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2/7/2010
Rep. Montgomery: What is at stake in the Global Warming Debate
Tuesday, the Assembly Special Committee on Clean Energy Jobs held its first public hearing on Governor Doyle’s Global Warming legislation. The value of public hearings cannot be understated. Each person who testifies before a legislative committee imparts upon us knowledge, wisdom and insight. Their real world reality is an invaluable counter to the Madison rhetoric.
One of those so-called visits from reality for our committee came in the testimony given by Tom Scharff, Director of Energy Services for NewPage Corporation. In a span of less than five minutes, Mr. Scharff’s testimony reminded every member of the committee what is at stake if the Governor’s Global Warming legislation is enacted into law. Please let me share with you some of his knowledge, wisdom and insight.
NewPage Corporation, like many other United States-based manufacturers, suffers under the weight of any increasingly competitive global economy driven by the need to make the best product at the best price. The company operates paper mills in six states and has one mill in Canada. Ten years ago, the company operated six paper mills in Wisconsin and employed 4,315 workers. Today, they have closed down two of those mills and have 2,300 workers on their Wisconsin payroll.
The process by which paper is manufactured is very energy intensive. This is true of most Wisconsin manufacturers. According to Mr. Scharff, the company’s paper mills operating in central Wisconsin have monthly electric bills which exceed $6 million. The cost of energy ranks just behind the cost of raw materials and labor on the expense side of the company’s balance sheet.
For obvious reasons, reducing energy costs is a top priority for the company. Towards that goal, the company has reduced its overall energy consumed per ton of paper sold by 16%. On an annualized basis, the company consumes about $400 million of energy and within their energy portfolio 50% of the company’s boiler fuels are derived from biomass and other renewable resources. Since 2003, the company has voluntarily tracked and reported its greenhouse gas reductions. Mr. Scharff made these points to draw attention to the company’s commitment to reducing its carbon footprint and energy consumption long before the debate over global warming became an issue.
After sharing this background information, Mr. Scharff proceeded to explain to committee member that the financial impact of Governor Doyle’s Global Warming bill on the company may approach $450 million. He added that that if Wisconsin imposes additional costs that other states do not, the company would be forced to move paper orders away from Wisconsin to one of the other five states or to Canada resulting in the loss of additional Wisconsin jobs. He closed his remarks with these words:
“These are tough economic times and the paper industry is struggling against increased costs, a tough market and foreign competition. Why would Wisconsin, the number one papermaking state in the country add these additional costs to their core industry?”
That’s a very good question.
Throughout Northeast and Central Wisconsin, papermakers provide good-paying, family-supporting jobs to 32,000 Wisconsin workers. The recent closing of paper mills in Kimberly and Niagara are not so subtle reminders of the devastating impact that the loss of a major hometown employer has on workers, their families and the community.
This reality is rarely mentioned by Governor Doyle. Nor does he mention the costs associated with the government mandates, regulations and utility customer subsidies in his Global Warming legislation. In 2009, Wisconsin lost 163,000 jobs. Rather than driving jobs and businesses out, we need to focus on efforts that will create jobs.
Phil Montgomery is a Republican and represents the citizens of the 4th Assembly District in Green Bay.
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| 2009 |
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