TEXT OF STORY
Kai Ryssdal: Yes, it’s the last week of August and most of Washington is on holiday. But the lobbying industry is still hard at work. Today the oil industry’s campaign against the climate legislation that’s working its way through Congress heated up a bit. The industry’s chief lobbying group — that would be the American Petroleum Institute — came out with a study of the climate bill’s cost to U.S. refiners. And perhaps, eventually, to consumers too.
From the Marketplace Sustainability Desk, Sam Eaton reports.
SAM EATON: The study predicts that if federal climate legislation becomes law, increased production costs would force U.S. refiners to slash output nearly 20 percent. And the resulting shortfall would cause imports of gas and diesel to double, jeopardizing U.S. energy security.
John Felmy is the American Petroleum Institute’s chief economist.
JOHN FELMY: Clearly these findings show that you could characterize this action as being all pain and no gain.
But the golden rule of economic models is that their results are only as good as the assumptions that go into them. And in this case, the study’s authors assume little to no growth in alternative technologies like carbon sequestration and nuclear energy.
They also base their findings on the assumption that the U.S. would be the only country to pass restrictions on greenhouse gas emissions, making it cheaper to refine gasoline overseas.
DANIEL WEISS: This is the ultimate example of garbage in, garbage out.
Daniel Weiss is with the liberal think tank, Center for American Progress. He says industry-backed economic studies with dire predictions are common practice among businesses opposed to increased regulation.
WEISS: By making an assumption that is extremely unlikely to occur gives them the output that they want, which is that it will be terrible for their industry.
The American Petroleum Institute’s study did include a separate scenario not mentioned in its press release. That one used Department of Energy data that assumed wider adoption of low carbon technologies. The result was a slight rise in U.S. refining production, despite major limits on greenhouse gas emissions.
In Los Angeles, I’m Sam Eaton for Marketplace.
We’re here to help you navigate this changed world and economy.
Our mission at Marketplace is to raise the economic intelligence of the country. It’s a tough task, but it’s never been more important.
In the past year, we’ve seen record unemployment, stimulus bills, and reddit users influencing the stock market. Marketplace helps you understand it all, will fact-based, approachable, and unbiased reporting.
Generous support from listeners and readers is what powers our nonprofit news—and your donation today will help provide this essential service. For just $5/month, you can sustain independent journalism that keeps you and thousands of others informed.