Industry officials warn of costs, job losses from cap-and-trade legislation

Denise McCord of the American Petroleum Institute speaks at a forum at MSC as Stuart Sanderson, right,  of the Colorado Mining Association listens.

Energy consumers in western Colorado and across the nation will see higher costs for electricity, housing and travel, as well as the exporting of American jobs, under a cap-and-trade system designed to reduce carbon emissions into the atmosphere, four speakers said Wednesday.

“The cost of everything is going to go up dramatically” to support cap-and trade legislation pending before the Congress, said Rob Griffith, president of the Homebuilders Association of Western Colorado and one of the four speakers at a Grand Junction Area Chamber of Commerce energy update Wednesday evening.

About 70 people attended the meeting at Grand Mesa Hall at Mesa State College.

The idea of capping emissions of carbon dioxide and allowing utilities, industries and countries to trade carbon allowances is contained in House Bill 2454, also known as the Waxman-Markey bill, which the House passed. A different measure, S. 1733, also known as Kerry-Boxer, is awaiting action in the Senate.

Cap and trade would affect consumers of Grand Valley Power, spokesman Bill Byers said, because the rural cooperative would be required to buy allowances for emissions that exceed the 154 million pounds of carbon dioxide it emitted for the 182 million kilowatt hours that customers bought in 2005.

Assuming its customers purchase 245 million kilowatt hours of electricity in 2012, causing an additional 58,000 tons of carbon-dioxide emissions, Grand Valley Power the next year would have to purchase allowances for its excess emissions. It appears those emissions could be purchased from other utilities, nations or on Wall Street, Byers said.

At the rate of $25 per ton of excess emissions, Grand Valley Power would have to build an additional $1.4 million into its rate base for the following year, or 0.006 cents per kilowatt hour, Byers said.

Those numbers, however, are hypothetical, Byers said, adding, “The whole thing is a moving target yet.”

No one knows how much allowances will cost or the nature of the market in which they are traded and sold, he said.

Some industries, such as renewable energy, stand to benefit under the cap-and-trade system, said Stuart Sanderson, president of the Colorado Mining Association.

And natural gas, which is abundant in western Colorado, could offer benefits under cap-and-trade as a relatively clean source of energy, one audience member noted.

Still, Sanderson said, “We’re setting a dangerous precedent by turning carbon into currency” through cap-and trade, especially as world needs for electricity are projected to grow by 44 percent by 2030.

The American Petroleum Institute is opposed to the House bill and versions of the Senate measure that have emerged, even though some oil companies supported a carbon tax and others backed a variety of cap-and-trade, said Denise McCourt of the institute.

Cap-and-trade as now envisioned is “unfair to American consumers” and ultimately could drive oil refining now being done in the United States to other countries, McCourt said.

That would be an unintended consequence threatening energy security for the United States, McCourt said.


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