After reading about half of Waxman-Markey I realized* the bill was basically a convoluted gas tax, hiring mercenary tax collectors (carbon traders, offsetters etc.) at 120% of the cost vs. a straight up carbon tax. From Bloomberg:
Valero Energy Corp. Chief Executive Officer Bill Klesse is so sure the Waxman-Markey climate bill will fail to become law that he’s making no strategic adjustments to cope with the legislation.U.S. refiners see shakeout under climate change bill (TSO;VLO)":
“We are not altering our business model based on this legislation because we think the legislation is so poor for all the constituents, the consumers, everybody,” Klesse, 63, said in an interview at the company’s headquarters in San Antonio.
As head of the biggest U.S. refiner, Klesse may have little choice but to bet on failure of the bill, which passed the U.S. House in June. Valero said it stands to lose more than any other company and can’t turn on a dime to blunt the impact.
Refiners would have to pay for carbon-dioxide emissions the U.S. Energy Department estimates at more than 2 billion tons a year, minus up to 135 million tons covered by free allowances. The Congressional Budget Office estimates that allowances will cost $28 a ton in 2020. At that rate, the industry’s cost would be about $52 billion. Klesse estimates Valero’s allowance cost at $6 billion a year, 10 percent higher than its record profit.
“There is no way for refiners to win the way the rules are being drawn, no way,” said Kevin Book, managing director at consulting firm Clearview Energy Partners in Washington.
Unlike integrated oil companies such as Exxon Mobil Corp. and Houston-based ConocoPhillips, Valero doesn’t have oil and natural-gas wells to help offset the impact of higher refining costs. Nor does the company have plants outside North America that could export fuel to the U.S. and dodge some of the costs called for in the Waxman-Markey bill....MORE
...It would appear that the House climate bill was a disguised gasoline tax with the political advantages of being opaque and outsourcing the actual tax collection to mercenaries (i.e. carbon traders).
Oops, don't want to forget the grab-bag of goodies to every special interest that could get their snout in the trough, which of course will be recycled into campaign contributions.
A perfect bill!