Absent an existing and future supply of affordable low carbon-intensive energy, such as natural gas, carbon emission caps would significantly damage the domestic economy and manufacturing competitiveness, said top energy and environmental experts from 31 manufacturing companies in a report issued Monday.
"The most concerning conclusion [in the report] is the reality that no matter what future year such a cap begins, consumers of natural gas will be impacted immediately by higher natural gas costs because the electric power industry will begin fuel switching from coal to natural gas. Because natural gas supply is constrained, this will have the impact of driving up the cost of natural gas for homeowners, farmers and the manufacturing sector," said Paul N. Cicio, president of the Industrial Energy Consumers of America (IECA), which represents the 31 manufacturing firms.
"The most obvious, but seemingly overlooked, fact is that if Congress would simply do their job and remove what is mostly regulatory and technology obstacles to low carbon-intensive energy supply, greenhouse gas caps would not be necessary. Monetizing carbon through cap and trade-type programs [does] not remove obstacles...that increase Outer Continental [Shelf] supplies of natural gas [or promote] coal gasification, coal technology with sequestration, new nuclear facilities, the Alaskan natural gas pipeline," as well as liquefied natural gas (LNG) supplies, he said.
If Congress should cap greenhouse gas emissions without establishing alternatives to natural gas and other cost-effective energy, such as coal technology and nuclear energy, the report finds that lawmakers may be forced to make the hard choices of:
The nine-page report identified eight factors that the Democrat-controlled Congress should consider before moving to cap greenhouse gas emissions. A number of lawmakers, including Sen. Jeff Bingaman (D-NM), have introduced or are planning to introduce legislation to cap emissions. "The cost of Sen. Bingaman's legislation (and all other climate legislation) relies upon increased U.S. natural gas production, relatively stable natural gas prices and significant increases in LNG and nuclear plant capacity. IECA does not believe these assumptions are plausible and credible, which means the cost forecast for the [Bingaman] bill is significantly understated and at [a] minimum has a significant risk factor," the IECA said.
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