Manufacturers target EPA's Kerry-Lieberman analysis

A group of energy-intensive and trade-sensitive industry groups have “considerable concerns” that a recent cost analysis by the Environmental Protection Agency (EPA) for a draft climate bill offered by Sens. John Kerry (D-Mass.) and Joe Lieberman (I-Conn.) does not take into account how the plan would affect their industries.
 


The American Materials Manufacturing Alliance, in a letter to the two senators Wednesday, said the EPA analysis “relies on previous interagency analyses of other climate change legislation that had used significantly flawed assumptions.”

The “unfortunate result,” they wrote, is that it “is incomplete and draws faulty conclusions.”

The alliance represents steel, chemical, aluminum, fertilizer and other manufacturing industries that are critical to Midwestern senators that would be needed to give any climate bill a filibuster-proof 60 votes in the Senate.

The industry groups said the EPA analysis “relies heavily” on an interagency study performed last year on then-pending energy and cap-and-trade legislation in the House.

The groups say the EPA ignored the impact on coal-fired utilities from that House bill and falsely assumed the industries would be able to reduce their energy use between 20 and 45 percent by 2020. They contend the energy efficiency improvements needed to meet that goal are unrealistic without technological breakthroughs.
 


EPA’s 74-page analysis — which was made public June 15 — said the Kerry-Lieberman carbon-pricing plan would have a “relatively modest impact” on consumers. The average annual cost to households under the plan — which covers the electric utility, manufacturing and transportation sectors — would be between $79 and $146. This includes higher prices for energy consumption and other goods and services, as well as “impacts on wages and returns to capital.” The analysis did not take into account any benefits from avoiding the effects of climate change.

Last June, EPA predicted very similar annual household costs — of between $80 and $111 — for the House bill.

Kerry and Lieberman released the EPA analysis of their draft the same day they rolled out the plan and touted it as showing that it was economically feasible.

The senators also received good news Wednesday from a Congressional Budget Office (CBO) analysis indicating their plan would reduce the federal deficit by more than $19 billion in the next decade.



"There is no more room for excuses — this must be our year to pass comprehensive climate and energy legislation and begin to send a price signal on carbon," the two senators said in a statement after the CBO analysis was released. "Many of our colleagues have said they flatly oppose anything that adds a penny to the deficit, so we hope they look anew at this initiative which reduces it.”
 


But both senators have acknowledged there might not be enough votes in the Senate to pass their three-sector proposal and have said an effective alternative could be a narrower carbon-pricing plan focused on electric utilities. Senate Energy and Natural Resources Chairman Jeff Bingaman (D-N.M.) and Sen. Olympia Snowe (R-Maine) have been working on that utility-only idea, which other centrist senators in both parties have said might be politically realistic.

But Bingaman — in an interview that aired Sunday on C-SPAN — said he doubts if even a utility-only plan would be able to get 60 votes.