Thank you, Madame Chairman, for convening this hearing on the United States Climate Action Partnership. This is not the first time that industry has worked alongside environmentalists. Indeed, this is not even the first time that some in industry have thrown their support toward carbon caps.
Indeed, we need only think back to Clinton administration meetings with Enron’s Ken Lay over Kyoto treaty negotiations. This Washington Post article "Enron Also Courted Democrats: Chairman Pushed Firm’s Agenda With Clinton White House" chronicled how, "[i]n a White House meeting in 1997...Lay urged President Clinton and Vice President Gore to back a market-based approach to the problem of global warming - a strategy that a later Enron memo makes clear would be ‘good for Enron stock.’"
In describing how an "international agreement to combat global warming also dovetailed with Enron’s business plan, Enron officials envisioned the company at the center of a new trading system...[that would] curtail the use of...coal-fired power plants that emitted...carbon dioxide, while encouraging new investments in gas-fired plants and pipelines – precisely Enron’s line of business."
This text bubble details why Enron officials later expressed elation at the binding carbon caps in the Kyoto protocol. According to the Washington Post:
an internal [Enron] memo said the Kyoto agreement, if implemented, would "do more to promote Enron’s business than almost any other regulatory initiative outside of restructuring the energy and natural gas industries in Europe and the United States."
This example shows how companies of all stripes are willing to work for environmental goals if it fits their business model and pads their bottom line. That is why I am not worried as much about what certain companies think about carbon caps, but how vulnerable poor and middle-class communities, especially in my Midwestern coal-dependent State, are firmly in the cross-hairs of carbon cap plans.
Big Oil will still make their money under any scenario. They pass their costs straight on to American families and workers. Just look at last year’s run-up in gas prices. Even though their raw material, oil, increased in price to record levels, Big Oil still made profits selling gasoline. Some on this Committee would describe these Big Oil profits as ill-gotten windfall profits. Indeed, one member of the U.S.CAP partnership testifying here today made over $22 billion in profits last year.
And who picked up the tab to fill these corporate coffers? You, me and all of us as consumers. That is what happens when the cost rises of a basic necessity we cannot do without. We must pay. We paid when gasoline prices went up. We will pay when natural gas prices go up further. Although Enron did not survive to see the day, the future is clear with carbon caps: less coal, more natural gas demand, and higher profits from higher prices.
That will mean higher prices for heating our homes in the Winter, higher prices for air conditioning our homes in the Summer, and higher costs for blue collar manufacturing workers supporting their middle-class families.
Are the companies here today to be blamed? No, they are doing what they are supposed do: provide a return to shareholders by investing in new technologies and businesses where they will have a competitive advantage.
But we cannot mistake what is going on here. Some companies will do just fine in a world where energy costs more. But that success will come at the pain of the poor, the disadvantaged, the struggling middle-class workers who can least afford higher carbon cap prices.