WASHINGTON (Reuters) - U.S. refiners on Friday blasted landmark climate change legislation that is currently making its way through Congress as an "abject policy failure," saying it could lead to an increase in imports of refined products such as gasoline and diesel.
The National Petrochemical and Refiners Association said in a statement the roughly 1,000 page bill sponsored by Representatives Henry Waxman and Edward Markey that is aimed at lowering greenhouse gas emissions would make U.S. refiners less competitive internationally.
Approved by a key House committee Thursday, the climate change legislation would require industries, including refiners, to acquire an ever-decreasing number of carbon pollution permits. Companies that still lack the technology to meet lower pollution mandates could buy more permits from companies that no longer need their full quotas.
"American refiners, who already face stiff foreign competition in the fuels markets, would be severely disadvantaged with higher compliance costs under the Waxman-Markey scheme," NPRA President Charles Drevna said.
"Foreign refiners, whose facility emissions are obviously not addressed in (the bill) and whose operating costs are much lower, will gain a distinct advantage over American businesses in the marketplace," he added.
Drevna said the bill could even inadvertently lead to increased global greenhouse gas emissions by causing more production by foreign refiners with less environmental restrictions.
The legislation being considered would initially give the vast majority of carbon permits to industries for free, a far cry from the Obama administration's early calls to auction 100 percent of the permits.
Oil refiners are slated to get 2 percent of allowances, while other industries such as companies that distribute electricity to local customers were allotted 30 percent and heavy industries like cement and steel would receive 15 percent.
NPRA and other oil and natural gas industry groups say the distribution of permits favors some sectors to the detriment of others.
"While the bill has laudable environmental and economic goals, its inequitable system of allocations remains intact and if enacted would have a disproportionate adverse impact on consumers, businesses and producers of gasoline, diesel fuel, jet fuel, crude oil and natural gas," American Petroleum Institute President Jack Gerard said in statement.
The full House could vote on the climate bill by August after other committees review and possibly refine the legislation.
(Reporting by Ayesha Rascoe)
http://www.reuters.com/article/GCA-GreenBusiness/idUSTRE54L5DW20090522
