Some remnant of senseObama opposes global warming tariffsBARACK Obama has expressed opposition to a provision that would impose trade penalties on countries that did not accept limits on global warming pollution. Obama has told a small group of reporters at the White House that, at a time when the global economy is still deep in recession, he thought "we have to be very careful about sending any protectionist signals out there", The New York Times reported. "I think there may be other ways of doing it than with a tariff approach," the president was quoted by the paper as saying.
On Friday. the US House of Representatives narrowly passed legislation to limit pollution blamed for global warming, handing Obama a hard-fought major victory. By a 219-212 margin, lawmakers voted for the first time in US history to limit heat-trapping carbon emissions and shift the US economy to cleaner energy in a move backers said will create jobs and restore Washington's shaky leadership on climate change ahead of global talks set for December. The Senate is still to vote on the measure.
Obama, hoping to build momentum in the Senate after the narrow victory in the House, delayed the start of a Sunday golf game to speak to a small group of reporters in the Oval Office, The Times said. He acknowledged that the initial targets for reducing emissions of heat-trapping gases set by the House bill were quite modest and would probably not satisfy the governments of other countries or many environmental groups, the report said.
But he said he hoped to build on those early targets in fashioning a more robust program in the future as part of his administration's efforts to move the nation from an economy based on fossil fuels toward one built on renewable energy sources.
SOURCEPolar bear expert barred from conference by WarmistsNo dissent from the Warmist Gospel allowed: Mitchell Taylor, who has studied the bears for 30 years, was told his views 'are extremely unhelpful’Over the coming days a curiously revealing event will be taking place in Copenhagen. Top of the agenda at a meeting of the Polar Bear Specialist Group (set up under the International Union for the Conservation of Nature/Species Survival Commission) will be the need to produce a suitably scary report on how polar bears are being threatened with extinction by man-made global warming.
This is one of a steady drizzle of events planned to stoke up alarm in the run-up to the UN's major conference on climate change in Copenhagen next December. But one of the world's leading experts on polar bears has been told to stay away from this week's meeting, specifically because his views on global warming do not accord with those of the rest of the group.
Dr Mitchell Taylor has been researching the status and management of polar bears in Canada and around the Arctic Circle for 30 years, as both an academic and a government employee. More than once since 2006 he has made headlines by insisting that polar bear numbers, far from decreasing, are much higher than they were 30 years ago. Of the 19 different bear populations, almost all are increasing or at optimum levels, only two have for local reasons modestly declined.
Dr Taylor agrees that the Arctic has been warming over the last 30 years. But he ascribes this not to rising levels of CO2 – as is dictated by the computer models of the UN's Intergovernmental Panel on Climate Change and believed by his PBSG colleagues – but to currents bringing warm water into the Arctic from the Pacific and the effect of winds blowing in from the Bering Sea.
He has also observed, however, how the melting of Arctic ice, supposedly threatening the survival of the bears, has rocketed to the top of the warmists' agenda as their most iconic single cause. The famous photograph of two bears standing forlornly on a melting iceberg was produced thousands of times by Al Gore, the WWF and others as an emblem of how the bears faced extinction – until last year the photographer, Amanda Byrd, revealed that the bears, just off the Alaska coast, were in no danger. Her picture had nothing to do with global warming and was only taken because the wind-sculpted ice they were standing on made such a striking image.
Dr Taylor had obtained funding to attend this week's meeting of the PBSG, but this was voted down by its members because of his views on global warming. The chairman, Dr Andy Derocher, a former university pupil of Dr Taylor's, frankly explained in an email (which I was not sent by Dr Taylor) that his rejection had nothing to do with his undoubted expertise on polar bears: "it was the position you've taken on global warming that brought opposition".
Dr Taylor was told that his views running "counter to human-induced climate change are extremely unhelpful". His signing of the Manhattan Declaration – a statement by 500 scientists that the causes of climate change are not CO2 but natural, such as changes in the radiation of the sun and ocean currents – was "inconsistent with the position taken by the PBSG".
