The Waxman-Markey bill is making just about every segment of the oil and natural-gas industry unhappy.

Oil refiners would be hit, because they would likely be among the largest buyers of emissions allowances. In addition to covering their own emissions, the refineries that turn crude oil into gasoline, diesel and other fuels will be responsible for the carbon emissions from transportation.

That puts the industry on the hook for some 44% of U.S. carbon emissions, according to the American Petroleum Institute, but it would receive just 2% of the emissions allowances available under the bill. Refiners would have to buy the rest at auction or on the open market.

By comparison, the electricity sector, which accounts for about 40% of U.S. CO2 emissions, would receive 35% of the allowances, with other industries such as cement, glass and paper manufacturers getting 15% of the free permits.

"The distribution of these credits is out of line with the actual distribution of emissions," said Amy Myers Jaffe, associate director of the Rice University Energy Program.

Refiners, already under pressure as the recession cuts U.S. demand for gasoline, say the bill will raise prices for consumers, force some refineries to close and increase foreign imports from countries that don't have to abide similar rules.

The added cost of buying allowances would likely be passed on to consumers in the form of higher gasoline prices, which could rise 28 cents to 54 cents a gallon by 2030, according to analysts at the National Commission on Energy Policy, a Washington-based bipartisan group.

Very bad bill, people.  Burn up the phones to D.C.

WSJ