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Thursday, June 25, 2009

Oil, Gas and Waxman-Markey Legislation

The U.S. House of Representatives is scheduled to consider the Waxman-Markey energy/climate legislation – or the American Clean Energy and Security Act of 2009 – on Friday, June 26. Among the legislation’s many measures that would raise energy costs are a massive emissions cap-and-trade regulatory scheme, and renewable mandates on electricity generation.

The oil and gas industry correctly warns Congress about the ill effects of Waxman-Markey. In a June 23 letter to Congress, Jack Gerard, president and CEO for the American Petroleum Institute, makes three important points:

• “As independent analysis suggests, this legislation will drive up consumer prices for gasoline and other fuels. It also will create huge disincentives for the production of America’s abundant natural gas resources and force jobs and productive capacity overseas.”

• “An analysis of a Congressional Budget Office report indicates that it could add as much as 77 cents to the price of a gallon of gasoline over the next decade. And according to the Heritage Foundation, this legislation could cause gas prices to jump 74% by 2035. That means, at today’s prices, gasoline would be well over $4 per gallon.”

• “At a time that we can least afford it, these provisions and others have the effect of driving up energy costs, creating a competitive disadvantage for American business, and imperiling thousands, if not millions, of jobs. The oil and gas industry, alone directly and indirectly supports 6 million American jobs. These jobs and their economic productivity should not be jeopardized.”

All small businesses and their employees would suffer due to higher energy costs if Waxman-Markey becomes law, and the many small firms in the oil and gas industry would have their very existence placed in peril.

Waxman-Markey is bad economics and bad legislation.

Raymond J. Keating
Chief Economist
Small Business & Entrepreneurship Council

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