So, as the great Copenhagen bandwagon rolls on, stand by this week for reports along the lines of "scientists say polar bears are threatened with extinction by vanishing Arctic ice". But also check out Anthony Watt's Watts Up With That website for the latest news of what is actually happening in the Arctic. The average temperature at midsummer is still below zero, the latest date that this has happened in 50 years of record-keeping. After last year's recovery from its September 2007 low, this year's ice melt is likely to be substantially less than for some time. The bears are doing fine.
SOURCEEnergy Myths and RealitiesTalk to graduands by by Keith O. Rattie, CEO of Questar, a Utah gas companyGood morning, everyone. I’m honored to join you today.
My perspective on global warming changed when I began to understand the limitations of the computer models that scientists have built to predict future warming. If the only variable driving the earth’s climate were manmade CO2 then there’d be no debate – global average temperatures would increase by a harmless one degree over the next 100 years. But the earth’s climate is what engineers call a “non-linear, dynamic system”. The models have dozens of inputs. Many are little more than the opinion of the scientist – in some cases, just a guess. The sun, for example, is by far the biggest driver of the earth’s climate. But the intensity of solar radiation from the sun varies over time in ways that can’t be accurately modeled. Another example, water vapor is a far more potent greenhouse gas than CO2. [The media now calls CO2 a "pollutant". If CO2 is a "pollutant" then water vapor is also a "pollutant" – that's absurd, but I digress]. Some scientists believe clouds amplify human CO2 forcing, others believe precipitation acts as the earth’s thermostat. But scientists do not agree on how to model clouds, precipitation, and evaporation, thus there’s no consensus on this fundamental issue.
But the reality for American consumers is that whether you buy that the science is settled or not, the political science is settled. With the media cheering them on, Congress has promised to “do something”. CO2 regulation is coming, whether it will do any good or not. Indeed, President Obama’s hope of shrinking the now the massive federal budget deficit depends on vast new revenues from a tax on carbon energy – so called “cap and trade”. Harry Reid has promised cap and trade legislation by August.
Under cap-and-trade, the government would try to create a market for CO2 by selling credits to companies that emit CO2. They would set a cap for the maximum amount of CO2 emissions. Over time, the cap would ratchet down. In theory, this will force companies to invest in lower-carbon technologies, thus reducing emissions to avoid the cost of buying credits from other companies that have already met their emissions goals. The costs of the credits would be passed on to consumers. Because virtually everything we do and consume in modern life has a carbon footprint the cost of just about everything will go up. This in theory will cause each of us to choose products that have a lower carbon footprint. Any way you slice it, cap and trade is a tax on the way we live our lives – one designed to produce a windfall for government.
The long term goal with cap and trade is ‘80 by 50′– an 80% reduction in CO2 emissions by 2050. Let’s do the easy math on what ‘80 by 50′ means to you, using Utah as an example. Utah’s carbon footprint today is about 66 MM tons of CO2 per year. Utah’s population today is 2.6 MM. You divide those two numbers, and the average Utahan today has a carbon footprint of about 25 tons of CO2 per year. An 80% reduction in Utah’s carbon footprint by 2050 implies a reduction from 66 MM tons today to about 13 MM tons per year by 2050. But Utah’s population is growing at over 2% per year, so by 2050 there will be about 6 MM people living in this state. 13 MM tons divided by 6 MM people = 2.2 tons per person per year. Under ‘80 by 50′ by the time you folks reach my age you’ll have to live your lives with an annual carbon allowance of no more than 2.2 tons of CO2 per year.
Question: when was the last time Utah’s carbon footprint was as low as 2.2 tons per person per year? Answer: probably not since Brigham Young and the Mormon pioneers first entered the Salt Lake Valley (1847). You reach a similar conclusion when you do the math on ‘80 by 50′ for the entire U.S. ‘80 by 50′ would require a reduction in America’s CO2 emissions from about 20 tons per person per year today, to about 2 tons per person per year in 2050. When was the last time America’s carbon footprint was as low as 2 tons per person per year? Probably not since the Pilgrims arrived at Plymouth Rock in 1620.
