Reject Waxman-Markey

Jane Van Ryan
Posted June 23, 2009

This Friday, the U.S. House of Representatives is expected to take up the American Clean Energy and Security Act of 2009, or the Waxman-Markey bill. The American Petroleum Institute (API) strongly opposes the bill, and today sent a letter to every member of Congress explaining why this bill should be rejected by the House.

As studies by the Heritage Foundation and the National Black Chamber of Commerce show, this bill will cut jobs by more than two million a year and raise the price of gasoline by an estimated 77 cents a gallon over the next decade.

Recently, the Congressional Budget Office (CBO) produced a new analysis of the Waxman-Markey bill, estimating that the net cost per household will be only $175 a year. API economists have reviewed this analysis and have found that it is deeply flawed. It fails to address the reduction in Gross Domestic Product from the higher cost of carbon--an impact that could be in the hundreds of billions of dollars--and it counts the value of free allowances given to businesses as a benefit to average American households. Together these flaws have the effect of biasing the CBO study to provide a much lower estimated economic impact on households than can be realistically anticipated.

Apparently, the House leadership hopes to pass the Waxman-Markey bill before the July 4th recess, but we believe this bill is too important to be rushed by an arbitrary deadline. The House should slow down and get this legislation right.

The oil and natural gas industry does not dispute the bill's goal to protect the environment by reducing greenhouse gas emissions, but this bill falls short. We urge Congress to replace it with something far better.