Cap and trade concerns local co-ops

By Louisa Barber

Sidney Herald
Published on Tuesday, December 8, 2009 2:40 PM MST

As President Barack Obama makes his way to Denmark for the international conference on climate change, the spotlight will inevitably shift to national climate legislation, which has electric cooperatives biting their nails.

After legislative action took a back seat because of the health care crisis and a presidential push to economic recovery, the climate debate seems to be coming back in full swing.

Current cap and trade legislation is quite disturbing for local electric co-ops who are trying to fight it in many ways. Tom Barnett, general manager of Upper Missouri G & T, says a cap and trade is dangerous as it doesn’t allow the co-ops to know the price of the tax on producing electricity as it will be traded on the stock exchange.

“That is going to leave the price up to Wall Street investors, and that is very scary for us and for our customers,” Barnett said.

The mission of these co-ops is to offer low-cost, reliable electricity for the members they serve. The “trade” is what they say is the problem. If legislators incite a $20 tax on each ton of coal, for instance, Barnett said the price of electricity for residents in eastern Montana and western North Dakota could double. “If there’s going to be a carbon tax, we want a cap. We want to know how much it’s going to cost,” he said.

Electric co-ops say cap and trade has nothing in its legislation to reduce carbon, only increase the price of using carbon. They’re allowed only so many free carbon credits and would have to purchase any additional credits at the price set by the market.

This has put those opposed to cap and trade in a difficult spot, trying to meet demands. Aside from the fact coal, a big carbon emitter, is used to power 50 percent of American households, alternatives are at this point impractical. Take, for instance, wind. In eastern Montana and North Dakota, wind turbines are dubbed unreliable because wind is not constant, and they must be shut off when it’s too hot or too cold. “As far as reliability, they’re constantly breaking down – transmissions, gear boxes, the generators themselves, blades break,” Barnett said. The environmentalists, he added, don’t help either as they block the best places for wind in the name of preserving pristine land.

Hydro is used for roughly 20 percent of electricity but is not considered renewable, and then there are the environmentalists who want dams removed from rivers like the Yellowstone and the Missouri in order to protect the endangered pallid sturgeon.

The Obama administration has proposed cutting carbon emissions 17 percent by 2020, but Barnett and others say it can’t be done. “We haven’t found another better way to make electricity,” Barnett said, noting nuclear may help as it could come back to the scene. However, no one wants a plant in their backyard.

The recent push for Americans to use more “plug-in” vehicles, drives Barnett “crazy” because even though gas usage is reduced, electricity is still needed. “Where are you going to get the electricity?” Barnett said. “Can’t make it with coal. They won’t let us make it with nuclear. The environmentalists fight us over wind but it doesn’t work most of the time anyway. We’re left with gas. I thought that was what we’re trying not to use.”

Because of all of this, the price of electricity is bound to rise for Americans. That’s why in May, co-ops from around the nation traveled to Washington, D.C., to inform legislatures of their concerns. Barnett and several representatives from Montana spoke with Sen. Max Baucus, D-Mont., before a vote on a climate-change bill in the Senate Environment and Public Works Committee. The cap and trade bill allowed electricity producers to exceed carbon dioxide emission caps if they buy credits from nonpolluting industries that take actions to reduce emissions. Baucus voted against it – a pleasant surprise to Barnett.

It isn’t to say co-ops aren’t concerned about the environment. In fact, Barnett says, they are. They’ve taken steps to experiment with carbon sequestration and utilizing renewable sources where possible. They wonder where electricity will come from to power the university campuses to conduct research for producing better, reliable power.

“That’s why we’re scared as hell about this cap and trade,” Barnett said, “because there isn’t a better way than making electricity from coal that we’ve found that people can afford.”

reporter@sidneyherald.com

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Comments

The following are comments from the readers. In no way do they represent the view of the Sidney Herald.

FS wrote on Dec 12, 2009 8:44 AM:

" So true Ethel. Wake up people! "

The way it is wrote on Dec 10, 2009 5:06 PM:

" This global warming thing is the biggest scam in human history and Obama is doing his best to break our backs. "

Common Sense wrote on Dec 10, 2009 12:31 PM:

" The only thing that raising the cost of a commodity, product or service does is kill exports. In the US everything will most likely rise exponentially over time. It will however increase the cost of living gap between the US and other countries. If your energy cost increases so will the manufacturing costs and again we will be back to importing from China, Mexico, India and so on. Also it helps the rich to leverage their US assets against the rest of the world. If something such as energy doubles eventually wages, for example, will increase to keep up with the cost of living. We seen it with the price of gas and diesel over the past few years. But unlike gas and diesel this cap and trade bill only applies to the US and no one else. So see you later to more of the manufacturing sector. If I own a factory that will be hit hard by the cap and trade bill I will probably investigate what shipping the product from a new factory with cheaper labor and no carbon tax in South American would be compared to the tax I will have to pay to keep it in the US. "

Taylor wrote on Dec 10, 2009 1:32 AM:

" Not only are the electrical rates going to explode the cost of everything else is going to go up dramatically.

Case in point. Where are we going to get all the things that we depend upon? The cost of fuels for transportation will be so high that companies can not be profitable any more and will go out of business.

Are we self-sufficient? Can we produce the things that we individually need ourselves? Some can, others can not, depending where you live ie cities, or rural. "

Ethel Brost wrote on Dec 9, 2009 8:39 PM:

" Instead of biting nails alone, organize and rise up against this out-of-control congress and POTUS.

Organize and educate. Send reps to haunt the halls of congress.

Private citizens are working hard, but the ball belongs in the court of the industries affected, too. I'm tired of the meekness of our society.

A fraud is rapidly condemning us to a satanic pit of a new world order. "

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