House Democrats' emissions bill includes concessions to major polluters
11:06 PM CDT on Wednesday, May 13, 2009
By DAVE MICHAELS / The Dallas Morning News
WASHINGTON – House Democrats are approaching consensus on a major legislative effort to regulate greenhouse gas emissions – with significant concessions to nearly every major polluter except the oil industry.
Under the proposal, big polluters would have to reduce their carbon dioxide emissions or buy pollution credits to meet government targets. Lawmakers have offered free credits to electric utilities – the largest source of emissions – to blunt the impact on electricity prices and garner votes from lawmakers who represent coal-producing states.
Democrats also have offered free credits to manufacturers, including steel and cement producers, which face foreign competition. Automakers would get free credits, which they could sell, provided they plow the revenue into making electric vehicles.
But top Democrats seem loath to give credits to refineries, which would have to reduce their emissions and develop cleaner-burning gasoline. Texas has 26 refineries and produces nearly 25 percent of the country's gasoline.
Rep. Gene Green, D-Houston, has had difficulty negotiating free credits for refineries. He blamed the fact that refineries, unlike defense contractors, are concentrated in a few states. That means fewer lawmakers to stick up for the industry, he said.
Refineries also look unlikely to get credits that would go to industries that compete with overseas manufacturers. Washington Rep. Jay Inslee, who has helped negotiate details of the bill, said the country doesn't import enough gasoline for refineries to qualify as "trade sensitive."
Charles T. Drevna, president of the National Petrochemical and Refiners Association, said oil companies would produce less gasoline in the U.S. – and employ fewer people – if they face the regulations here but not overseas.
"Is investment in the U.S. at risk? Absolutely," Drevna said. "Why would anybody invest in something that is going to be capped?"
As the senior Texas Democrat on the committee, Green has received a steady stream of requests from home-state politicians to oppose mandatory caps on carbon emissions. He and Rep. Charles Gonzalez, D-San Antonio, have met several times with California Rep. Henry Waxman, the lead author of the legislation, to negotiate provisions affecting the oil industry.
"Both Congressman Gonzalez and I want to vote to control carbon [dioxide emissions], but we're not going to vote to hurt our districts and to hurt the state of Texas," said Green, whose district includes five refineries.
The House Energy and Commerce Committee plans to consider the legislation next week. The full details of legislation are due to be released today.
So far, Waxman and other Democrats have agreed to soften the near-term targets for pollution reductions. The latest proposal would cap emissions at 17 percent below 2005 levels in 2020, down from the original target of 20 percent.
A provision that would have required utilities to get 25 percent of their electricity from renewable sources by 2025 has been reduced to 15 percent by 2020.
Despite those changes, Republicans have suggested they will oppose any mandatory caps on carbon emissions, although they probably don't have the votes to block the bill.
Rep. Joe Barton, R-Arlington, and other Republicans plan to introduce their alternative to Waxman's legislation today.
"This not just a run-of-the-mill reauthorization of existing law, or some idea whose time has come," Barton said. "This is for all the economic marbles in the country."