Washington (Platts)--5May2009

Republican members of the US House of Representatives united with several
industry groups on Tuesday to oppose an energy and climate change bill House
Democrats are hoping to move through the Energy and Commerce Committee by
month's end. The Republicans and industry groups said the Democrats' measure
would do little more than raise energy costs for Americans consumers and
businesses and harm the nation's economy.

"There is no doubt that the Democrats' misguided bill will kill jobs,
raise taxes and lead to more government intrusion. This is an irresponsible
proposal that will do more harm than good."

"The reality is the [carbon] cap-and-tax legislation offered by the
Democrats amounts to an economic declaration of war on the Midwest by liberals
on Capitol Hill," said Representative Mike Pence of Indiana at a summit
sponsored by the American Energy Solutions Group, a group of 29 Republican
House members.

The Energy and Commerce Committee's top Republican, Joe Barton of Texas,
and House Minority Leader John Boehner of Ohio, are also members of AESG,
which represents many members who oppose carbon cap-and-trade and some who
have backed a carbon tax as an alternative to curb greenhouse gas emissions.

The meeting came as Democrats on the Energy and Commerce Committee were
meeting with President Barack Obama to discuss a draft climate change and
energy bill offered by committee Chairman Henry Waxman, Democrat-California,
and Energy and Environment Subcommittee Chairman Edward Markey,
Democrat-Massachusetts.

Waxman and Markey are in talks with moderate Democrats in an effort to
address their concerns that draft measure's CO2 cap-and-trade and renewable
energy provisions would significantly raise energy costs for their
constituents.

Pence said AESG plans to hold three more summits over the next month
in Pennsylvania, Indiana and California on what other energy and
climate-related options Republicans should propose. He also said the AESG will
"soon" release "a plan that is more environmentally friendly than the
Democratic plan."

Although not an AESG member, Republican Whip Eric Cantor of Virginia made
appeared at the summit to state his opposition to cap-and-trade for the same
economic reasons as the group's members, noting the US will head into "a
permanent recession" if a cap-and-trade program is enacted.

Also during the summit, a range of significant downsides to cap-and-trade
were laid out by various stakeholders, particularly large energy consumer
groups.

National Association of Manufacturers President John Engler said his
group has projected the cap-and-trade design under last session's
Lieberman-Warner bill (S. 2191) would cause by 2030 close to a $700 billion
loss in GDP, a 77-145% rise in gasoline prices, and a 142-185% rise in
industrial energy rates. He said he expected an analysis of the Waxman bill to
be done in "just a few days."

Industrial Energy Consumers of America President Paul Cicio urged
Congress to "wake up to reality" with America losing its competitive edge
against developing countries such as China and India. "This is not the time to
experiment with cap-and-trade," he said.

Consumer Energy Alliance Vice President Michael Whatley backed
complimentary carbon-lowering policies such as new nuclear, natural gas
development, wind energy and transmission over cap-and-trade. "[W]e urge
Congress to be realistic in its efforts to force such a transition. We have
only to look at the collapse of the American economy last summer [when
gasoline prices rose] to see what will happen if you don't," he said.

--Christine Cordner, christine_cordner@platts.com