Cap & Trade, Chemcials, Green Amendment

Usually Friday is a slow news day, but for those interested in Cap & Trade, chemicals, and green products you may want to read the full articles over at Washington Post.com and the Wall Street Journal.

Washington Post, High Stakes Quest for Permission to Pollute, by Steven Mufson

Green Amendment drafted into Waxman Markey Bill and introduced by Rep. Gene Green (how awesome is it to have a Rep. named Green in Congress. All “green” legislation should go through his office. Or, would that be more green-washing?) The amendment inserted “emission points” and deleted “sources” and is directed at the petroleum refining industry.

As explained in Mufson’s article, the green amendment has the potential to allow oil refineries the ability to cut carbon emissions at one processing unit rather than the entire facility. Refiners would have to cut Co2 emissions at the single unit by 50%. Of course the bill is still working its way through Congress, many changes will be made, but it is better to have it in now than having to try an insert later.

Here is why I think this is important

Wall Street Journal, Chemical Makers Poised to Gain in Cap-and-Trade System, by Ana Campoy

Over at the Wall Street Journal, Ana Compoy, has an excellent article on how chemical companies stand to gain from the Cap & Trade legislation. She references Dupont Co. expectations that 50% of sales by 2015 will come from renewable materials.

When producing renewable materials, ie green chemicals, large chemical companies will be emitting less Co2 right of the bat. I’m guessing here, but my presumption is that there will be very little re-tooling when taking that “one single unit” and converting it to a green chemical production unit. It is a wide assumption, but I’m betting chemical companies and refiners see this as really good legislation. Especially when they are getting allowances, or otherwise known as free, carbon credits.

I am sure that I’m completely off my rocker, but this is my initial read on what this provision does for the oil refining and chemical industry. Just a few weeks ago there were stories about large refiners and chemical companies being very interested in ethanol and other renewable fuels. See where I’m going with this?

Ms. Compoy leaves us with an excellent quote from Dow Chemical’s Rich Wells, VP of Energy, “Whether your inspiration is cap-and-trade or the prospect of $140-a-barrel oil, you need to be strategically involved in this space.”