In short, ‘80 by 50′ means that by the time you folks reach my age, you won’t be allowed to use anything made with – or made possible by – fossil fuels.
So I want to focus you on this critical question: “How on God’s green earth – pun intended – are you going to do what my generation said we’d do but didn’t – and that’s wean yourselves from fossil fuels in just four decades?” that’s a question that each of you, and indeed, all Americans need to ask now – because when it comes to “how” there clearly is no consensus. Simply put, with today’s energy technologies, we can’t get there from here.
The hallmark of this dilemma is our inability to reconcile our prosperity and our way of life with our environmental ideals. We like our cars. We like our freedom to “move about the country” – drive to work, fly to conferences, visit distant friends and family. We aspire to own the biggest house we can afford. We like to keep our homes and offices warm in the winter, cool in the summer. We like devices that use electricity – computers, flat screen TVs, cell phones, the Internet, and many other conveniences of modern life that come with a power cord. We like food that’s low cost, high quality, and free of bugs – which means farmers must use fertilizers and pesticides made from fossil fuels. We like things made of plastic and clothes made with synthetic fibers – and all of these things depend on abundant, affordable, growing supplies of energy.
And guess what? We share this planet with 6.2 billion other people who all want the same things.
America’s energy use has been growing at 1-2% per year, driven by population growth and prosperity. But while our way of life depends on ever-increasing amounts of energy, we’re downright schizophrenic when it comes to the things that energy companies must do to deliver the energy that makes modern life possible.
We want energy security – we don’t like being dependent on foreign oil. But we also don’t like drilling in the U.S. Millions of acres of prospective onshore public lands here in the Rockies plus the entire east and west coast of the U.S. are off-limits to drilling for a variety of reasons. We hate paying $2 per gallon for gasoline – but not as much as we hate the refineries that turn unusable crude oil into gasoline. We haven’t allowed anyone to build a new refinery in the U.S. in over 30 years. We expect the lights to come on when we flip the switch, but we don’t like coal, the source of 40% of our electricity – it’s dirty and mining scars the earth. We also don’t like nuclear power, the source of nearly 20% of our electricity – it’s clean, France likes it, but we’re afraid of it. Hydropower is clean and renewable. But it too has been blacklisted – dams hurt fish.
We don’t want pollution of any kind, in any amount, but we also don’t want to be asked: “how much are we willing to pay for environmental perfection?” When it comes to global warming, Time magazine tells us to “be worried, be very worried” – and we say we are – but we don’t act that way. Let me suggest that our conversation about how to reduce CO2 emissions must begin with a few “inconvenient” realities.
Reality 1: Worldwide demand for energy will grow by 30-50% over the next two decades – and more than double by the time you’re my age. Simply put, America and the rest of the world will need all the energy that markets can deliver.
Reality 2: There are no near-term alternatives to oil, natural gas, and coal. Like it or not, the world runs on fossil fuels, and it will for decades to come. The U.S. government’s own forecast shows that fossil fuels will supply about 85% of world energy demand in 2030 – roughly the same as today. Yes, someday the world may run on alternatives. But that day is still a long way off. It’s not about will. It’s not about who’s in the White House. It’s about thermodynamics and economics.
Now, I was told back in the 1970s what you’re being told today: that wind and solar power are ‘alternatives’ to fossil fuels. A more honest description would be ’supplements’. Taken together, wind and solar power today account for just one-sixth of 1% of America’s annual energy usage. Let me repeat that statistic – one-sixth of 1%.
