US Senate won’t pursue cap-and-trade in current legislation

While this likely gives the steel industry a reprieve from costly and intrusive new regulations, if the Senate had gone ahead and implemented some sort of cap-and-trade scheme, the move would at least have given domestic producers clarity as to what would be required of them from the federal government going forward. As it stands now, the US Environmental Protection Agency, as well as numerous state environmental agencies, could begin regulating greenhouse gas emissions from large sources such as steelmakers next year. This is likely to create a conflicting and confusing regulatory environment from state to state. All the while, steelmakers in other countries with less stringent requirements will continue to pump GHGs into the environment, essentially unfettered. And the global environment will continue to suffer what could soon be irreversible damage. What’s needed is a global solution to address what really should be the goal of governments and industry officials everywhere – fewer carbon emissions.

SBB 23 July 2010 A controversial cap-and-trade scheme apparently will not be part of energy legislation expected to come out of the US Senate, Steel Business Briefing understands.

Senate Majority Leader Harry Reid, a Nevada Democrat, told reporters in Washington, DC, yesterday that there are not enough votes in the legislative body to push through a far-reaching climate bill including carbon emissions reduction initiatives. Reid instead will look to pass energy legislation aimed at expanding clean energy efforts and more tightly regulating oil and gas drilling, according to published reports.

It was unclear late yesterday whether Reid and the Obama administration would pursue cap-and-trade in separate legislation, going forward.

The US House previously passed cap-and-trade legislation that would have significantly impacted large carbon emitters, such as steelmakers. Industry officials and trade groups had lobbied against their implementation, saying they would put American manufacturers at a disadvantage against competitors in other nations with less stringent requirements. Instead, the industry pushed for a global approach to reducing greenhouse gases.

The American Iron and Steel Institute welcomed the news out of the Senate.

“The cap-and-trade bill as structured would have caused harm to the competitiveness of energy-intensive, trade-exposed manufacturers, such as the steel industry,” AISI president Thomas Gibson said in a statement sent to SBB. “We look forward to working with Congress in taking a clean sheet approach toward developing legislation that will lower emissions without causing the loss of millions of valuable American manufacturing jobs.”


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