Big Coal's Back Is Covered, Business-As-Usual Climate Scenario Looks Increasingly Plausible

Been meaning to get to this for months, although the "currency" of the story has only ascended. Under the headline "US Manufacturers Say C02 Cap Would Mean Price Surge" Dow Jones Newswire (subscription only) carried this last May:- "Chemical manufacturers and other businesses dependent on natural gas are concerned that U.S. congressional efforts to curb global warming will only hurt industrial firms by dramatically boosting demand for natural gas. That said, the Industrial Energy Consumers of America and other business coalitions plan to launch a communications effort to warn U.S. lawmakers that the so-called cap and trade climate policies most favored on Capitol Hill could lead to gas prices that are double or triple what they are today."

Cap and trade is a complex issue, but ultimately it's a government instituted permitting mechanism to limit the amount of CO2 that individual companies can emit. Those that exceed a "cap" pay no fine. Instead, they buy credits from permittees who got by emitting less: rewarding efficiency. By some accounts, the "cap" would vary by industry sector. Coal burning taking a hit of course. What do the new corporate vice presidents of sustainability have to say about this communications effort to "warn lawmakers" we wonder?

Coal-based electricity being more carbon intensive than any other method, the argument offered to lawmakers is that a "cap" on coal emissions would shift future growth in electrical generating capacity to gas. And that's bad because it would lead to higher operating costs for those US industries already highly dependent on natural gas for feed stock and/or for processing energy: such as in the making of polyethylene and downstream products made from it.

So.... petrochemical watches coal's back, and coal attacks green industries as "un-american" and also discredits environmentalists with the 'DDT banning killed innocent babies in poor nations' talking point that some Think Tank keeps selling to any one who'll buy it.The US Department of Energy puts a different spin on what might result from the US Congress enacting a Cap and Trade program:- "Officials at the Energy Information Administration, the Energy Department's statistical agency, said Monday that climate change programs would likely lead to higher gas prices. But unlike Cicio [spokesperson for Industrial Energy Consumers of America] , they believe those higher prices, over the long term, would spur development of clean coal and nuclear technologies rather than prompt a dramatic shift in the use of gas in electricity generation."

Notice the DOE statement. No spurring of wind power, wave power, solar power, or biogas power mentioned.

Are other plausible Cap & Trade scenarios possible with respect natural gas pricing? Of course. Problem is, as far as we can tell, Congress is not hearing about them.

TreeHugger Conclusions:

Cap and Trade shouldn't be implemented if the US Federal government wants to use it to favor only 'clean coal' and nuclear power. Unless the market shifting forces unleashed by Cap and Trade are made to fall also to the favor of renewable energy, that's tossing a card in a cocked hat.

Companies that lobby through a front group against even the possibility of Cap & Trade, on the one hand, and hire VP's of Sustainability on the other hand, need to have some internal discussions about strategy. See IECA membership list below (from the IECA website).

Planning an energy future via industry lobbyists not directly accountable to the people, is so... China.


IECA Members

Abbott Laboratories (www.abbott.com)

Ag Processing Inc (www.agp.com)

Air Liquide America L.P. (www.AirLiquide.com)

Air Products and Chemicals, Inc. (www.airproducts.com)

BASF Corporation (www.basf.com)

Celanese Corporation (www.celanese.com)

Coors Brewing Company (www.coors.com)

Delphi Corporation (www.delphi.com)

Dow Corning Corporation (www.dowcorning.com)

Eastman Chemical Company (www.eastmanchemical.com)

FMC Corporation (www.fmc.com)

General Shale Brick (www.generalshale.com)

Holcim, Inc. (www.holcim.com)

Huntsman Corporation (www.huntsman.com)

International Paper Company (www.internationalpaper.com)

IPSCO Inc (www.ipsco.com)

Lyondell Chemical Company (www.lyondell.com)

MeadWestvaco Corporation (www.meadwestvaco.com)

NewPage Corporation (www.newpage.com)

Nucor Corporation (www.nucor.com)

Ormet Corporation (www.ormet.com)

Owens Corning Corporation (www.owenscorning.com)

Riceland Foods, Inc. (www.riceland.com)

Rohm and Haas Company (www.rohmhaas.com)

Sasol North America Inc. (www.sasol.com)

Terra Industries, Inc (www.terraindustries.com)

The Timken Company (www.timken.com)

Tyson Foods (www.tyson.com)

US Steel Corporation (www.ussteel.com)

See, also, this New York Times piece on the new executive class coming to corporate america the Sustain-a-Veeps

Via:: Dow Jones Newswires.
Image credit:: US EIA, US Natural Gas Reserves

Tags: Coal | Electricity

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