Undaunted by this, President Obama proposes to double wind and solar power consumption in this country by the end of his first term. Great – that means the line on this pie chart would become a slightly thicker line in four years. I would point out that wind and solar power doubled in just the last three years of the Bush administration. Granted, W. started from a smaller baseline, so doubling again over the next four years will be a taller order. But if President Obama’s goal is achieved, wind and solar together will grow from one-sixth of 1% to one-third of 1% of total primary energy use – and that assumes U.S. energy consumption remains flat, which of course it will not.
The problems with wind and solar power become apparent when you look at their footprint. To generate electricity comparable to a 1,000 MW gas-fired power plant you’d have to build a wind farm with at least 500 very tall windmills occupying more than 30,000 acres of land. Then there’s solar power. I’m holding a Denver Post article that tells the story of an 8.2 MW solar-power plant built on 82 acres in Colorado. The Post proudly hails it “America’s most productive utility-scale solar electricity plant”. But when you account for the fact that the sun doesn’t always shine, you’d need over 250 of these plants, on over 20,000 acres to replace just one 1,000 MW gas-fired power plant that can be built on less than 40 acres.
The Salt Lake Tribune recently celebrated the startup of a 14 MW geothermal plant near Beaver, Utah. that’s wonderful! But the Tribune failed to put 14 MW into perspective. Utah has over 7,000 MW of installed generating capacity, primarily coal. America has about 1,000,000 MW of installed capacity. Because U.S. demand for electricity has been growing at 1-2 % per year, on average we’ve been adding 10-20,000 MW of new capacity every year to keep pace with growth. Around the world coal demand is booming – 200,000 MW of new coal capacity is under construction, over 30,000 MW in China alone. In fact, there are 30 coal plants under construction in the U.S. today that when complete will burn about 70 million tons of coal per year.
Why has my generation failed to develop wind and solar? Because our energy choices are ruthlessly ruled, not by political judgments, but by the immutable laws of thermodynamics. In engineer-speak, turning diffused sources of energy such as photons in sunlight or the kinetic energy in wind requires massive investment to concentrate that energy into a form that’s usable on any meaningful scale. What’s more, the wind doesn’t always blow and the sun doesn’t always shine. Unless or until there’s a major breakthrough in high-density electricity storage – a problem that has confounded scientists for more than 100 years – wind and solar can never be relied upon to provide base load power.
But it’s not just thermodynamics. It’s economics. Over the past 150 years America has invested trillions of dollars in our existing energy systems – power plants, the grid, steam and gas turbines, railroads, pipelines, distribution, refineries, service stations, home heating, boilers, cars, trucks and planes, etc. Changing that infrastructure to a system based on renewable energy will take decades and massive new investment.
To be clear, we need all the wind and solar power the markets can deliver at prices we can afford. But please, let’s get real – wind and solar are not “alternatives” to fossil fuels.
Reality 3: You can argue about whether global warming is a serious problem or not, but there’s no argument about the consequences of cap and trade regulation – it’s going to drive the cost of energy painfully higher. that’s the whole point of cap and trade – to drive up the cost of fossil energy so that otherwise uneconomic “alternatives” can compete. Some put the total cost of cap and trade to U.S. consumers at $2 trillion over the next decade and $6 trillion between now and 2050 – not to mention the net loss of jobs in energy-intensive industries that must compete in global markets.
Given this staggering cost, I hope you’ll ask: will cap and trade work? If Europe’s experience with cap and trade is an indication, the answer is “no”.
With much fanfare, the European Union (EU) adopted a cap and trade scheme in an effort to meet their Kyoto commitments to cut CO2 emissions to below 1990 levels by 2012. How are they doing? So far, all but one EU country is getting an “F”. Since 2000 Europe’s CO2 emissions per unit of GDP have grown faster than the U.S.! The U.S. of course did not implement Kyoto – nor did over 150 other countries. There’s a good reason why most of the world rejected Kyoto: with today’s energy technologies there’s no way to sever the link between CO2 emissions and modern life. Europe’s cap and trade scheme was designed to fail – and it’s working as designed....
