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Todd J. Gillman

Todd J. Gillman is the Washington Bureau chief of The Dallas Morning News.

Sen. Kay Bailey Hutchison unveils study showing cap and trade will be bad for Texas

12:00 AM CDT on Thursday, October 22, 2009

By TODD J. GILLMAN / The Dallas Morning News
tgillman@dallasnews.com

WASHINGTON – Sen. Kay Bailey Hutchison warned Wednesday that climate-change legislation working its way through Congress would push fuel prices up by $1 per gallon.

The Texas Republican and Sen. Kit Bond, R-Mo., unveiled a study contending that the Democratic-backed proposal intended to curb greenhouse emissions amounts to a $3.6 trillion surtax on gasoline, diesel and jet fuel, a dramatic figure, albeit one calculated over the next 40 years.

"The major burden of this falls on refiners. ... It's the refiners that are going to have to pass along this tax, and 25 percent of the refining capacity in America is in Texas," Hutchison said at a news conference outside the Capitol.

Supporters tout the environmental benefits and predict that curbing emissions would create millions of jobs, in green industries.

The Senate is expected to consider the legislation soon, and Hutchison has cited the fight against cap and trade, a system of emissions limits coupled with permits that polluters can buy and sell, as one of her top reasons to remain in the Senate as she runs against Gov. Rick Perry in the March GOP primary.

Hutchison rarely called news conferences at the Senate before jumping into the governor's race. Wednesday's event was part of an emerging pattern in which she uses her post to draw attention to Texas issues and, perhaps, score political points.

Perry has also actively fought cap and trade.

In May 2008, when the GOP's soon-to-be nominee for president, Sen. John McCain, advocated cap and trade, Perry denounced the idea. The governor has hosted roundtable discussions with business leaders at which he argued that cap and trade would cripple the state's energy sector. Earlier this month, when he became chairman of the Interstate Oil and Gas Compact Commission, he used the platform to speak out again.

"It's going to cost thousands of jobs if it passes. Anytime there is legislation pending that's going to have a negative impact on Texas, the governor is going to be very vocal," Perry campaign spokesman Mark Miner said. "The business community is not supportive of this."

Hutchison also has a long history of opposition. She voted against a related measure in June 2008. When the House narrowly passed its version this summer, she denounced it, arguing that it would disproportionately hurting energy-producing states such as Texas.

Oil and gas companies oppose the legislation. Economists agree that higher energy costs are inevitable, though estimates vary widely.

The Hutchison-Bond estimate of $3.6 trillion, based on the House version, is unusually high, because of the four-decade timeframe. But it tracks previous GOP and industry-backed projections that cap and trade would cost millions of U.S. jobs and push up energy costs for households and businesses.