Washington (Platts)--14Mar2008

The US Environmental Protection Agency said Friday that a greenhouse gas
cap-and-trade bill pending in the US Senate could cost up to 4% of the
country's gross national product, increase power prices by 44% and raise CO2
emissions prices up to $83/ton, all by 2030, if carbon capture technology is
widely available.

EPA also said its detailed modeling determined that the bill (S. 2191),
would reduce GHG emissions in the US by about 40% in 2030 and by up to 56% in
2050. Cumulative emissions would be reduced by about 35% between 2010 and
2050, compared with a business-as-usual-scenario, EPA said.

The agency said it would conduct another analysis of the bill that
includes emission reduction provisions--such the 35 miles per gallon fuel
standard for motor vehicles--from the Energy Independence and Security Act
enacted late last year. That analysis will be available in late May or early
June, EPA said.

Senators Joe Lieberman, a Connecticut Independent, and John Warner, a
Virginia Republican, authored the bill, which would cap about 82% of total US
GHG emissions. Senate debate on the bill is scheduled for this summer.

The Lieberman-Warner bill would impose a cap on GHG emissions from the
electric power, natural gas processing, transportation fuels and industrial
sectors and set up an emissions allowance trading system to aid emitters'
compliance. The bill would initiate a GHG cap of 4% below 2005 levels in 2012
that would increase incrementally to 71% below 2005 levels by 2050.

The two senators, who had asked EPA to analyze their bill, said they
would study the analysis and see where improvements could be made, but both
said EPA findings showed that GHG can be capped without ruining the US economy
as opponents to GHG restrictions argue.

"EPA's detailed analysis indicates that the US can curb global warming
without sacrificing economic prosperity," Lieberman said. "We will examine the
results closely for improvements that they might suggest for the bill," he
added.

"I am satisfied that EPA's analysis demonstrates what we have long known:
You can control greenhouse gas emissions in a manner that leaves the economy
whole and is not burdensome on consumers," Warner said.

--Cathy Cash, cathy_cash@platts.com