Reality 4: Even if America does cut CO2 emissions, those same computer models that predict manmade warming over the next century also predict that Kyoto-type CO2 cuts would have no discernible impact on global temperatures for decades, if ever. When was the last time you read that in the paper? We’ve been told that Kyoto was “just a first step.” Your generation may want to ask: “what’s the second step?”
That begs another question: “how much are Americans willing to pay for ‘a first step’ that has no discernible effect on global climate?” The answer here in Utah is: not much, according to a poll conducted by Dan Jones & Associates published in the Deseret News. 63% of those surveyed said they worry about global warming. But when asked how much they’d be willing to see their electricity bills go up to help cut CO2 emissions, only half were willing to pay more for electricity. Only 18% were willing to see their power bill go up by 10% or more. Only 3% were willing to see their power bill go up by 20%.....
Let me close by returning to the lessons my generation learned from the 1970s energy crisis. We learned that energy choices favored by politicians but not confirmed by markets are destined to fail. If history has taught us anything it’s that we should resist the temptation to ask politicians to substitute their judgments for that of the market, and let markets determine how much energy gets used, what types of energy get used, where, how and by whom energy gets used. In truth, no source of energy is perfect, thus only markets can weigh the pros and cons of each source. Government’s role is to set reasonable standards for environmental performance, and make sure markets work.
I’ve covered a lot of ground this morning. I hope I’ve challenged your thinking about your energy future. Mostly, I hope you continue to enjoy freedom, prosperity – and abundant supplies of energy at prices you can afford!
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HEREThe Gauleiter complex in Britain(Gauleiters were local Nazi officials. Post from Prof. Brignell)
In these pages we have frequently remarked that the British experience should be taken as a warning of what could happen in the USA . Nevertheless, Americans have gone ahead with their own experiment in authoritarian socialism. Typical of the phenomenon is hurriedly and ill drafted legislation that puts power into the hands of minor and unelected officials. It is an unfortunate characteristic of some people that such power goes to their heads, and many of those in positions that once were intended to represent servants of the people now come to regard themselves as the masters. In Britain much of the primary legislation comes directly from Brussels in the form of “Directives”, which are diktats, emerging from a secretive bureaucracy, that have never been properly debated or received the benefit of expert advice.
American politicians now have their own version of this process, as exemplified by the bizarre goings-on that led to the House of Representatives passing a weirdly inapposite Climate Change Bill. The cost of the Global Warming Myth, already staggering, is about to increase by orders of magnitude, tantamount to economic suicide.
One of the many dubious claims of the proponents is that it will create Green Jobs. This is a dysphemism for a new class of people living off the taxpayer. A major sub-class is The Snoopers. We had them in the UK during the post-war Labour Government. They were tasked with such duties as preventing private enterprise. It was largely Winston Churchill’s successful campaign against The Snoopers that brought that spendthrift Government to an end. Nowadays opposition leaders are considerably less effective.
Now The Snoopers are back. They pry into our garbage bins, secretly film us and employ covert agents to follow us (justified by legislation originally promoted as being anti-terrorist). One couple were subjected to a prolonged stake-out to check that they were living where they claimed to be and not evading the equality rules in the educational lottery. A teenager was prosecuted for allowing a toddler to discard a sweet wrapper. Fortunately, our judges still have enough power to treat such cases with the derision they deserve. What is not disclosed is how much this snooping impoverishes the taxpayer, but it is not difficult to imagine the cost of several weeks of secret surveillance. Also typical is the fact that the actions in question were not even offences until the advent of New Labour Government. It is not only a crime to want to select a school for your child (unless you are rich), there are now so many new offences that no one, even the lawyers, knows what is legal or illegal. There are literally thousands of new crimes (including the Orwellian sounding enviro-crimes). When the Government is enacting seven new laws every day, without a semblance of proper debate, ordinary people are exposed to legal hazards of which they are completely unaware.
