REFINERS LIKE CAP&TRADE W/FREE ALLOWANCES

Refiners would get a break in climate change bill; Along with San Antonio Democrat, Houston Congressman Green helped pave the way to deal allowing free greenhouse gas permits
Jennifer A. Dlouhy, May 15, 2009 (Houston Chronicle)

"Climate change legislation moving through Congress would give refiners free permits to emit greenhouse gases under a compromise engineered by [Rep. Gene Green (D-Tex) and Rep. Charlie Gonzalez (D-Tex), congressmen to districts with petrochemical plants and oil refiners]...

"The two lawmakers got the deal added to a [top priority] climate change bill agreed to by most Democrats on the House Energy and Commerce Committee and backed by the measure’s two sponsors, Reps. Henry Waxman, D-Calif., and Ed Markey, D-Mass…[The bill] which the Energy and Commerce Committee is slated to consider next week, would cap carbon dioxide emissions at 17 percent below 2005 levels by 2020 and 83 percent by 2050."

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"Green and Gonzalez also scored a major concession sought by oil companies when committee leaders scrapped a proposal that would impose steadily stiffer limits on transportation-related greenhouse gas emissions — and make the industry pay for allowances to cover the excess pollutants released when their fuel is burned.

"Oil company executives had warned lawmakers that much of the costs of covering motorists’ fuel emissions and the additional internal compliance work would have been passed on to consumers in the form of higher prices at the pump…

"Power plants, refiners, manufacturers and other operations could exceed the limits by buying and exchanging emissions allowances on a new carbon-trading market."

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"To defray costs for some polluting industries, Waxman and Markey agreed to give away more than half of those allowances in the early years of the so-called “cap-and-trade” plan…Eventually, companies would be weaned off the free allowances and would then have to buy the permits from the federal government at auction.

"Under the deal with Green and Gonzalez, refiners would get 2 percent of the free allowances starting in 2014 and ending in 2026…[It was ] attacked by both oil industry leaders, who said it wouldn’t offer enough economic protection, and environmentalists, who complained it was an unnecessary giveaway…"