Washington (Platts)--16Jul2009

Without a strong market signal in the form of CO2 emission caps, US
companies working on no or low-emission energy technologies will lose their
competitive edge to companies in China, India and elsewhere, industry
officials told the Senate Environment and Public Works Committee on Thursday.

"China will sweep us out" if the US waits a decade to enact a cap on
carbon, John Doerr, a lawyer with Kleiner Perkins Caufield & Byers, a venture
capital firm that invests in clean power companies.

John Krenicki, president, CEO and vice chairman of GE Infrastructure,
warned that "massive new investments in manufacturing will not be made in the
US today based on the hope of a strong carbon price signal 10 years from now."

While the US "struggles" to determine the future of clean energy,
Krenicki said, "other countries around the world are setting aggressive
near-term and long-term standards and incentives to create large domestic
markets for renewable energy."

Doerr agreed, saying that while the US led the world in the Internet
technology revolution, it is lagging behind in the energy technology
revolution. Meanwhile, "China understands that controlling its energy future
is fundamental."

Doerr blamed the technology lag on current US policies, which he said are
"the principal obstacle to creating even more new jobs in the next great
industry, clean technology" because "we have no long term market signal that
tells companies and consumers we value lower carbon."

Krenicki said GE is building five nuclear plants in Asia, but none in the
US.

Committee Chairman Barbara Boxer, a California Democrat, asked whether
China is leading the clean energy race because it has refused to agree to caps
on its carbon emissions.

But Julian Wong, senior policy specialist with Center for American
Progress Action Fund, which describes itself as a progressive think tank, said
"China has been made a scapegoat" for US inaction on climate change, while the
country continues to invest heavily in renewable energy, energy efficiency,
nuclear power and clean coal technology.

Wong said the debate over investments in clean energy should be separated
from the political rhetoric on climate change. "Let us look at the facts on
the ground. It is China, and much less so the United States, that is now
laying the foundation for a new clean-energy economy," Wong said, noting that
China has set an aggressive target of achieving 15% of its electricity
production from renewable resources.

But Senator James Inhofe, an Oklahoma Republican, was quick to point out
that China is taking all these steps without any carbon caps, underscoring his
argument that the US does not need to impose such caps and risk the loss of
jobs.

Inhofe's arguments were support by a National Black Chamber of Commerce
study that found 2.3 million jobs would be lost if a bill similar to that
passed in late June by the House of Representatives becomes law.

NBCC President Harry Alford told the panel that enactment of the House
measure would not be a "smart move," because it would disproportionately hurt
employment among African American and Hispanic workers and would lead to a
mass migration of workers from Illinois, Ohio and other industrial states to
states such as Idaho and Montana, which are considered prime areas for
renewable energy development.

Boxer countered Alford's study with a Pew Center assessment that argued
the House bill would lead to a net gain in US employment levels.

--Amena Saiyid, amena_saiyid@platts.com