Climate Change Legislation Will Increase Diesel Prices, Hurt Consumers

/PRNewswire/ -- The American Trucking Associations (ATA) First Vice Chair Barbara Windsor told the Senate Environment and Public Works Committee today that the current cap-and-trade proposal will increase the price and volatility of diesel fuel for the trucking industry without significantly reducing carbon emissions.

"ATA strongly supports efforts to reduce greenhouse gas emissions and make this country more energy independent," said Windsor, who is President and CEO of Hahn Transportation in New Market, Md. "However, an economy-wide cap and trade system is not the answer." Proponents of an economy-wide cap-and-trade system say increasing the price of fuel will reduce consumption, Windsor said, but that does not hold true in the trucking industry.

"In our industry, a higher fuel price does not translate into fewer miles traveled because the nation depends on trucks to deliver nearly 100 percent of the food, clothes, and medicines that we use in our daily lives," said Windsor. "Instead, this increase in diesel prices will raise logistics costs within the economy and hurt the American consumer."

Cap-and-trade requires oil refineries to purchase emission allowances that cover their direct refining operations and the amount of carbon produced by downstream combustion of the produced fuels. "The costs associated with obtaining these allowances will be passed on the fuel consumers in the form of higher prices," said Windsor. "A major petroleum supplier to the trucking industry has advised that diesel fuel costs could rise by up to 88 cents."

"Should Congress move forward with a cap-and-trade carbon control system, oil refinery carbon caps should apply only to the refinery's direct carbon emissions and not to the downstream combustion of the products they produce such as gasoline, diesel, and jet fuel," said Windsor.

Cap-and-trade also will increase price volatility as carbon prices will fluctuate. Volatile fuel prices make it very difficult for trucking companies to accurately predict expenses and pass them on to customers.

ATA is concerned with the support of various investment banks for cap-and-trade. These firms would profit from volatility in the energy futures markets and a carbon derivatives market. Congress must reform commodity trading before creating new derivative carbon markets.

Windsor's testimony suggested alternative methods of reducing carbon emissions from the trucking industry. These alternatives are set forth in ATA's environmental sustainability plan, which would reduce fuel consumption by 86 billion gallons and reduce the carbon footprint of all vehicles by nearly a billion tons over the next 10 years. The sustainability plan includes: a national 65 mph speed limit and governing new truck speeds to 65 mph or below; decreasing idling; reducing highway congestion through highway infrastructure improvements; increasing fuel efficiency through EPA's SmartWay Program; promoting the use of more productive truck combinations; and supporting national fuel economy standards for medium- and heavy-duty trucks.

"Our plan can achieve real results with far less cost and disruption to our industry sector than under a cap-and-trade scenario," said Windsor.

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Georgia Employers Take Action to Reduce Unnecessary Diesel Idling

No-idle zones improve air quality and reduce operational expense

Since the 2008 launch of The Clean Air Campaign’s Diesel Idling Reduction Program, more than 60 employers and property managers in Georgia have taken the initiative to reduce unnecessary diesel engine idling among their fleets and at their work sites. Made possible by a grant from the UPS Foundation, the program has also educated more than 15,000 drivers about the harmful effects of vehicle idling.

“There is a strong business case to be made for establishing a no-idle policy,” said Executive Director Kevin Green. “It not only keeps pollution out of the air, but it improves operational efficiency. Less gas, less fleet maintenance and less wear on engine components are significant bottom-line budget considerations for this policy.”

Loading docks and delivery areas are the hot spots where you can usually find idling diesel engines. This exhaust is not only dangerous to drivers. Exhaust can also enter office buildings through air intakes, doors and windows, and studies show that diesel exhaust contains 15 carcinogenic pollutants. In Georgia, more business leaders are starting to take action to prevent harmful idling.

“We saw an opportunity to make an immediate difference in the air quality in and around our parking garages,” said Sean Cabrey of LAZ Parking. “After joining The Clean Air Campaign’s Diesel Idling Reduction Program, we enlisted the help of our Atlanta clients, and printed more than 50 “no-idle zone” signs for all of our delivery areas.”

