Washington (Platts)--15May2008

US Senate Republicans Thursday sought to preempt upcoming floor debate on
the leading climate bill as the top Republican on the Environment and Public
Works committee released a white paper saying the measure was too costly.

The senator, Oklahoma Republican James Inhofe, used a series of recent
government and private analyses pointing to heavy economic dislocation and a
severe reduction in projected economic growth if lawmakers approve the
carbon-cap bill as-is.

"This legislation will cripple the national economy while destroying jobs
and raising electricity, heating and gas costs to every single family in the
country," Inhofe's paper said. The senator added that the poor would be hurt
the most.

Inhofe's position contrasts with Arizona Senator John McCain, the
presumptive Republican presidential nominee, who on Monday called for a
mandatory cap on greenhouse gas emissions, something that President Bush and
other Republican leaders in Congress such as Inhofe oppose.

The bill (S. 2191), which is the work of Connecticut Independent Joseph
Lieberman and Virginia Republican John Warner, would establish an emissions
trading system to reduce GHG by about 66% from 2005 levels by 2050.

Inhofe is known as one of the most vocal manmade climate change skeptics
in Congress. He will lead Republicans on the chamber floor when the bill
debate begins June 2. He also created an extension of the committee web
site to criticize the bill.

The white paper builds on one of Inhofe's most frequent arguments -- that
the bill would do little to stop emissions from rising in rapidly
industrializing countries like China. Inhofe argued that millions of jobs lost
in the US because of rising energy costs would be shipped overseas to
countries with no emissions cap.

The Energy Information Administration recently predicted that economic
growth would be 0.2% to 0.6% less than anticipated levels by 2030, a
cumulative $444 billion to $1.3 trillion of lost growth potential. Opponents
fo the bill point to studies from the EIA and others indicating that the
system would hit the coal industry severely while boosting more expensive
nuclear power, natural gas and renewable resources.

Inhofe questioned the feasibility of building new nuclear power plants as
well as coal-fired power plants with carbon capture and storage, something he
believes is further away from commercialization than many people hope.

Instead, the US should have a voluntary policy based on technological
development with tax incentives, Inhofe said. "That path involves investment
incentives to energy efficiency, well-funded research and development and an
open mind about all sources of electric generation including nuclear and the
further exploration of natural gas," the white paper said.

--Alexander Duncan, alexander_duncan@platts.com