Demanding All The Improvement From Drivers

I have already written how Waxman-Markey, by the way in which it allocated free carbon permits, effectively demands almost all the reduced carbon dioxide over the first decade to come from drivers  (rather than electricity consumers or utilities).  Incredibly, even coal fired power plants get what amount to a free pass, while the increasingly efficient transportation sector must bear all the burdens.

Reuters has more on this phenomenon.   The article focuses mainly on "pain to refiners" but anyone with a modicum of economic sense will know that an industry with a single digit margin is not going to bear the cost of these changes - consumers of transportation fuels will through higher prices and more uncertain availability.

Ailing U.S. oil refiners could face a crippling period of contraction under a House-approved climate change bill, making the country more dependent on imported refined products.

The so-called cap-and-trade bill narrowly passed by the House of Representatives in June would limit greenhouse gas emissions by requiring polluters to acquire permits for the carbon dioxide they spew into the atmosphere.

To soften the blow, industry would initially be granted free permits covering 85 percent of emissions. But the refining industry managed to get only 2 percent of the allowances, leaving them vulnerable to encroaching foreign companies.

The bill is "going to put them out of business," said Phil Flynn, analyst at PFGBest Research in Chicago. "I think you're going to see refiners close down, especially in this environment we're in right now."

Already, a lot of our refined products are imported from foreign refineries, and my guess is that oil companies are going to be building Asian refineries like crazy.


  1. Michael:

    I can plant 1 elm/oak/maple and offset the use of my Ford Explorer. 2 more and my house is covered. If everyone lived on 1/4th acre or larger, they could manage their carbon usage. Not that I buy AGW, but we don't need Al Gore and friends to run this top down.

  2. ElamBend:

    I met a young guy who works for Chicago Bridge and Iron (now out of Houston) the other day. He mentioned that they're starting to get more work in pre-design work, a lot of which is for refinery. He was clear-headed enough to know that not all of them would lead to actual construction, but was optimistic. When I mentioned that we (meaning the US) could use some more refinery capacity, his response as, "Oh, we consider the market for refineries in the US to be dead for the long term. Most of the work is coming from Asia, South America and Canada (Alberta).

  3. Bob Smith:

    What better way to get rid of cars and move to our walkable public-transit utopian future? No matter that public transit costs more, is less convenient, and won't reduce emissions one iota. Cars are evil, n'est-ce pas?

  4. Joseph Hertzlinger:

    This is a simple way to keep carbon caps from promoting nuclear energy.

  5. Ian Random:

    Michael, head on over to the Antiplanner and you'll see that 1/4 acre urban sprawl is being fought. They want heavily subsidized dense developments next to heavily subsidized light rail ran by dense bureaucrats.