“No-idle programs are the types of forward-thinking initiatives that should go in the pages of a company’s corporate sustainability report,” continued Green. “As more employers set out to cultivate a greener internal culture, this is another step toward that goal.”

The Clean Air Campaign continues to help Georgia employers develop best practices and policies for reducing unnecessary diesel engine idling, providing free “no-idle zone” signage, distributing educational and marketing materials, and providing the tools necessary to measure the impact and success of the Diesel Idling Reduction Program.

For more information about the program or to learn how your company can become a no-idle program participant, visit CleanAirCampaign.org or call 1-877-CLEANAIR (1-877-253-2624).

About The Clean Air Campaign
The Clean Air Campaign is a not-for-profit organization that works with Georgia’s employers, commuters and schools to encourage actions that result in less traffic congestion and better air quality. To accomplish this goal, The Clean Air Campaign, along with its associate organizations, partners with more than 1,600 employers to create custom commute options programs; and annually helps thousands of commuters find commute alternatives that work for them, providing financial incentives to get them started. The Clean Air Campaign also protects public health by distributing Smog Alerts and empowers students, parents and teachers to play a positive role in reducing traffic and cleaning the air through a multi-faceted education program reaching elementary, middle and high schools.

Each day, these programs reduce 1.6 million miles of vehicle travel and keep 800 tons of pollution out of the air we breathe. For more information, call 1-877-CLEANAIR (1-877-253-2624) or visit CleanAirCampaign.org.
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ExxonMobil to Invest over $1 Billion to Increase Cleaner Diesel Supply

(BUSINESS WIRE)--ExxonMobil Refining & Supply today announced it will invest more than $1 billion in three refineries to increase the supply of cleaner burning diesel by about six million gallons per day. The company will construct new units and modify existing facilities at its Baton Rouge, Louisiana; Baytown, Texas; and Antwerp, Belgium, refineries.

“This underscores the company's ongoing commitment to meeting the growing needs of the marketplace, while, at the same time, providing cleaner burning fuels to consumers. Our increase in diesel production at these three sites will be equal to the diesel produced from about four average-size refineries,” said Sherman Glass, President, Refining & Supply. “In combination with cleaner-burning engines and the latest vehicle emissions control technologies, this low sulfur diesel reduces emissions in both on-road transportation, and off-road industrial sectors.”

This investment is the latest phase in ExxonMobil's efforts to increase supplies and reduce the sulfur content of both motor gasoline and diesel. In 2000, the company began an integrated approach to convert and modify refineries, terminals and pipelines to provide ultra low sulfur fuel products.

By 2010, the refineries’ modifications and expansions are expected to be completed, increasing production of diesel with sulfur levels of 15 parts per million (ppm) or less.

About ExxonMobil Refining & Supply

ExxonMobil Refining & Supply operates a global network of reliable and efficient manufacturing plants, transportation systems, and distribution centers that provide a range of fuels, lubricants, and other high-value products and feedstocks to our customers around the world.

About ExxonMobil Baytown, Baton Rouge and Antwerp Refineries

* The Baytown Refinery is the largest oil refinery in the United States, with a crude capacity of approximately 567,000 barrels per day.
* The Baton Rouge Refinery is the second-largest oil refinery in the United States, with a crude capacity of approximately 503,000 barrels per day.
* The Antwerp Refinery is the second largest ExxonMobil refinery in Europe, with a crude capacity of approximately 305,000 barrels per day.

CAUTIONARY STATEMENT: Business plans discussed in this release are forward-looking statements. Actual future results, including capital expenditures and the impact of refinery upgrades, could differ materially due to changes in applicable law or regulation; changes in supply and demand for diesel fuels; the outcome of commercial negotiations; technical or operating factors; and other factors discussed under the heading "Factors Affecting Future Results" on the "Investors" section of our website at www.exxonmobil.com.

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