ATA warns Congress on impacts of greenhouse gas policy
The American Trucking Association voiced concerns to Congress Thursday over the potential impact of pending federal cap-and-trade emission legislation and urged lawmakers to move cautiously on environmental initiatives.
In testimony before the subcommittee on energy and air quality of the House Committee on Energy and Commerce, Randy Mullett, Con-way Inc. vice president of government relations and public affairs, spoke on behalf of his firm and the ATA, warning the panel that the current cap-and-trade legislation could result in a patchwork of local, state, and regional climate change regulations that would increase diesel fuel prices even higher.
Mullet, who serves in several environmental officer positions within the ATA, said such a patchwork policy is 'unworkable and impracticable' and could seriously affect the ability of the trucking industry to serve the interstate commerce needs of the nation.
Congress is considering five pieces of climate change legislation that would set up a cap-and-trade system. The 'cap' portion of the plan would set limits on greenhouse gas emissions and require large emitters to have an 'emissions permit' for each ton of pollutant emitted. The 'trade' portion would allow the large emitters, such as refineries, to increase their emission levels above the caps by purchasing the 'emission permits' from firms that have not used their allotment.
'In 2006 alone, trucking consumed over 39 billion gallons of diesel fuel,' Mullet said. 'This means that a 1-cent increase in the average price of diesel costs the trucking industry an additional $391 million in fuel expenses.' The trucking industry is on pace to spend nearly $170 billion on fuel this year, $56 billion more than was spent in 2007 and more than double what the trucking industry spent four years ago.
'Our industry can not absorb rapid increases in fuel costs,' he said. 'The trucking industry is extremely sensitive to how climate change legislation may further escalate fuel prices.'
As a result of rising fuel prices and a simultaneous downturn in the national economy, many trucking firms are struggling to survive while others have already been forced out of the industry.
'In the first quarter of 2008, over 1,000 trucking companies with at least five trucks failed and 10,400 independent operators, drivers and employees have lost their jobs. This was the largest number of trucking related failures since the third quarter of 2001,' Mullet told the panel. 'The ATA is urging Congress to carefully evaluate fuel price impacts that result from climate change legislation.'
Mullet said the ATA, which represents nearly 40,000 licensed motor carriers across the nation, prefers a more unified federal approach to climate change legislation and he urged the panel to consider proactive federal policy that preempts local, state, and regional legislation.
'Long-haul truck drivers will not be able to afford delivering goods across state lines unless Congress proceeds to preempt regional, state, and local climate change efforts already enacted,' Mullet said. 'If 100 percent federal preemption is not secured by Congress, ATA in the alternative asks for a blanket exemption applicable to business activities involving the interstate transport of goods.'
He also told the panel that the ATA does not support a national climate change truck registry, arguing that 'current reporting burdens' on the industry and 'ample trucking information already available ' from existing requirements' were more than adequate. He called an additional requirement for truckers to provide information to a national truck registry, as proposed federal legislation is asking, would be a burden to the 96 percent of the industry made up of small businesses. He called such a requirement is both 'unnecessary and impractical.'
'While a cap-and-trade program continues to be the primary mechanism being discussed to promote carbon reductions, such an approach is more effectively applied to stationary sources and not extremely diversified mobile sources such as trucking.'