These are the conditions under which the Gauleiters thrive. Every citizen is threatened with the circumstances of Kafka’s Joseph K, arraigned for crimes and misdemeanours unknown, and helpless in the face of an all powerful officialdom. Furthermore, ordinary people are now encouraged to become informers. Records show that 28 Gestapo were able to rule a million people by the use of informers. Many people were wrongly arrested owing to accusations motivated by malice or revenge. When journalists enquire about cases like those mentioned above, the response always comes from someone called “A Spokesman”, anonymous and unelected. There is no comeback if they get it wrong. The ultimate insult is that the poor chumps they pick on have been forced to contribute to the inflated salaries these officials command. One of the greatest financial burdens carried by the poorer elements of society, such as pensioners, is the dramatic inflation of local taxes.
Look on this America. It is your future.
SOURCEPesky! Old light bulbs can be more efficient than the twisty monstrositiesJust as authorities in much of the Western world have moved to phase out the incandescent lightbulb, American boffins believe they have developed a process which can make the oldschool lights more efficient than energy-saving lamps. Optics boffins at the Rochester Uni in New York state say they've developed a process in which an ordinary lighbulb is zapped with a femtosecond-long pulse of extremely high-energy laser light. The laser blast travels through the glass to hit the tungsten filament, causing complex nano- and micro-structures to form on its surface.
Once the lasered light bulb is than powered up, according to the Rochester scientists, it emits a lot more light for the same energy compared to an untreated bulb - equivalent to 40 per cent energy savings. The process of lasing incandescent bulbs wouldn't be expensive, apparently, so they'd remain cheap compared to fluorescent energy-saving jobs. According to Rochester Uni:
"The process could make a light as bright as a 100-watt bulb consume less electricity than a 60-watt bulb while remaining far cheaper and radiating a more pleasant light than a fluorescent bulb. Despite the incredible intensity involved, the femtosecond laser can be powered by a simple wall outlet, meaning that when the process is refined, implementing it to augment regular light bulbs should be relatively simple."
It seems that Professor Chunlei Guo of Rochester hit upon the idea of brightening-up lightbulb filaments following earlier experiments in which he and his team used laser zapping to turn metals completely black. This worked so well that Guo and his cohorts wondered if they could reverse the process. "We fired the laser beam right through the glass of the bulb and altered a small area on the filament," says the prof. "When we lit the bulb, we could actually see this one patch was clearly brighter than the rest of the filament, but there was no change in the bulb's energy usage."
It seems that Guo and his team of lightbulb-blasting boffins can also produce other strange effects, getting incandescent bulbs to emit partially polarised or differently-coloured light - without the energy-wasting filters that would normally be necessary.
It's the efficiency-enhancement aspect of the studies which could make headlines, however. Both the US and European Union governments are now committed to firm timetables which will see incandescent bulbs phased out in favour of more energy-efficient alternatives, such as fluorescents. This is being done in order to save energy and so lower carbon emissions. But if it's as simple as Guo suggests to enhance an incandescent with his laser process, this may turn out to have been an unnecessary or even retrograde step.
Guo's research has been accepted for publication by the journal Applied Physics Letters, but isn't out yet. In the meantime, there's a pop-sci release from the university here.
SOURCE (See the original for links)
Bye, Bye Jobs! U.S. oil companies may cope with climate laws by 'closing fuel plants, cutting capital spending and increasing imports'America’s biggest oil companies will probably cope with U.S. carbon legislation by closing fuel plants, cutting capital spending and increasing imports. Under the Waxman-Markey climate bill that may be voted on today by the U.S. House, refiners would have to buy allowances for carbon dioxide spewed from their plants and from vehicles when motorists burn their fuel. Imports would need permits only for the latter, which ConocoPhillips Chief Executive Officer Jim Mulva said would create a competitive imbalance.
“It will lead to the opportunity for foreign sources to bring in transportation fuels at a lower cost, which will have an adverse impact to our industry, potential shutdown of refineries and investment and, ultimately, employment,” Mulva said in a June 16 interview in Detroit. Houston-based ConocoPhillips has the second-largest U.S. refining capacity.
