Monday, August 24, 2009

Oil Sources & Refining Production If Cap & Trade Becomes Law

We have been waiting to hear from the oil industry about the impact of the American Clean Energy and Security (Cap & Trade) Act which passed by a narrow 219-212 vote in the House in June (H.R. 2454). Not surprising, the U.S. will be more dependent on imports of petroleum fuels and refining production would be shifted overseas (if the bill becomes law). According to the American Petroleum Institute:
Investment in U.S. refining capacity could plummet because the cost of doing business could soar. Production at U.S. refineries would drop while production at refineries in countries that do not limit their own greenhouse gas emissions would rise. The impact on global refinery greenhouse gas emissions would be minor as reductions in U.S. emissions mostly would be offset by increases in emissions in other countries.

“This study clearly shows the devastating impact this legislation could have on U.S. jobs and U.S. energy security,” said API President and CEO Jack Gerard. “Climate legislation should not come at the expense of U.S. economic and energy security. Congress needs to analyze carefully the impact of any climate policy on ordinary Americans, American jobs and American companies. A deep decline in U.S. refining activity would have a ripple effect throughout the economy, affecting jobs in sectors beyond the oil and gas industry. Steelworkers, construction workers, even the shop keepers, school teachers and waitresses working in communities where refineries operate would feel the pinch.”
Waxman-Markey allowances will not come close to covering what is required by our energy suppliers. If a price is placed on U.S. carbon emissions, domestic production and exploration will have to decline. What is not done here will be done elsewhere. CO2 reductions here will result in CO2 increases elsewhere. Jobs also will move abroad.

See API report HERE.

No comments: