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AISI Reacts to Passage of Climate Bill, Urges Modifications
06/30/2009 - AISI expresses its disappointment over the House passage of the American Clean Energy and Security Act of 2009, which it says will put the steel industry at a distinct disadvantage.
The American Iron and Steel Institute (AISI) expressed its disappointment over the House passage of the American Clean Energy and Security Act of 2009.
“We believe this bill has moved at a rushed pace that has not allowed for full debate of provisions that are critical to the steel industry, which was clearly underscored by the fact that the bill passed in the House by only seven votes,” said AISI President and CEO Thomas J. Gibson. “The bill, as passed, will need important modifications as it moves through the Senate.
“We appreciate the hard work of Congressmen Mike Doyle (D-PA) and Jay Inslee (D-WA) and we look forward to continuing our work with them as this legislation moves through the process,” said Gibson. “However, we can say – with certainty – that if this bill is enacted as it presently stands, U.S. steelmakers and our workers will be at a significant competitive disadvantage in the global marketplace. Several modifications must be made to achieve the bill’s stated purpose of avoiding job loss and emission migration to overseas markets.”
According to Gibson, one part of the bill that needs to be modified relates to recognizing the unique challenges of energy-intensive industries.
“With this bill, all forms of energy – coal, natural gas, biomass and electricity – have the potential to suffer a dramatic cost increase due to fuel switching, deployment of waste-gas capture/regeneration technology, carbon capture and sequestration technology, and wind, solar and other clean energy technologies. Energy-intensive industries should be rebated allowances to recover consequential cost increases resulting from this legislation, and not just emissions costs,” he said.
“Currently, the bill does not contain a meaningful border adjustment mechanism and has a significant lag before any assessment of comparable action by our trading partners is made,” Gibson said. He explained that the legislation as written would be inadequate to ensure that new costs placed on steel and other trade-sensitive manufacturers would also be applied imports.
“As currently written, the border mechanism would be wholly ineffective and would simply lead to the substitution of imported products (from countries with no or far lesser environmental standards) for domestic production – undermining both the environmental objective of the bill and the competitiveness of U.S. products.”
Gibson said that another area of concern in the House bill is the arbitrary formula used to lower the emissions allowance schedule to energy-intensive manufacturers below 15% beginning in 2015. He explained that this approach deprives energy-intensive manufacturers of nearly one billion allowances over the life of the program, commenting that energy-intensive manufacturers should receive the same emissions allowance schedule that is applied to all other recipients of emission allowances.
AISI serves as the voice of the North American steel industry in the public policy arena and advances the case for steel in the marketplace as the material of choice. AISI plays a lead role in the development and application of new steels and steelmaking technology. The Institute comprises 24 member companies, including integrated and electric furnace steelmakers, and 138 associate and affiliate members who are suppliers to or customers of the steel industry.