The same amount of gasoline that would have $1 in carbon costs imposed if it were domestic would have 10 cents less added if it were imported, according to energy consulting firm Wood Mackenzie in Houston. Contrary to President Barack Obama’s goal of reducing dependence on overseas energy suppliers, the bill would incent U.S. refiners to import more fuel, said Clayton Mahaffey, an analyst at RedChip Cos. in Maitland, Florida. “They’ll be searching the globe for refined products that don’t carry the same level of carbon costs,” said Mahaffey, a former Exxon Corp. refinery manager.
The equivalent of one in six U.S. refineries probably would close by 2020 as the cost of carbon allowances erases profits, according to the American Petroleum Institute, a Washington trade group known as API. Carbon permits would add 77 cents a gallon to the price of gasoline, said Russell Jones, the API’s senior economic adviser. “Because it’s going to be more expensive to produce the stuff, refiners will slow down production and cut back on inventories to squeeze every penny of profit they can from the system,” said Geoffrey Styles, founder of GSW Strategy Group LLC in Vienna, Virginia. “We will end up with less domestic product on the market and a greater reliance on imports, all of which means higher, more volatile prices.”
U.S. motorists, already facing the steepest jump in gasoline prices in 18 years, would bear the brunt as refiners pass on added costs, Exxon Mobil Corp. Chief Executive Officer Rex Tillerson told reporters after a May 27 meeting in Dallas.
“U.S. refineries get 2 percent of allowances to cover any increases in costs they may incur,” said Drew Hammill, a spokesman for Pelosi. Drivers, airlines and trucking companies would pay an additional $178 billion annually, or about $560 for each man, woman and child in the U.S., according to the API, whose 400 members include Irving, Texas-based Exxon Mobil and the U.S. unit of Royal Dutch Shell Plc, Europe’s largest oil company.
“That kind of price impact would significantly hurt the competitiveness of U.S. refiners versus importers,” said Glenn McGinnis, chief executive officer at Arizona Clean Fuels Yuma, a Phoenix-based company that’s attempting to build the nation’s first new refinery in three decades.
Such estimates and talk of rising imports are scare tactics that oil companies are using to wheedle concessions from lawmakers, said John Coequyt, the Sierra Club’s chief lobbyist in Washington. Refiners are trying to gain relief on carbon-permit costs that’s meant for manufacturers such as steelmakers that are threatened by foreign competition, he said. “It’s definitely saber rattling, and it’s a hell of a threat,” Coequyt said. “The strategic value of this is pretty obvious. They want to qualify for rebates under the competitiveness test, which of course they do not.”
GSW’s Styles, a former Texaco Inc. refinery and trading manager, said the risks are real. Plants unable to turn a profit under the new rules would be closed, he said.
The permit-cost imbalance would open the door for overseas refiners, such as India’s Reliance Industries Ltd., owner of the world’s largest crude-processing complex, to ship more fuel to U.S. oil companies, said Bill Holbrook, spokesman for the National Petrochemical and Refiners Association in Washington. "It’s going to give domestic refiners a distinct disadvantage,” said Holbrook, whose trade group represents such fuel makers as Chevron Corp. and Valero Energy Corp.
Companies such as San Antonio-based Valero, the biggest U.S. refiner, will respond by stepping up efforts to acquire overseas plants that can ship fuel to their home market, said Brian Youngberg, an analyst at Edward Jones & Co. in Des Peres, Missouri. Valero said last week that it will continue to seek acquisition opportunities after Total SA bought the stake it had agreed to purchase in a Netherlands refining venture.
About 2 million barrels of daily U.S. refining capacity will shut down because carbon costs will be several times the operating profits for some plants, Ihne said. That’s equivalent to 12 percent of the nation’s fuel-making capacity. Jones, the API economist, said there could be as much as 3 million barrels of idled processing capacity.
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Jim Hansen and his twin
