US GHG trading legislation would mean higher energy prices: EIA

Washington (Platts)--5Sep2006

Requiring power plants and other industrial facilities to cut greenhouse
gases by 11% by 2030 under a proposed cap-and-trade program would mean
slightly higher US energy costs, according to a new report by Department of
Energy researchers.

DOE's quasi-independent Energy Information Administration issued analysis
Tuesday of a cap-and-trade program proposed by US House lawmakers under the
"Keep America Competitive Global Warming Act."

The legislation, authored by Representatives Tom Udall, Democrat-New
Mexico, and Thomas Petri, Republican-Michigan, would cut GHG emissions by 827
million mt of CO2 equivalent and 1.1 billion mt of CO2 equivalent by 2020 and
2030 respectively.

If the proposal were to become law, EIA believes "the average delivered
coal price" would be 46% above what it would otherwise be by 2030. Power
prices would rise 6%, natural gas prices would increase 5% and gasoline prices
would rise 3%, it added.

"In the electric power sector, projected changes in policy cases include
shifts in the types of new power plants added, with an increased reliance on
natural gas, renewable energy and nuclear power to supply electricity and less
reliance on coal and petroleum," the analysis said.

Companies selling allowances -- rights to emit CO2 -- under the
legislation would see revenues of $103.6 billion in 2030, according to EIA.

The expected loss in gross domestic product from the legislation would be
0.11% between 2009 and 2030, EIA said.

For more news, request a free trial to Platts Emissions Daily at
http://www.platts.com/infostore/product_info.php?cPath=23_33&products_id=62



 

Copyright © 2005 - Platts

Please visit:  www.platts.com

Their coverage of energy matters is extensive!!.