With prices at the pump in Oklahoma and across the country approaching $4 a gallon, it may be hard to believe, but the United States Senate has taken up legislation today (S.3036) that will have the effect of further driving up gas prices. This global warming cap-and-trade legislation, if it were to become law, would impose severe economic constraints on Oklahoma families and workers for no environmental gain.

As the Wall Street Journal noted in a May 27, 2008, editorial, “Warner-Lieberman would impose the most extensive government reorganization of the American economy since the 1930s.” Because of the disastrous consequences of this bill on Oklahoma and the nation, I have pledged to lead the fight against this legislation on the Senate floor.

The Boxer Climate Tax Bill would increase household costs for every family of 4 in Oklahoma by $3,298. Because of the rising cost of home heating and electricity, the average increase per U.S. household will be $1,740 per year by 2020, according to Charles River Associates. Oklahoma will spend almost twice as much as the average U.S. household at $3,298 per year. Further, this bill would add to the already skyrocketing costs at the pump, with various analyzes showing an increase somewhere between $0.41and $1.01 per gallon by 2030.

The Congressional Budget Office (CBO) says this legislation would effectively raise taxes on Americans by over a trillion dollars just over the next 10 years. This is because the bill requires companies to submit allowances in order to continue operating their businesses. Because the bill creates such an enormous number of allowances–$6.7 billion in 2012 alone–and because these allowances are required in order for firms to stay in business, the market for these allowances will be very liquid. The most direct form of taxation in this bill is the billions of dollars worth of allocations auctioned by the government each year. Here you have companies making direct payments to the government for the privilege of continuing to do business … the clearest example of a tax.

One thing is certain: the full brunt of the new taxes in this bill will be born by American consumers. As CBO says, “most of that cost would ultimately be passed on to consumers in the form of higher prices for energy and energy-intensive goods and services.”

This legislation would also irreparably harm domestic crude oil and natural gas production.

Today, the operating cost for a natural gas well averages a hefty $25,000 per year.

Lieberman-Warner would increase these operating costs by $12,500 to a total of $37,500 per well per year by 2012. By 2030 those operating costs would increase by $25,600 to a total of $50,600 per well per year. Additionally, a study by Wood McKenzie estimates that by 2012, Lieberman Warner could put at risk as much as 32 percent of our nation’s expected natural gas supply, or nearly a third in just four years. This would be at a time when the demand for natural gas would be growing, not shrinking.

Furthermore, this is the largest pork bill ever considered by Congress. No matter how many revisions this bill undergoes, it remains a massive redistribution of wealth, the largest new tax and spend program in our Nation’s history. The bill will redistribute over $5.6 trillion from American consumers to pet congressional projects. Despite paying for the trillions of dollars mandated by this cap-and-trade scheme, American families and workers will only receive back $800 billion in consumer tax relief — $7 paid for every $1 returned.

Adding insult to injury, all of the costs imposed by Lieberman-Warner are meaningless without global action. According to EPA, without international participation, global concentrations of greenhouse gases will continue to increase, even if America were to nearly eliminate its emissions. China and India will contribute more than 40% of the increase in global energy demand by 2030 based on current trends and around 60% of the global emissions.

I have long advocated a technological approach that brings in the developing nations such as China and India. Oklahoma demonstrates that tomorrow’s energy mix should be diverse. As a nation, we should commit to more natural gas, wind and geothermal energy, but we must also continue to include oil, coal, and nuclear energy—the world’s largest source of emission-free energy. This approach serves multiple purposes – it will reduce air pollution, expand our energy supply, increase trade, and, along with these other goals, reduce greenhouse gases. Developing and expanding domestic energy will translate into energy security and ensure stable sources of supply and well-paying jobs for Americans.

I am confident that when the American people learn the facts about the enormous economic burdens of this bill, they will contact their Senators and ask them to oppose the bill. It seems unlikely that as American families face harsh economic times any Senator would dare stand on the Senate Floor and vote in favor of significantly increasing the price of gas at the pump and legislation that would cost millions of American jobs.

Read More at www.epw.senate.gov/lieberman-warnerbillexposed.

This entry was posted on Wednesday, June 4th, 2008 at 5:08 pm and is filed under Politics .