Hanging Numbers on Climate Change Legislation

When creating policy, or horestrading for votes, it is critically impotant to "hang some numbers" on whatever bill you are selling or fighting. How many jobs will it create/kill? How much revenue will it generate? How much will taxes have to be raised?

All of this is critically important to legisation's passage or failure, but none of it really means anything because everybody has their own set of numbers, depending on whether they are for or against the issue.

The latest set of "numbers" to make headlines comes from the American Petroleum Insitute, which has a predictably negative point of view when it comes to Waxman Markey. Today, API is releasing a report that calculates "the cost" of implementing the Waxman Markey bill.

Here are some expected highlights:

- By 2030, U.S. refining production could drop 17%

- The U.S. could end up relying on other countries for 19.4% of its refined fuel -- nearly twice the amount it imports today.

- The bill requires refiners to have permits for nearly half of U.S. carbon-dioxide emissions, though the industry would receive only about 2.25% of the total emissions allowances. The electricity-generating sector, also a major source of greenhouse gases, obtained a larger share of the allowances.

- Average U.S. refinery output would drop to 12 million barrels a day in 2030 from about 14.5 million barrels a day currently, if nuclear power, technology to reduce carbon emissions and the use of international offsets fail to become widespread. Refinery utilization rates could drop to 63.4%, from about 83% today.

- Without the restrictions of a Waxman-Markey bill, U.S. production rates would grow to an average 16.4 million barrels a day in 2030, according to the study.

These numbers could be accurate, or they could be pie in the sky lobbying fluff. One thing is for sure, though, they won't be alone. Expect them to be rebutted, fast.

Oil Industry Details Costs of Climate Bill [Wall Street Journal]