbon dioxide and methane, to 97% of 2005 levels by 2012, 83% by 2020, 58% by 2030 and 17% by 2050.

The bill will also lead to the establishment of emissions trading and includes incentives for cleaner sources of energy.

A variety of industry groups have responded to the legislation, which needs to pass the Senate in order to be introduced.

One of the first reactions was from the American Coalition for Clean Coal Electricity, which supports “timely adoption” of carbon management legislation that includes a mandatory cap-and-trade program.

ACCCE officials said it had taken “constructive proposals” to members of the House of Representatives with recommendations on how the bill could be amended.

"The House did make important improvements to [the bill]; however, ACCCE cannot support this bill as it is written because the legislation still does not adequately protect consumers and the domestic economy or ensure that the American people can continue to enjoy the benefits of affordable, reliable electricity, which has been so important to our nation,” ACCCE said.

The coalition voiced commitment to the US Senate and other involved parties during the coming months to make more modifications to the proposal "so the legislation ultimately adopted by Congress and signed by the president ensures greater energy independence, produces environmental benefits and promotes economic prosperity for millions of Americans".

The National Mining Association penned comment just after the 219-212 vote, labelling it a “complex” piece of legislation.

"The unexpectedly close House vote … reflects the widespread concern that the climate bill’s impacts on employment, the economy and energy security will be severe,” NMA president and chief executive officer Hal Quinn said.

“This … very complex legislation … will affect every aspect of the American economy, harming our ability to compete in the world and provide secure and affordable energy to American consumers and businesses.”

NMA appreciated the work of House delegates to rectify deficiencies and said it would continue to support those who voted against the proposal because the association agreed that the climate policy was not right for the country.

"We are hopeful the many reservations with this bill expressed by ordinary Americans – including America’s mining community – are fully aired and rigorously evaluated in the Senate during its deliberations on energy and climate policy,” Quinn said.

NMA made several recommendations to the US Senate, including a request to contain costs “to avoid volatile or excessively high carbon prices” that the association feels may lead to high energy prices.

The industry group is also concerned with the availability of legal and regulatory frameworks to put carbon capture and storage technology into place while avoiding “duplicative and conflicting authorities to regulate greenhouse gases”

NMA also prefers a global climate policy approach rather than a unilateral one.

"At a time when our economic recovery remains uncertain and when all Americans are worried about their jobs and ability to provide for their families’ future, legislation of this scope and potential impact should not be finalised in haste,” Quinn said.

“NMA is committed to pursuing its policy recommendations as climate legislation moves to the Senate."

Another group feeling that modifications to the proposal are vital is the American Iron and Steel Institute, which considers itself to be the voice of the nation’s steelmakers.

"We believe this bill has moved at a rushed pace that has not allowed for full debate of provisions that are critical to the steel industry, which was clearly underscored by the fact that the bill passed in the House by only seven votes," AISI president Thomas Gibson said.

He added the AISI would continue to work with legislators to enhance the bill’s contents.

One particular modification needed is related to the challenges faced by “energy-intensive industries”, Gibson noted.

"With this bill, all forms of energy – coal, natural gas, biomass and electricity – have the potential to suffer a dramatic cost increase due to fuel switching, deployment of waste gas capture/regeneration technology, carbon capture and sequestration technology, and wind, solar and other clean energy technologies,” he said.

“Energy-intensive industries should be rebated allowances to recover consequential cost increases resulting from this legislation, and not just emissions costs."

AISI also took issue with the bill’s “arbitrary” formula for bringing the emissions allowance of energy-intensive manufacturers below 15% as of 2015.

“This deprives energy-intensive manufacturers of nearly one billion allowances over the life of the program,” Gibson said.

“Energy-intensive manufacturers should receive the same emissions allowance schedule that is applied to every other recipient of emission allowances.”

One pro-coal group that immediately responded to the passage of the proposal, also known as the Waxman-Markey Bill, was the Ohio Coal Association.

OCA president Mike Carey called its potential impact on Ohio “drastic” and said it would destroy jobs throughout the state while sending consumer costs upward.

“Ohio's economy is under siege – dramatically rising jobless rates and a gloomy overall financial picture for the state. Clearly, there is little doubt that any bill that will negatively impact jobs or our state's economic competitiveness should have been seriously questioned,” Carey said.

“And yet, today, the US House failed to do that, passing legislation with no regard for its negative effect on the Buckeye state.”

The group applauded the assistance provided by US Representative Charlie Wilson but said the people of the state as well as Appalachia were let down by the House Democrats.

"The mandatory carbon-emission reductions outlined in this bill will bring deep cuts in coal production. Not only the coal industry is impacted, but all Ohio companies dependent upon competitive utility costs and all Ohioans who would pay higher electricity costs alike will see the far-reaching negative effects of this legislation,” Carey said.

"As Ohioans fight to regain economic stability, this is terrible news out of Washington that can only take us further into the depths of economic despair and job losses."

Two high-profile Senators, both hailing from the coal-rich state of West Virginia and known for their support of the industry, also voiced “serious concerns”, as one said, to the bill in its current form and reiterated their support of the coal community.

"I cannot support the House bill in its present form,” Senator Robert C Byrd said.

“I continue to believe that clean coal can be a ‘green’ energy [and] those of us who understand coal’s great potential in our quest for energy independence must continue to work diligently in shaping a climate bill that will ensure access to affordable energy for West Virginians.”

Senator Jay Rockefeller’s camp noted that he had followed the process very closely to date, yet his concerns about the bill remained.

“The Senate process is in the beginning stages, and Senator Rockefeller will continue working with his colleagues to make sure West Virginia’s interests are represented,” a spokesperson said.

The Illinois Coal Association told ILN that, like advocacy group the NMA, it was in opposition and was urging the public to look at the statistics of the act, such as the fact that it threatened to eliminate nearly 67,000 high-wage jobs in mining by 2020 and increase electricity prices by up to 113%.

The American Clean Energy and Security Act was initially sponsored by California Representative Henry Waxman and Massachusetts Representative Ed Markey.

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