The People of America's Oil and Natural Gas Indusry

What Was the House Thinking?

Jane Van Ryan

Jane Van Ryan
Posted August 25, 2009

How did you get to work, to school, or to the grocery store today? If you're like most Americans, you took some form of transportation powered by gasoline or diesel fuel. In the United States, where personal mobility is critically important, fuels refined from oil are a necessity. They power cars, trucks, buses, airplanes, trains, and are integral to the American way of life.

So, why did the U.S. House of Representatives pass a bill that could force the United States to depend on other countries for transportation fuels?

A study conducted by EnSys Energy and commissioned by API shows the House-passed Waxman-Markey climate bill could double the amount of refined products imported into the United States, reducing this nation's energy security and sending refinery jobs overseas.

If the Waxman-Markey bill is enacted, U.S. refiners would be held responsible for 44 percent of carbon emissions--the emissions from their own operations plus all of the carbon resulting from transportation sources. But the bill would give U.S. refiners only 2.25 percent of the carbon allowances, which means they'd have to purchase carbon credits. That not only raises their cost of doing business, but also it puts them at a competitive disadvantage to foreign refiners who don't have to buy carbon credits.

According to EnSys Energy, U.S. refining throughput could plummet by as much as nearly 25 percent (4.4 million barrels a day), U.S. refinery capacity could fall sharply, and investment in U.S. refineries could fall by as much $90 billion, a decline of 88 percent, by 2030. Furthermore, since foreign refineries often don't have to adhere to U.S. stringent pollution standards, the lower emissions from U.S. refineries would be offset by emission increases in other countries.

At least one U.S. refinery already has gone on the record saying it would have to shut down if the bill were passed.

What were members of Congress thinking? They passed a bill that could make it harder for refiners to stay in business, reduce refining capacity, reduce U.S. energy security, and ship jobs and pollution overseas. Let's hope the Senate rejects this bill and crafts a climate bill that does not place an unfair burden on the producers and consumers of transportation fuels.