Contact: Matt Dempsey 202-224-9797



Madame Chairman, I commend you for having this hearing and I welcome all of the witnesses from the various businesses before this Committee today.  I’d especially like to welcome Tim Healy from Lange Stegmann fertilizer company and Jack Armstrong with BASF. 

The message I have is very simple and I hope it begins to make sense to my colleagues on the other side as we continue our global warming cap-and-trade debate this year. True innovation, job growth, and business opportunities should stem from the open and free market and not from creation of more taxes and government spending. Yet that is exactly the direction we will go if we pass cap-and-trade and establish a new, government-created market based on carbon, all at the taxpayers’ expense.


I am not opposed to new green jobs, or any kind of jobs that make sense in the global economic market.  In fact, my state of Oklahoma knows a thing or two about making wind power cost effective.  Oklahoma Gas and Electric’s wind energy program has recently been ranked number one in the country by the Department of Energy’s National Renewable Energy Laboratory for the price premium it charges for new customer-driven renewable power.


What I am opposed to is increasing taxes. And cap-and-trade is, plain and simple, a tax. It’s an indirect, hidden, sneaky tax, but it’s a tax. And it’s a tax on the American people and businesses that will raise energy prices as well as all goods and services that are produced using energy.  It’s a tax that will fall more heavily on poorer people because poorer people spend a higher percentage of their incomes on energy than do wealthier people. And finally it’s a tax that, for every business opportunity it will create, it will destroy others, especially in energy-intensive industries, which are concentrated in the states that use coal for electricity.  The result is a net loss for jobs and the economy.


I want to commend Senator Bond for his recent report on the cost of green jobs.  The report very effectively highlights how government-created green jobs can kill existing jobs.   


In the meantime, I also point you to a new study out of Spain, which I understand the President has used in many of his speeches as an example of the direction we are heading.  Spain has real world examples over the past decade of implementing these types of policies. It found that for every 4 green jobs created, 9 other jobs were lost. Other findings from this study show that Spain spent 571,138 Euros on average to create each green job.  Spanish energy regulators estimate that the rate paid by end consumers for electricity must be raised by 31% to repay this debt.


Now as the House moves towards marking up their bill, I am hopeful we will have more hearings to discuss these types of substantive issues and how they factor into the debate on cap-and-trade.  All sides of the issue should be heard.


As we have learned though mandates in the past, with the most recent example being the RFS and biofuels, there will be many unintended consequences. I am hopeful that as we move forward we provide real market-based incentives, rather than mandates, caps, and government subsidies, for new job creation.


While I understand that today’s hearing is mostly focused on small businesses and startups, I want to comment on this issue of industry support for cap-and-trade policies. My colleagues on the other side frequently rail against “big polluters” for obstructing passage of cap-and-trade legislation.  Yet it is not ironic that many of these selfsame “polluters” are supporting and lobbying for passage of cap-and-trade. 


While House Democratic leaders are attempting to mark up their bill this week, they are picking winners and losers by distributing billions of dollars in pollution “allowances” to favored industries.  Not surprisingly, many of these companies are in turn supporting the Waxman-Markey bill. 


As former Congressional Budget Office Director Peter Orszag said, “If you didn't auction the permits it would represent the largest corporate welfare program that has ever been enacted in the history of the United States.  All of the evidence suggests that what would occur is that corporate profits would increase by approximately the value of the permits.”  It didn’t stop there. CBO also found that “giving away allowances could yield windfall profits for the producers that received them by effectively transferring income from consumers to firms' owners and shareholders.”


Now I am all for companies seeking to generate a profit in the open market and making a buck, but when the burden lands on the backs of my constituents in an artificially created market that is not economically sustainable, I must object. 


Once again I welcome all the businesses here before the Committee today and I look forward to hearing their testimony.


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