Europe, the overwhelming majority of which has failed to meet the prescribed targets of the Kyoto Protocol, stands to benefit from the implementation of a U.S. domestic cap-and-trade policy that specifically targets American refineries. Even before the enactment of such a policy, domestic refiners face significant competition from foreign producers. Andrew Reed, an analyst with Energy Security Analysis Inc., told Bloomberg in May 2009 that “Europe will export to the U.S. as much gasoline as the U.S. will take.” Mr. Reed also stated that “[r]egardless of price, they will be looking to unload in the U.S.” China, Brazil and India, too, are already poised to take advantage of the circumstances. As an October 6 editorial in the UK’s Independent newspaper article stated:
"The financial crisis has left [the United States] hobbled with significant government and household debts and sharply reduced prospects for growth. Developing nations such as China, Brazil and India, on the other hand, have weathered the economic storm significantly better. So while this latest proposal [to move away from the dollar in oil trading] is born of financial calculation, it is also a reflection of a new economic world order."
S. 1733, and its House companion H.R. 2454, would economically disadvantage American refiners to the benefit of foreign entities and “a new economic world order” at a time when our nation is trying to regain its footing in the global markets. For the domestic refining community, NPRA estimates the compliance cost for refinery process emissions under cap-and-trade legislation, with carbon priced conservatively at $20 a ton, would be $4.1 billion a year. The cost associated with consumer emissions, for which refiners are inexplicably made accountable under both bills, would be $63 billion a year. At the conservative cost of more than $67 billion a year – which would actually increase year after year as the cost of carbon rises – cap-and-trade legislation will drive domestic gasoline and diesel production overseas, resulting in lost jobs for American workers and the outsourcing of our nation’s energy security to unstable regions of the world. The Energy Policy Research Foundation, Inc. (EPRINC) states in a new report that “[i]n a scenario where [carbon] allowance costs reach $30/ton and 90% pass-through of product emission costs, total capacity losses could rise to as much as 8.0 million barrels per day and [direct and indirect refining] employment job losses could approach 400,000.”
In other words, S. 1733 and H.R. 2454 would reduce domestic refining operations, export carbon dioxide emissions to other nations – thus doing nothing to address the global nature of the issue – and take American jobs along with them.