letter from american chemistry council 1.23.03

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Sectoral Emissions Reduction Agreements FOIA Letter from American Chemistry Council 1.23.03

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  • 1.American Chemistry * -~~~~~~Council 1300 Wilson BoulevardAmerican "Arlington,VA 22209 ChemistryTel: (703) 7150Counci I~.Fax: (703) 741-6000FAX Cover Sheet To: The Honorable Philip Cooney, Chi~ef of Staff Company Name: Council on Environmental Quality Fax Number: (202) 456-2710 From: Mr. Greg Lebedev, President andI Chief Executive Officer Description:A letter, addressed toSecret ry Spencer Abraham, Secretary of Energy, transmitting the attached "US Chemical Indsy RsoetohePresident's Global Climate Business Challenge."Number of pages (inctuding cover): 24Date Sent: 01/23/2003Time Sent: 02:51:16 PMIf there are any problems with this transmission please call: (703) 741-5917 S~/T~d9609 TV7L 0LUWD) S0:2t 2OO-Z-Ndf

2. Amercn* GREccoR LcaiESDvChmsr PRESIDENT AND- Cuter ExECuniVE OFFICERCou C.GohmsrMakes It PossibleJanuary 23, 2003 The Honorable Spencer AbrahamSecretary of EnergyDepartment of Energy100 Independence Avenue, SWWashington, DC 20585Dear Secretary Abraham: On behalf of the American Chemistry Council (ACC), I am pleased to transmit theattached "US Chemical Industry Response to the President's Global ClimateBusiness Challenge." This voluntary commitment has been approved by ourBoard of Directors, pursuant to Preside-nt Bush's call for an American industrialresponse to the issue of global climate ~change. We applaud President Bush'sleadership in harnessing the entrepreneurial spirit of the US private sector inaddressing this significant issue. ACC members are proud to do their share to help the President and the countryachieve the overall 18 percent reduction in greenhouse gas intensity by 2012, ascalled for in the Business Challenge. In 2001, the US chemical industry hadnearly half a trillion dollars in sales, anid half of that was of products that arehydrocarbon-based. The business of cIhemistry is energy-intensive, and is uniquebecause it uses energy both in the manIufacturing process and also as a rawmaterial. No other industry adds as mn uch value to its energy inputs as the businessof chemistry. Energy efficiency and greenhouse gas ~intensity reduction are not new to thechemical industry. As you know, we have reduced the fuel and power energyconsumed per unit of output by 41 percent since 1974. Carbon emissions per unitof output have declined by more that 45percent during the same period. Theefficient use of energy has been an econmic imperative of the chemical industry Responsible Camre'1300 Wilson Boulevard, Arlington, VA 22209 * Telephione 703-741-5100 * Fax 703-741-6085sc~/E0 ,d 9SE0 tr. 0LUWDS0 :ET E70OF-7E-NUf 3. The Honorable Spencer AbrahamJanuary 23, 2003Page 2 for decades, driven by the need to compete globally and the desire to constantlyimprove our operations. The centerpiece of our 12-part response to the President's Global Climate BusinessChallenge is to pursue reductions in g eenhouse gas intensity toward an overalltarget of 18 percent by 2012, using a baseline of 1990. From 2003 through 2012,the ACC will collect data directly fromImembers to measure progress. But that'snot the only way our intensity will help the country achieve its intensity reductiontarget. We also pledge to continue to mnanufacture products and pursue innovativenew ways to help other industries and sectors achieve the President's goal. Weplan to work with the government, through the Department of Energy, to developa credible methodology for estimating~greenhouse gas efficiency improvements insectors of the economy that use chemical industry products. Our response alsohighlights areas in which government policy can assist in achieving designatedgreenhouse gas intensity reductions.I We look forward to working with the Department of Energy and theAdministration in implementing this cohmmitment. We also look forward toparticipating in the Pebruary 6 White House event and would be interested in aspeaking role. If you have any questiqns, please feel free to contact ACC VicePresident of Federal Relations, Mark Nelson, at (703) 741-5900. Chief Executive Officercc:The Honorable James L. ConnaIughton, ChairmanCouncil on Environmental Qual1ity S~E/Q~od96093N 2LtSw0:8T 00E-2Z-N~f 4. U.S. Chemical Industry,Response to the President'sGlobal Climat Business ChallengeEXECUTIVE SUMMARY On February 14, 2002, President George W_ Bush committed the nation to "cutting greenhouse gas intensity - how muchA emit per unit of economic activity - by I18 percent over the next 10 years." As par4 of that commitment, he challenged American businesses to further reduce emissions. I1'is paper contains the response of the members of the American Chemistry Council to t~hat challenge.The U.S. chemical industry had $454 blillion in sales last year, and half of that was of products that are hydrocarbon based. Obviously, it's an energy-intensive industry, but it's unique because it uses energy in the, manufacturing