Federal climate legislation draws out friends and foes

Elizabeth Bluemink
AL GRILLO / The Associated Press

Alaskans are starting to get heated up over climate legislation pending in Congress.

Friends and foes in Anchorage this week are taking their ideas and concerns on the public circuit, with an anti-bill rally on Monday and a pro-bill roundtable discussion scheduled on Wednesday.

At Monday morning's downtown rally, Alaska business leaders and political conservatives argued that the bill will cook Alaska's goose: future oil and gas production, both onshore and offshore. The rally was sponsored by the American Petroleum Institute and 40 to 50 local organizations, according to local organizer Willis Lyford. The API is sponsoring roughly 20 similar rallies in cities around the country.

Nearly one-third of Alaska's workers owe their jobs to the oil industry, warned Vince Beltrami, president of the Alaska AFL-CIO, citing a recent University of Alaska Anchorage study.

"This legislation will cost jobs in the long term," Beltrami said.

The legislation is a bid to prevent significant damage from climate change by reducing greenhouse gas emissions. In Alaska, climate change has been blamed for declining sea ice, melting permafrost and costly damage to coastal communities.

If passed, the bill, titled the American Clean Energy and Security Act, would create new costs for energy producers and distributors, from refineries to coal-fired power plants, and other companies that emit greenhouse gases. Those costs would be passed along to U.S. consumers. Just how much it will cost is a major bone of contention: Many conservatives claim it will ruin the U.S. economy but Democrats say the bill's costs are relatively minor, especially when compared to the catastrophic costs of not regulating greenhouse gases.

The bill, dubbed the Waxman-Markey bill, in honor of its authors, narrowly passed the House of Representatives in June and is headed to the Senate this month.

Not all oil industry boosters are critical of the bill. Several labor unions, including Beltrami's AFL-CIO and some oil companies, including BP, Conoco Phillips and Royal Dutch Shell, have endorsed the cap-and-trade approach to limiting greenhouse gas emissions that is included in the Waxman-Markey bill.

Here's basically how cap-and-trade would work: Congress would put a cap on the total U.S. emissions of greenhouse gases and require companies and utilities to get "allowances" to emit the gases and sell petroleum-based fuel. After the government distributes a finite number of allowances, the companies and utilities would be able to buy and sell them, globally. The cost of those allowances would typically hit consumers at the gasoline pump or when paying utility bills. In June, the Congressional Budget Office estimated that the annual cost of the program would be $175 per household in 2020, when the cap will have been in effect for eight years.

But Beltrami and other speakers at Monday's rally were more pessimistic about the bill's potential costs. They said the legislation could result in U.S. energy jobs going offshore, for example, because it would be cheaper for companies to produce oil and gas elsewhere.

Another big concern touted at the rally was potential harm to Alaska's refineries. Only a handful of refineries process North Slope crude for Alaskans and the Waxman-Markey bill could put them out of business, said Tara Sweeney, a vice president for Arctic Slope Regional Corp. Arctic Slope owns Petro Star Inc., which runs refineries that produce jet fuel, diesel and other products in North Pole and Valdez.

The bill would require the refineries to purchase allowances not just for their own greenhouse gas emissions, but also for the emissions that come out of motorists' tailpipes, she said. While large refiners owned by major oil producers might be able to absorb the cost of purchasing the allowances because of oil production profits, small, independent refiners like Petro Star will "potentially be squeezed out of the market," Sweeney said, after the rally.

Starting in 2016, purchasing the allowances could cost Alaska's biggest producer of motor gasoline -- Texas-based Tesoro Corp. -- $190 million per year, said the company's Alaska spokesman Kip Knudson.

More than 150 people attended the rally at the Dena'ina Convention Center. Many in the room sported bright yellow T-shirts that said "I'm an energy citizen" that were offered for free just outside the room.

One proponent of climate legislation said he heard a lot of exaggeration. Industry-sponsored studies are producing a lot of scary cost figures that don't square with the information produced by multiple federal agencies, said Pat Lavin, an attorney for the National Wildlife Federation in Anchorage.

The average household will pay "a postage stamp per day" for the legislation, Lavin said, quoting Rep. Ed Markey, D-Mass., one of the bill's sponsors.

Lavin is one of several scheduled to speak during a roundtable discussion Wednesday night about climate change consequences in Alaska and the climate bill. The roundtable starts at 6 p.m. at the University of Alaska's Lew Haines Memorial Room. Like the rally, it is also part of a national tour, this one sponsored by the Al Gore-founded Alliance for Climate Protection.

Find Elizabeth Bluemink online at adn.com/contact/ebluemink or call 257-4317.