The People of America's Oil and Natural Gas Indusry

The Uncertainty of Waxman-Markey

Jane Van Ryan

Jane Van Ryan
Posted October 14, 2009

The Senate Energy and Natural Resources committee held a hearing this morning to examine the Waxman-Markey climate bill's potential costs and benefits. But when the senators asked direct questions about the bill's impact, the government witnesses often had difficulty answering. As one witness said, "There's a significant degree of uncertainty."

In fact, few straight answers were provided today, because federal agencies have calculated the bill's costs and benefits using models which contain a variety of assumptions. For example, in a discussion between Sen. John McCain and the Environmental Protection Agency's (EPA) Dr. Reid Harvey, it was revealed that EPA's model assumes that the United States would build nuclear power plants to reduce carbon emissions. Yet as Sen. McCain pointed out, there are no provisions in the bill that would hasten the construction of U.S. nuclear power plants.

There were, however, a few eyebrow-raising facts revealed during the hearing. Sen. Maria Cantwell confirmed that the bill would send $1.4 trillion overseas in so-called "international offsets." Dr. Douglas Elmendorf of the Congressional Budget Office revealed that the cost of administrating the Waxman-Markey bill was estimated at more than $8 billion. And he confirmed that his model shows a significant number of jobs would be lost in fossil-fuel intensive industries and in certain areas of the country. Dr. Elmendorf also said that if other countries didn't reduce their greenhouse gas emissions along with the United States, more manufacturing would go overseas.

These pronouncements and the level of uncertainty in the administration's projections caused some noticeable concern among the senators. Sen. Lisa Murkowski said, "We can't be implementing policies that are a wish and a prayer."

Sen. Bob Corker called the Waxman-Markey bill a "Rube Goldberg system" of reducing greenhouse gas emissions.

Sen. Jeff Sessions rhymed, "Oh, what a tangled web we make when first we decide to regulate."

And Sen. Sam Brownback stated, "Investment and innovation are better than taxes and regulation."

If you also are concerned about the Waxman-Markey bill and the similar Kerry-Boxer bill, take action now by contacting your senators.