Politics & Government

Businesses see employment upside with carbon cap

Wind turbines in and around Sweetwater, Texas.
Wind turbines in and around Sweetwater, Texas. Jill Johnson / Fort Worth Star-Telegram / MCT

WASHINGTON — One question was on everyone's mind during hearings this week on a new U.S. energy policy: What would it do to the country's jobs and the American lifestyle?

"It's about jobs," and whether the new policies would help or hurt the country's economy, said Rep. Peter Welch, D-Vt. "It's not just political. It's a legitimate concern."

Congress has just started debate over a 648-page draft of renewable-fuels, energy-efficiency and global-warming legislation, called the American Clean Energy and Security Act of 2009. The House Energy and Commerce Committee held hearings all week. Hammering out details is likely to run into next year before the House of Representatives and the Senate are ready to send a final bill to President Barack Obama.

Because so much of the legislation remains to be worked out, experts can't tell consumers how much more they might have to pay for energy. Some said during the hearings that using energy more efficiently could lower bills even if prices rose. Others said that with the right mix of incentives and rebates in the legislation, the cost to the economy could be low. Skeptics dismissed the promise of efficiency and renewable energy and said that high energy prices would drive up the cost of everything and send jobs overseas.

Against the worries and uncertainty, however, many businesspeople sounded optimistic. Executives of leading corporations, as well as energy entrepreneurs, said that a shift away from dirty fuels offered opportunities.

For example:

  • Jim Robo, the president and chief operating officer of FPL Group, the country's largest producer of energy from the wind and sun, said, "We've barely begun to tap this unlimited resource." He called for Congress to set a renewable-energy standard that would require all states to get a portion of energy from renewable sources.
  • Dan Reicher, the director of climate change and energy initiatives at Google Inc., which has invested in ways to make renewable energy cheaper than coal, said that every state could meet the requirements of a renewable-energy standard. Reicher said that geothermal energy was widely available and that it would become economical to tap the Earth's heat for power as drilling technology improved.
  • David Crane, the president and chief executive officer of NRG Energy Inc., an energy company that uses coal, natural gas and other fuels, acknowledged that his company is a major emitter of greenhouse gases but nonetheless saw growth ahead:
  • "For us, being capitalists and believing in free-market solutions, the opportunity to change the society we live in and change the electric industry, this is a high-growth opportunity for us," he said. Demand for his company's product — electricity — will stay high, he added, predicting that the electric car will be "the air conditioner of the 21st century."

  • Meg McDonald, the director of global issues for Alcoa Inc., said that recycling and energy efficiency measures already had helped the company cut costs. More aluminum will be used in future lighter vehicles and in more energy-efficient buildings, she predicted. "It will be good for us long term."
  • Congress also must decide how to set up a system for reducing greenhouse gas emissions. The draft bill calls for the government to sell permits to companies for limited amounts of greenhouse gas pollution. An overall limit would be reduced each year. Companies that needed more permits could buy them from those with higher efficiency that needed fewer.

    Still unanswered is what the government would do with the money from the permit sales. One proposal is to give a large portion back to consumers as rebates. Another is to give some permits free to businesses that depend heavily on fossil fuels and could be put at a trade disadvantage. Executives from Alcoa, Duke Energy, NRG Energy and other companies told lawmakers they'd drop their support for the bill unless they got free permits.

    Rep. Fred Upton, R-Mich., said he wanted to see greenhouse gas emissions reduced and incentives put in place for cleaner energy, but he didn't want U.S. businesses put at a disadvantage compared with those in countries such as China that aren't expected to put similarly tough rules in place soon.

    Rep. Edward Markey, D-Mass., a co-author of the early version of the climate bill, said he also was concerned about protecting competitiveness.

    Congress will be debating parts of the legislation, such as rebates and tariffs, that are designed to protect businesses from such losses.

    Many businesspeople told lawmakers that what they really needed are the rules of the game for the long term. Higher fossil-fuel prices would be an incentive for investments in renewable energy, for example.

    A carbon cap would "be one of the biggest growth engines this country has ever seen," said Jack Oswald, the chief executive officer of SynGest of San Francisco, who didn't testify but was in Washington to speak privately with lawmakers.

    Oswald's company plans to make fuel and nitrogen fertilizer from crop wastes such as corncobs, using renewable feedstocks instead of fossil fuels. Oswald foresees 200 plants, each employing 200 people, that would produce U.S.-made fertilizer, reducing the need to buy it from abroad.

    He said it was important for the United States to be first with clean-energy innovations so that the products were made here, not imported.

    Asian and European countries already have government policies in place that provide incentives for using renewable energy.

    Without supportive policies here, the United States will lose leadership to other countries, said Nicole Lederer, a co-founder of Environmental Entrepreneurs, a business group.

    In separate testimony, Energy Secretary Steven Chu told lawmakers at one of the hearings that he worried about the same thing.

    Chu said two dangers could weaken the United States. One is that the world could fail to reduce global emissions in time to avoid dangerous climate shifts, and the other is that "we fail to seize the opportunity to lead, and clean energy jobs will be created elsewhere."


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