process and also as a raw material. While using natural gas, natural gas liquids, oil, coal and electricity to power its plants and processes, it also draws upon those same energy sources as the primary ingredient in the products we use every day. No other industry adds as much value to its energy inputs as the business of cheityThe U.S. business of chemistry hareud the fuel and power energy it consumes per unit of output by 41 percent since 1974f Carbon emissions per unit of output have declined by more than 45 percent during the same period. The efficient use of energy has been an economic imperative of the chd'mical industry for decades, driven by the need to compete globally and the desire to constantly improve our operations.ACC members have had the opportunity to take part in a number of programs that have helped to achieve these savings since tile mid- I1970s. Among them:* ACC's Climate Action Progra -whereeach ACC member is encouraged to inventory and examine greenhouse gas emissions and take measures to reduce them.I * ACC's voluntary annual Energy Efficiency and Greenhouse Gas Emissions Survey - which collects data from members that ACC compiles yearly. ACC then shares aggregate indicators of energy consumption, efficiency and greenhouse gas intensity with the public through the Department of Energy. * ACC's Energy Efficiency AwaIds Program - which recognizes companies forenergy efficiency achievementstAlong with compiling their own record of energy efficiency and greenhouse gas intensity improvement, ACC's members also hav been developing and bringing to market products that help other industries do the same. For example, refrigerators and other sa/so d9609 TP&~ L02t Ut490:8T :00E-2:--Nb2 5. appliances are far more energy efficient today than a generation ago. That's largely because insulation materials, made from chemicals derived from oil and gas, have dramatically reduced the electricity needed to run them. The same is true for automobiles, where parts and engine equipment made from the same type of chemicals, make them lighter, increasing their enerIgy efficiency, Chemicals also make today's cars more durable.IThe ways we heat and cool our homes aIre more efficient, economical and environmentally friendly thanks to chemical products. Chemical insulation material wrapped around houses as they're being built, along with paints and coatings, offer a protective envelope that keeps out water', moisture and air. The Department of Energy projects that the areas with the largest increases in associated C02 emissions from 2000 to 2020 are the transportation and buildings sectors. Chemical industry products that improve the energy e-fficiency for these [sectors will contribute greatly to U.S. efforts to achieve greater greenhouse gas intensity reductions.While members of the American Chemnistry Council have made and will continue to make their best effort to achieve greenhuse gas intensity reductions, government can help by removing barriers that impede efci ency upgrades and by providing incentives for companies to implement state-of-the-adt technology. Without an aggressive government role in removing barriers to progress and providing incentives, it will be difficult, if not impossible for the business of chemistry to do its share to reach the president's goal of reducing national genose gas intensity by 18 percent during the 2002-20 12 timeframe.Th e Response As its response to the president's GlobalI Climate Business Challenge, members of the American Chemistry Council commit to:I1. Pursue additional reductions in greenhouse gas intensity toward an overall target of 18 percent by 2012, using 1990 emissions intensity as the baseline. Government data shows that firomn 1990 to 2000, wih projectioh to 2002, the U.S. chemistry business will reduce its greenhouse gas* inte ity by 12 percent. From 2003 through 201 2, ACC will collect data directly from members to measure progress. Greenhouse gas intensity for the business of chemisiris the ratio of net greenhouse gas emissions to production.2. Continue to manufacture products and pursuecinniovative new ways to help otherindustries and sectors achieve the peident' s goal. ACC will work with thegovernmenitto develop acredible methodologyftor estimating the greenhouse gasefficiency improvements in sectors of the economy that use chemical industryproducts.2SE/S0 d3609 TPJ E&t ULD S0:8T00Z-ZE-Nbf 6. 3. Provide valid and reliable data ensuring that greenhouse gas intensity reductionnumbers are complete, transparent, and cover actual conditions. ACC also will workwith the Department of Energy to develop consistent definitions and methodologiesfor its voluntary emission reduction land sequestration registration program undersection 1605(b) of the 1992 Energy' Policy Act. In addition, ACC will support effortsof the Administration to provide ap 9oraerecognition to businesses and industriesfor voluntary actions that are taken ii 2003 and beyond to reduce greenhouse gasintensity.4. Provide regular reports to the public and the government on progress. Member-widerepor