One of the lead news items in this issue covers the Clean Energy Jobs and American Power Act developed by Senators John Kerry (D-Mass.) and Joseph Lieberman (I-Conn.). Rumor has it that Lindsey Graham (R ‘S.C.) was also involved in the process, though he evaporated from the scene the first chance he could when it became apparent that big government, economy-damaging legislation is not winning the hearts and minds of Americans these days. It should also be noted that passing this legislation will be an uphill battle, but then so was the healthcare fight.
Basically, the APA is a massaged version of previous cap-and-trade legislation touched up a bit for more political/public acceptance. But at a glance it’s hard to see how it’s all that different. A cap and trade hidden tax to fund Washington spending and make the financial sector happy ‘ check. Carbon level goals not found since the pre-industrial age ‘ check. Expanded government carbon bureaucracy ‘ check. Mechanisms to transfer of wealth to the developing world ‘ check. Much higher transition allowance support for natural gas utilities than fuel oil and propane ‘ check.
What’s really interesting is the support APA has received among the major integrated oil companies. Shell, ConocoPhillips and BP jump out most prominently, not that any of the others seem to be putting up much of a fight. And why should they? Think the pharmaceutical industry and the recently passed healthcare legislation.
Sure, motor fuels take a hit, but it’s really left up to the retailers to explain the ‘pass along” costs to their customers. Unlike an honest carbon tax, Washington legislators hope to dodge a direct link to higher gasoline and diesel and, for that matter, utility costs.
As noted fuel oil marketers and dealers don’t get much love in the process. But then, with the integrated oil companies having significant investments in natural gas (recently expanded investments actually), their established trading expertise and perhaps a little extra drilling thrown in here and there, I guess you just have to break a few downstream eggs to make the upstream omelet.
As the title of the editorial asks, what’s in it for you? I really can’t see much myself. If you are associated with a major integrated oil company you might want to ask them that question yourself.