Ranking member of the House Energy and Commerce Committee, Joe Barton, R-Texas, warned that the carbon price signal Democrats have said is essential to reduce CO2 emissions from fossil fuel combustion is already hurting American businesses and consumers.

The United States is "at a crossroads in the debate over whether to constrain carbon dioxide emissions by rationing energy," Barton said at a June 19 Subcommittee on Energy and Air Quality hearing to review legislative proposals aimed at reducing greenhouse gas emissions. He noted that in January 2007, House Speaker Nancy Pelosi, D-Calif., said it was her objective to enact a carbon cap-and-trade bill in this Congress. "Her intent was to establish a price signal on carbon - in other words, a strategy to make fossil energy more expensive in America in order to suppress public demand for it," he said.

In January 2007, Barton noted that regular gasoline was selling, on average, for $2.30 a gallon, whereas today it sells for over $4.00 a gallon. "I'd say that's a pretty strong signal," he said. "Natural gas was $6.60 a thousand cubic feet in February of 2007. It's expected to hit $12 by next February."

Barton said $12 natural gas means that gas-fired electricity prices will rise significantly and industries that rely heavily on natural gas, including chemicals, fertilizers and other manufacturing, will continue their exodus to other countries.

"If in January 2007 Speaker Pelosi had called for a consumer price signal as high as those we are suffering already today, she would have stood virtually alone in her strategy. But those price signals already are hitting us, they are hurting our economy and we do need to do something about them," Barton said. "Enacting a cap-and-trade bill, in my opinion, is not the solution."

Edison Electric Institute President Thomas Kuhn told the subcommittee that under any scenario, the emissions reductions in the cap-and-trade bills before Congress will be expensive. The wisest way to accomplish the reductions in the power sector "is through the development and deployment of a full portfolio of climate technologies and measures over the long term. These include: energy efficiency for both supply and demand; renewable energy; advanced coal technologies integrated with carbon capture and storage; new nuclear power plants; and plug-in hybrid electric vehicles," he said.

Kuhn warned that if targets and timetables are not aligned with the expanded use of energy efficiency and renewables in the short term and with widespread deployment of new nuclear plants and advanced coal and carbon capture and storage technologies in the long term, "the costs of compliance would become astronomical and consumers would be compelled to curtail their use of electricity dramatically, with resulting consequences to the economy and the standard of living."

"In developing federal climate legislation, it is essential that Congress get it right," National Mining Association President and CEO Kraig Naasz said. He pointed to a recent analysis by the National Energy Technology Laboratory, which said that dramatic shifts away from coal as a baseload provider for U.S. electricity generation will lead to "spectacular price increases for households and industry" with "serious and damaging implications for the reliability of electricity supply and the viability of the U.S. economy."

Fertilizer Institute President Ford West told the subcommittee that soaring natural gas prices are exacting a heavy toll on America's nitrogen fertilizer producers and farmers. Since 1999, the U.S. nitrogen industry has closed 26 nitrogen fertilizer production facilities, due to high natural gas prices. More than half of the nitrogen fertilizer used by American farmers is imported.

"Within the climate change debate the fertilizer industry has grave concerns that our remaining domestic production will be severely impacted during any 'transition period' where utilities will fuel switch to natural gas for generating electricity," West said. "Projected fuel switching will cause the price of gas to skyrocket," sending more fertilizer production to move offshore. He noted that more than 50% of the nation's fertilizer imports come from countries with weaker environmental standards than the United States and no climate change policies.