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ACC Opposes Utility-Focused Cap-and-Trade Proposals in U.S. Senate

Jennifer Scott, ACC, (703) 741-5813
July 14, 2010

ARLINGTON, VA (July 14, 2010) – The U.S. Senate has been discussing a number of options for energy and climate legislation, including the possibility of a cap-and-trade program focused on utilities. 

American Chemistry Council (ACC) President and CEO Cal Dooley issued the following statement:

“We oppose so-called ‘utility-focused’ cap-and-trade programs, which will in fact have far-reaching impacts on the U.S. economy, especially industries such as chemistry that are energy-intensive and exposed to global trade. Such proposals will raise energy prices, including natural gas feedstock costs, and in turn harm the global competitiveness of America’s chemical industry, stall our economic recovery and stifle job creation.  Instead, Congress should focus its attention on passing a comprehensive energy bill that fully develops our domestic energy supplies and ensures U.S. manufacturers can obtain competitively-priced energy.

Unfortunately, under every version of the proposal discussed to date, utility allowances are insufficient to cover their higher energy costs, which will simply be passed through to industrial energy consumers and other rate payers.  Transition assistance is not provided to U.S. manufacturers who will actually bear the burden of the ‘utility’ emissions cap. Another troubling aspect of a utility-focused cap-and-trade program is that it leaves open the possibility of new regulatory requirements developed by EPA outside of a national climate policy.  The proposals pre-empt EPA regulation of utilities, while allowing the regulation of ‘uncapped’ industrial and commercial sources.

Senator Sherrod Brown (D-Ohio) and several of his colleagues are developing approaches intended to protect U.S. manufacturing competitiveness while creating incentives for energy efficiency and clean energy technology investment.  As Congress develops a comprehensive energy bill, Senators should consider the impact on U.S. manufacturers and reject a utility-focused cap-and-trade system.”

Learn more about energy and climate legislation.

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