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Climate Change

Background: On May 21, 2009, the House Energy and Commerce Committee agreed 33 to 25 to report the American Clean Energy and Security Act of 2009 (H.R. 2454) to the House of Representatives – fulfilling Chairman Henry Waxman’s (D-CA) pledge to move a cap-and-trade bill through Committee by the Memorial Day Congressional recess. 

Chairman Waxman and Energy and Environment Subcommittee Chairman Ed Markey (D-MA) released a discussion draft of the bill on March 31st.  A substantially revised version of the bill was used as the base bill for the Committee mark-up.  The new version would place a cap on greenhouse gas emissions from covered sources at 3% below 2005 emission levels starting in 2012, 17% below 2005 levels by 2020, and 83% below 2005 levels by 2050.  The revised draft also included, for the first time, detailed emission allowance allocation provisions.  Local electric and natural gas distribution companies, and energy-intensive and trade-exposed industries would receive a significant number of free allowances through 2025.  

Impact: Energy prices are already high, but Congress wants to increase them even more, all in the name of reducing America’s carbon footprint. Economists estimate a national cap on carbon emissions could increase electricity prices by $0.17 per kWh by 2030! Such an increase in energy costs would undermine the industry’s competitiveness with countries like China and India that do not have a similar cap on greenhouse gas emissions.  While the bill contains a provision to assist energy-intensive and trade-exposed industries transition to a low-carbon economy, it is AFS’s understanding that foundries would not qualify to receive the rebate. 

Outlook: Other House Committees, such as the Ways and Means Committee and the Agriculture Committee, are expected to work on climate-related provisions after the Memorial Day recess.  An aide for Speaker Nancy Pelosi (D-CA) has said that a “consensus package” will be created and be brought to the floor for a vote.  Speaker Pelosi has promised that the vote will be sometime this year.  The fate of climate change legislation in the Senate is much less clear, although Senate Environment and Public Works Chairman Barbara Boxer (D-CA) has been holding weekly strategy sessions with members of her Committee and other key senators. 

Action: Metalcasting Industry Government Affairs members sent opposition letters to Members of Congress who sit on the House Energy & Commerce Committee prior to the panel’s vote on the bill.  In addition, they met with their legislators in May at the Government Affairs Conference, expressing their concerns about the impact of higher energy prices on our industry.

Download Sample Opposition Letter to ACES

For more information, contact Alicia Oman, Metalcasting Industry Government Affairs Washington Office, at aoman@afsinc.org or 202/842-4864.