Lamar Alexander Backs Kyoto-Style Carbon Caps

Sen. Lamar Alexander (R-Tenn.) enraged Senate conservatives last week by supporting environmental legislation that will devastate the nation’s coal industry and dramatically increase electricity prices.

In a break with most of his Republican colleagues, Alexander is backing the Clean Air Planning Act (S. 843), sponsored by Sen. Tom Carper (D-Del.), and cosponsored by liberal GOP Sen. Lincoln Chafee (R.I.). The bill includes a Kyoto-style cap on carbon dioxide emissions, and highly unrealistic reductions in mercury emissions-provisions that could shut down some coal-fired electric utilities, especially in the Midwest. According to Senate sources, Alexander snubbed President Bush (whom he ran against in 2000) by making his announcement without informing the White House.

Supporting Carper-Chafee puts Alexander in opposition to Bush’s top environmental initiative, the Clear Skies Act, announced during the State of the Union Address. Clear Skies, which caps only emissions of mercury, sulfur dioxide, and nitrogen oxides, would institute a market-based emissions trading system, allowing companies to plan for reductions over time, keeping costs down. Environmental groups vigorously oppose it, while it enjoys fairly broad support from the energy industry.

Industry sources believe Alexander’s decision could be politically damaging to him because over 60% of the electricity in Tennessee is generated from coal. “Does he know what the Carper bill will do to his state?” asked one industry source. “Coal just won’t be viable under Carper, which means most utilities will switch to natural gas. But where do we get it? Maybe Lamar forgot that we are in the midst of a natural gas crisis in this country.”

During a July 10 Senate Energy and Natural Resources Committee hearing, Alexander seemed quite aware of how skyrocketing natural gas prices are destroying jobs in Tennessee. “It seems at a time when our greatest challenge for our country, longer term,” he said, “is how we keep our manufacturing jobs from moving overseas, and we know that a big part of that is to try to keep unexpected costs low for those manufacturers so they won’t move to Mexico or China or somewhere, these energy policies that we fail to adopt here are having a direct impact on everyday jobs.”

The Carper bill amounts to a massive transfer of wealth to the Northeast. Under it, emissions allowances (or, the right of a utility to emit a ton of a specified pollutant) would be distributed to nuclear and natural gas generators, which have few if any emissions. As a result, coal-fired utilities, which already face highly burdensome compliance costs, would be forced to buy these allowances predominantly from generators in Connecticut, Massachusetts, New Jersey, New Hampshire, New York, and Rhode Island, where electricity is fueled mostly by natural gas and nuclear power.

“These six states,” found a study by Generators for Clean Air (a group of electrical utilities), “would receive a financial windfall of approximately $719 million per year in excess allowances, whereas three states (Ohio, Indiana, and Kentucky) would be penalized $775 million annually because of allowance shortfalls.”

“Lamar’s writing a check to Carper and Chafee,” said an energy industry source.

The Carper bill also implicitly concedes a frequent liberal charge: that emissions from power plants are causing global warming, which is why it regulates carbon dioxide, a greenhouse gas. There is, however, no compelling scientific evidence to support that view.

“Alexander has essentially bought into the green myth that soccer moms and their SUVs and the coal industry are causing catastrophic heating of the Earth,” said one Senate source. “That’s just completely bogus. Lamar’s support for Carper is fulfilling the greens’ dream of imposing energy suppression on the American people.”