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Con-way, Schneider come out against cap-and-trade effort

Oct. 14, 2009
Since its introduction in the House of Representatives earlier this year, the American Clean Energy and Security Act (ACES) or H.R. 2454, has been drawing both strong support and opposition from various interest groups

Since its introduction in the House of Representatives earlier this year, the American Clean Energy and Security Act (ACES) or H.R. 2454,( a.k.a the Waxman- Markey bill for its sponsors Henry Waxman, D-CA, and Ed Markey, D-MA,) has been drawing both strong support and opposition from various interest groups. And now some large, nationwide motor carrier shave signaled they oppose a key provision of the bill—largely on the grounds that as written, it is patently unfair to trucking to the point of threatening its future existence..

Within its five separate titles detailed over nearly 1,000 pages, the carbon cap and trade provision is arguably the most controversial. Now some truck fleets are joining the ranks of those against the cap and trade provision, including Con-Way and Schneider National.

According to C. Randal Mullett, v.p. government relations & public affairs for Con-Way, one of the biggest problems with the cap and trade program is that it is unfair to the trucking industry, asking trucking to pay a disproportionate percentage of the costs while delivering no benefits or concessions in exchange, such as those being offered to the coal-fired utilities. “If transportation does not get allowances like the other segments [of the economy], we have no choice but to oppose it,” Mullett said.

Those “allowances” are the carbon credits side of the equation, and the credits that would initially be allocated by the federal government to certain industries are among the most contentious aspects of this bill. According to Grist.beta, for example, the cap and trade process would start by dividing up a starter pool of carbon credits among these industries:

  • 15% would be given to energy-intensive industries like iron, steel, cement, and paper until 2025
  • 5% would be given to merchant coal generators (companies that sell coal-generated electricity to other companies at market prices) and to electricity producers obligated to supply electricity under long-term contracts; the giveaways would be phased out from 2026 through 2030
  • 2% would be given to oil refineries starting in 2014 and ending in 2026
  • 2% would be given to electric utilities between 2014 and 2017, and 5 percent thereafter, to cover the costs of deploying carbon capture and sequestration technology

Some of the permits would also be given to entities that are not covered under the bill, which would sell them and use the proceeds for specific purposes. That includes 3% for the automobile industry from 2012 and 2017, scaling back to 1% through 2025; the value would be used for the development of clean car technologies.

Perhaps the single biggest problem, though according to Mullett, is that cap and trade may change shipping patterns so much that it will cause companies to have to relocate shipping terminals, factories and other facilities and thus alter the entire nature of freight transportation. “Are we the next tobacco?” he asks. “With cap and trade, we risk losing forever the essential role of the trucking industry.”

Instead of cap and trade, Con-Way supports increasing fuel taxes to provide the funding needed to repair and improve America’s infrastructure, work that will require an estimated $930 billion over the next five years, according to the American Trucking Assns.

Like Con-Way, Schneider National, Inc. has also come out against carbon cap and trade, issuing an official position statement outlining their objections: “We are opposed to carbon cap and trade legislation. Government allocation of carbon-based energy use is nothing less than government control over the means and methods of production. It would require the creation of a massive federal bureaucracy to manage the allocations. It would likely result in more lobbying and campaign contribution abuses as citizens compete for the carbon credits being doled out by the government.

“We believe that a carbon cap and trade program would further weaken the economy, misallocating resources better allocated by the markets,” the statement continued. “The creation of wealth would be inhibited, and it is just such wealth that, in the past, funded and sustained the tremendous improvements in air and water quality our country has achieved over recent decades. We at Schneider remain committed to responsible environmental stewardship and believe that carbon cap and trade legislation is at best extremely inefficient – and is likely counterproductive – in furthering environmental sustainability efforts.”

The independent Heritage Foundation, which likewise opposes the Waxman-Markey bill, assigns hard numbers to the damage it envisions the measure could cause: “An analysis of the Waxman-Markey bill (as reported out of the House Committee on Energy and Commerce) found that unemployment will increase by nearly 2 million in 2012, the first year of the program, and reach nearly 2.5 million in 2035, the last year of the analysis. Total GDP loss by 2035 would be $9.4 trillion. The national debt would balloon as the economy slowed, saddling a family of four with $114,915 of additional national debt. Families would also suffer, as the bill would slap the equivalent of a $4,609 tax on a family of four by 2035.”

There are, of course, other voices and other perspectives, including those of many utility industry leaders. “If we give climate change the priority it deserves and tackle the problem seriously we will improve our nation’s energy security, create new jobs, grow a new sector of the economy, and safeguard the planet for future generations," noted Ralph Izzo, chairman, president & COO of New Jersey-based PSEG, one of the nation's 10 largest electric companies,, in an article on the Ceres website. "Establishing a price on carbon through a cap and trade program will give businesses the certainty they need to invest in the new energy economy," added Izzo.

“We need fleets to understand why they have to be concerned,” said David L. Miller, vp--global policy & economic sustainability for Con-Way. “Some fleets just don’t yet understand the potential impact [of cap and trade] on their own operations.”

About the Author

Wendy Leavitt

Wendy Leavitt joined Fleet Owner in 1998 after serving as editor-in-chief of Trucking Technology magazine for four years.

She began her career in the trucking industry at Kenworth Truck Company in Kirkland, WA where she spent 16 years—the first five years as safety and compliance manager in the engineering department and more than a decade as the company’s manager of advertising and public relations. She has also worked as a book editor, guided authors through the self-publishing process and operated her own marketing and public relations business.

Wendy has a Masters Degree in English and Art History from Western Washington University, where, as a graduate student, she also taught writing.  

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