Link to Inhofe EPW Press Blog
An important reason cap-and-trade supporters repeatedly fail to "put a price on carbon" is that they choose to see reality as they want to see it, rather than seeing it as it actually is. One of the stubborn realities confronting them is the Midwest. No matter how cap-and-trade legislation is structured, altered, or amended, the result is always the same: the Midwest shoulders a larger share of the higher electricity costs, lost jobs, and slower economic growth that cap-and-trade will inevitably cause. Why?
A closer look at the energy profiles of Midwestern states provides the answer. We turned to the Energy Information Administration's (EIA) state energy profiles for guidance. Today we look at the great state of Ohio. Thanks to EIA,
it's brutally clear why Ohio opposes cap-and-trade: it gets most of its (low-cost, reliable) energy from fossil fuels. That includes an energy-intensive manufacturing sector that employs tens of thousands of people state-wide. In other words, Ohio gets hammered by a policy, the express purpose of which is to tax fossil fuels out of existence.
"With a large population and a heavily industrial economy," EIA writes, "Ohio is among the top States in total energy consumption." The state's industrial sector "dominates energy consumption, largely due to several energy-intensive industries, including chemicals, glass, metal casting, and steel." Moreover, "Coal typically fuels close to nine-tenths of net electricity generation in Ohio." Of course, under cap-and-trade, coal is targeted for destruction, which means Ohio's energy consumers will suffer and manufacturers will do business elsewhere.
Oil also contributes to the state's energy mix: "Ohio's total petroleum demand is high, and Ohioans consume large amounts of motor gasoline and distillate fuel." EIA points out that Ohio has the second-highest refining capacity in the Midwest, and contains "a large network of product pipelines that connect its refineries to markets in Ohio and adjacent States."
But that's not all. As EIA explains, Ohio potentially sits on big reserves of coalbed methane, a fossil fuel that, even with its lower carbon profile relative to coal, also would be pinched by cap-and-trade. "Recent assessments also indicate," EIA notes, "that there may be significant potential for future coalbed methane production in the State." Ohio natural gas consumption is high, "led by the residential and industrial sectors." EIA estimates that "nearly seven-tenths of Ohio households use natural gas as their primary source of energy for home heating."
These are hard facts, the reality of which can't be changed or ameliorated by simply redistributing emission "allowances" or promising "green jobs." For example,
in an economic analysis of the Waxman-Markey cap-and-trade bill, the National Association of Manufacturers (NAM) found that by 2030, Ohio would lose up to 108,600 jobs. "The primary cause of job losses," NAM wrote, "would be lower industrial output due to higher energy prices, the high cost of complying with required emissions cuts, and greater competition from overseas manufacturers with lower energy costs."
What's more, by 2030, Ohioans would see disposable household income reduced by $873 to $1,419, while they would pay between 20 and 26 percent more for gasoline. Also, electricity prices increase by up to 60 percent and natural gas by up to 79 percent. As for the state's manufacturing sector: output declines 6 percent by 2030, while output from "energy intensive sectors" drops between 10.7 percent and 11.7 percent.
In sum, NAM concludes, "High energy prices, fewer jobs, and loss of industrial output are estimated to reduce Ohio's gross state product (GSP) by between $1.3 and $2.3 billion per year by 2020 and $13.9 and $18.9 billion by 2030."
These impacts explain why the Ohio Senate last year
approved a resolution denouncing cap-and-trade. The resolution states that President Obama's cap-and-trade legislation would "disproportionately impact states in the middle part of the United States such as Ohio that are more reliant on coal," and that it would cause the state's manufacturers "to relocate to countries" such as China and India that will never pass mandatory carbon measures on par with Kerry-Lieberman or Waxman-Markey. This is reality which Ohio recognizes; it's a wonder whether cap-and-traders will ever accept it.
