19 May 2007

Emissions Caps and Global Warming

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Kimberly Strassel talks to coal mine operator Robert E. Murray about the impact on the US economy of carbon caps, and why some big corporations are allying with environmental activists to get them passed.

Every good party has its wet blanket. In the case of the energy industry’s merrymaking for a global warming program, the guy in the dripping bedspread is a 67-year-old, straight-talking coal-mine owner by the name of Robert E. Murray. …

“The science of global warming is speculative. But there’s nothing speculative about the damage a C02 capture program will do to this country. I know the names of many of the thousands of people — American workers, their families — whose lives will be destroyed by what has become a deceitful and hysterical campaign, perpetrated by fear-mongers in our society and by corporate executives intent on their own profits or competitive advantage. I can’t stand by and watch.” …

“Some 52% of this country’s electricity is generated from coal,” Mr. Murray says. “Global warming legislation would place arbitrary limits on the use of coal, yet there’s nothing to replace it at the same cost. There’s nuclear, but the environmentalists killed it off and aren’t about to let it come back. There’s hydro, but we’re using that everywhere we can already. There’s natural gas, but supply and pipeline capacity is limited, and it’s three times the cost of coal. Politically correct — and subsidized ‘alternative energy’ is very limited in capability and also expensive.

“So what you are really doing with a global warming program is getting rid of low-cost energy,” he says. The consequences? Americans have been fretting about losing jobs to places such as China or India, which already offer cheaper energy. “You hike the cost of energy here further, and you create a mass exodus of business out of this country.” Especially so, given that neither of those countries is about to hamstring its own economy in order to join a Kyoto-like accord. He points out that since 1990, U.S. greenhouse gas emissions have increased by 18%, while China’s have increased by 77%. Mr. Murray also notes that many countries that have joined Kyoto have already failed to meet their targets.

Mr. Murray, like most honest participants in this debate, can reel off the names of the many respected scientists who still doubt that human activity is the cause of rising temperatures. But he tends to treat the scientific debate almost as a sideshow, an excuse for not talking about what comes next. “Even if the politicians believe 100% that man is causing global warming, they still have an obligation to discuss honestly just what damage they want to inflict on American jobs and workers and people on fixed incomes, in the here and now, with their programs.”

This is where Mr. Murray really gets rolling, on his favorite subject of his fellow energy executives and the role they are playing in encouraging a mandatory C02 program. “There is this belief that since even some in the energy industry are now on board with a program, that it must be okay. No one is looking at these executives’ real motives.”

To understand those motives, you’ve first got to understand how a cap-and-trade plan works. The government would first place a cap on CO2 emissions. Each company would then be given an “allowance” for emissions. If the company produced less CO2 than allowed, it could sell the excess credits to others. If a company wanted to produce more CO2 than its allowance, it would have to buy credits. “The strategy for these folks now is to go to Washington, help design the program to suit their companies, and snap up all the carbon emission allowances,” says Mr. Murray. “The more allowances they get, the more they’ll have to sell, and the more money they’ll make . . . This has nothing to do with creating ‘regulatory certainty,’ which is how they like to sell their actions. This has to do with creating money, for their companies, off the back of an economy that will be paying more for its energy.”

Read the whole thing.

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